Concerns have been raised by independent traders in Morpeth about the impact of the national living wage when it comes into effect in April.
The Government initiative will see hourly pay go up to £7.20 for over-25s. This amount is then set to rise to £9 by 2020.
Although members of the Morpeth and District Chamber of Trade are not against the principle of the wage increase, they believe it will harm small businesses more than large firms if no measures are introduced to help them.
The organisation is contacting the North East Chamber of Commerce, the regional branch of the Federation of Small Businesses and local MPs about the matter.
Ken Stait, who runs Stait Photography, said: “Independent traders will be hit hard by this measure as in many industries, including mine, we’re competing against big supermarket chains and those who provide services on the internet that can absorb the increase a lot easier.
“Small businesses by their nature find that their wage bill is one of their largest overheads and combined with auto pension enrolment, it could push many out of business.
“One way to ease the effect of these increased costs could be to reduce or remove business rates, however the recent announcement by the Government that the collection and administration of business rates will be passed completely to local councils will very likely remove this opportunity as they are strapped for cash.
“The living wage is a great idea, but independent high street shops need support from the Government to cope with the changes or it will have a detrimental effect on market towns like Morpeth.”
Cynthia Fair, who runs FH Hardy Florists in Newgate Street, added: “This increase will make it more difficult for local shops in Morpeth.
“Unless there are measures to help us to go with this, we will have to consider things like reducing hours or employing fewer people.”