Skip To The Main Content


The Issue

Small businesses recognise the benefits of paying their staff a good wage and offering a range of workplace benefits. These include:

  • Greater productivity
  • Increased staff loyalty and morale
  • Attraction and retention of talent
  • Boost to local economy, if higher wages are spent locally

We’ve welcomed the gradual increases in the National Minimum Wage, reflecting the upturn in the economy. However the Government’s decision to introduce a target of 60 per cent of median earnings by 2020 will be a significant challenge for many small businesses. Those in the hospitality, care and retail sectors are likely to be most affected, as their profit margins tend to be tighter.

Action FSB have taken

  • Lobbying Government to recognise the impact of the National Living Wage on small firms and to extend the Employment Allowance to counterbalance the financial impact.
  • Calling for annual changes to each of the minimum wage rates to continue to be based on the recommendations by the independent Low Pay Commission.
  • Lobbying Government to make public organisations factor in the cost of paying the National Living Wage when procuring services.
  • Helping small businesses to recruit and retain staff by providing a wide range of benefits for staff, through the creation of voluntary collective insurance schemes.

Our Goal

We’ve always supported the National Minimum Wage. It has traditionally been set at a level that eliminates low pay without harming employment. Future wage rises must be sustainable and based on the advice of the independent Low Pay Commission. To help small businesses increase wages, the Government needs to ease financial pressures including rent and utility costs. Good first steps have been achieved with the cut in Employers’ National Insurance.

FSB research shows 18 per cent of small businesses have used the Employment Allowance to increase wages.

Achievements in...



  • Lobbying Government to recognise the impact of the National Living Wage on small firms.
  • We’ve persuaded the Government to cut Employers’ National Insurance by introducing then extending Employment Allowance.
  • We’ve called on the Government to ask the Low Pay Commission to publish indicative minimum wage rates for future years to help small firms plan ahead.
Visit UK/Westminster section

FSB Cash Advance

A risk-free way of raising finance for your business, which is not secured to your assets, giving you the cash injection you need, when you need it.

Find out more

Related news