Small businesses like us in Scunthorpe area would struggle if workers' wages rose

Small businesses in North Lincolnshire say proposals to raise wages for workers could hamper their ability to stay afloat.

The Labour Party triggered nationwide debate after saying the wage needed for a decent standard of living needed to rise from £6.19 for over-21s to £7.45 an hour.

Shaun Smith, owner of Born 2 Party in Scunthorpe, said he felt this would benefit bigger companies, but not smaller stores. He said: "It would be difficult for smaller businesses like ourselves.

"If we were a big chain, then it would not affect us."

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Becky Murrell, assistant manager at Greenwoods in The Foundry Shopping Centre in Scunthorpe, said smaller businesses would struggle to afford this. She said: "The bigger companies can afford it.

"It is a good idea, but I would not want it to lead to jobs being lost and hours being cut."

Wendy Gittens, a sales assistant at Greenwoods, added: "It would be great but not at the cost of losing jobs.

"People could be saying this just to make them look good.

"I am only on minimum wage, but if it meant me losing my job, then I would rather stay on minimum wage."

Mark Sallows, assistant manager at Sports Direct in Scunthorpe, said it would not affect the Scunthorpe store, but it would affect the company as a whole.

He said: "We run our business a lot differently to other stores. This rise would be a good thing and it would mean getting more people going for jobs when they are available."

The living wage is independently set each year, according to the basic cost of living in the UK. It is updated annually and employers choose to pay the rate voluntarily.

Commenting on the announcement that the living wage would rise under the plans by 25p per hour, Richard Hutchings, North Lincolnshire and West Lindsey Branch chairman of the Federation of Small Businesses, said: "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.

"Businesses can only pay the wages which allow them to sell their products and services at realistic prices."

Mervyn White, branch secretary for UNISON, said he welcomed the news of discussions about a rise in the living wage He said: "It seems like a good idea. If you are going to employ people, you should pay them the appropriate rate for the job."