Rising business costs 'must be addressed in March Budget'

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A government commitment to tackle rising business costs is being called for

Responding to the latest Labour Market Statistics from the Office for National Statistics (ONS), the Federation of Small Businesses (FSB) has claimed more now needs to be done to tackle rising costs for UK firms.

FSB policy director Mike Cherry argued that companies across the length and breadth of the nation are facing increasing financial pressures and this, in turn, is limiting salary growth for employees.

Indeed, the ONS figures for October to December 2015 showed that weekly earnings rose annually by two per cent during this period in comparison to the final quarter of 2014.

However, a significant proportion of businesses are also maintaining freezes on pay for staff due to the rising costs of company administration.

"Recent policy decisions have resulted in a growing number of new or unexpected costs for businesses, including higher than expected minimum wage increases, auto-enrolment deadlines and changes to how dividends are taxed," Mr Cherry stated.

"To meet these challenges employers are seeking ways to control costs and this may be a cause of slower than expected wage growth."

The FSB chief concluded that in order to boost productivity and raise wages, smaller businesses need real progress on business rates, a firm commitment to simplify the tax system and crucial investment in roads and broadband.

These are all issues that the FSB would now like to see tackled in the coming March Budget announcement by the chancellor.