Minimum wage damaging small businesses, survey claims

Minimum wage legislation is damaging small businesses, according to a survey of 12,000 SMEs.

Only 43 per cent of the small businesses surveyed by the Association of Chartered Certified Accountants said they were unaffected by the minimum wage compared to 71 per cent in 1999 and 62 per cent in 2000.

The national minimum wage was increased last year to £4.85 per hour for adults.

Of the main changes made by businesses to their working practices since the latest rise, 23 per cent said they have frozen staff recruitment, 18 per cent have reduced over-time and 17 per cent have cut working hours.

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ACCA head of small business Prof Robin Jarvis said: “While the majority of businesses seem to have absorbed the costs of rises, the increases are having more impact on business profitability and work practices.”