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Small firms back minimum wage

Labour's plans for a national minimum wage received backing from an important ally last night after the Federation of Small Businesses endorsed the proposals. Delegates to the federation's annual conference in Llandudno voted to accept "the principle of a sensibly negotiated wage level for unskilled adult workers" by 57 per cent to 43 per cent.

A total of 23,727 members voted in favour of the motion while 18,473 voted against. The conference decision was in line with a survey among federation members 15 months ago, which found that the majority did not believe a statutory minimum wage would lead them to cut jobs.

Barabara Roche, shadow small business minister, welcomed the vote, saying: "Small businesses clearly recognise that Labour will only introduce a minimum wage at a level which does not harm them and accept that the principle of a minimum wage is one which has substantial benefit."

The federation survey showed that small businesses felt a national minimum would not have any real effect on their operations.

That finding was in contrast with the continuing opposition of the Confederation of British Industry to regulations, including a minimum wage, which could reduce labour market flexibility.

Labour has long planned a national minimum wage, though without specifying a level. It says a Low Pay Commission, made up from employers and employees, would recommend a rate.

The Government has said a minimum wage could lead to the loss of more than two million jobs, due to pressure from employees and unions to restore and maintain pay differentials.

Delegates in Llandudno were told that the Government's own labour force survey showed that 300,000 people in Britain earned less than pounds 1.50 an hour, with over a million - 800,000 of them women - on under pounds 2.50 an hour.