Call for minimum wage freeze

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The British Chambers of Commerce (BCC) has written to the Low Pay Commission, which advises the Government on the statutory rate, saying it believed the wage should remain at the current levels of £5.73 an hour for adults, £4.77 for 18- to 21-year-olds and £3.53 for 16- and 17-year-olds, until economic conditions had significantly improved.

The business group calculated that another increase in the minimum wage in 2009, in line with the 2008 rise, would cost firms £300 million.

Hard-pressed businesses would be unable to afford a wage increase in 2009 as they struggled to cope with the effects of the economic downturn, said the BCC.

Officials warned that any increase in the minimum wage in 2009 risked adding to unemployment, which the BCC has already forecast will reach three million by 2010.

Director general David Frost, said: "We're not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it.

"Most businesses are prioritising survival at the moment. A rise in minimum wage would not help firms hold onto staff and would simply add to unemployment."