FSB warns over minimum wage rise

An above inflation rise in the national minimum wage could cause "serious problems" for small businesses, a lobbying group has warned.

Less than two weeks until the Budget, the Federation of Small Businesses (FSB) has urged the government to increase the minimum wage by the rate of inflation only.

An FSB spokesman said: "We are in favour of the national minimum wage, but there would need to be some very compelling evidence to increase it above inflation again. In Scotland and North West England an above inflation increase would really start to cause problems."

The Work Foundation has also called for the rate of increase to be slowed to stop it hitting employment. The minimum wage currently stands at £5.35 for over-22s, with the latest increase set to be announced before the Budget on March 21.

Unions are calling for the level to be increased to £7 per hour.

In addition the FSB's Budget submission called for small businesses to be recognised as a "special customer group" with respect to the energy market. "Small businesses, like pubs, are not that different to individuals," added the spokesman. "Whereas big businesses will have an energy manager, many publicans will not have the expertise in dealing with these companies - there needs to be more consumer protection."

Meanwhile the Wine & Spirit Trade Association has called for a freeze in excise duty for wine and fortified wine and a freeze in duty for spirits, as part of its submission. It is also urging an announcement of changes to wine duty to be included in the Pre-Budget Report.

The British Beer & Pub Association and Association of Licensed Multiple Retailers have both called for a freeze in beer duty ahead of the Budget.