Two-thirds facing a pay cut or freeze

More than two-thirds of British companies plan to cut or freeze their workers' salaries this year, the British Chambers of Commerce said yesterday, as it warned that private sector employers face a desperate battle to survive the recession.

A BCC survey of 400 companies from across the UK revealed that 58 per cent of firms plan to freeze salaries this year, while a further 12 per cent are expecting to cut pay. The BCC warned that half the firms in the survey were considering making job cuts over the course of the year, or had already planned a redundancy programme.

David Frost, the BCC's director-general, will tell the business group's annual conference that the Government is not doing enough to help companies struggling to stay afloat.

"The Government must realise that the private sector cannot bear all the pain," Mr Frost will say. "There was some help in the Budget but more is needed to help Britain's embattled businesses so they can drive our economy out of recession, creating jobs and wealth in the process."

Business groups are particularly aggrieved the Government has not provided cash for a short-time working scheme that might help avoid job cuts.