The Federation of Small Businesses (FSB) has insisted that its members want to pay their employees a higher salary, but argued that they are "struggling" with cash flow in the current economic climate.
Companies are under pressure to pay staff the Living Wage - which was increased today to £8.55 in London and £7.45 elsewhere - following campaigning by London mayor Boris Johnson and Labour leader Ed Miliband.
Small firms want to pay their employees more, and recognise the benefits of doing so. However, they are struggling to manage cash-flow in the midst of weak economic demand and increasing energy and fuel costs.
More top news
A thoughtful teenager has taken Valentine's romance to a whole new level by buying 900 flowers and giving one to every girl in his school.
The group of Adelie penguins dwindled from 160,000 to 10,000 after an iceberg got stuck near their colony, scientists have found.
At least 10 people have been injured after more than 50 cars were involved in a pile-up on a busy highway in Pennsylvania.