Some 55 per cent of firms in the North reported significant increases in costs due to the National Living Wage - compared to 43 per cent in the South.
Responding to the workforce survey by the British Chambers of Commerce, Richard Wright, Sheffield Chamber’s executive director, issued a call for the right balance to be struck.
He said: “This latest BCC survey suggests a North/South divide, with 55 per cent of firms in the North of England and the Midlands more likely to be impacted by the National Living Wage than the 43 per cent of firms in the South.
“No reasonable business person would argue that paying people reasonably is something they should not do, but with more than 50 per cent of businesses in the North of England seeing significant increases in employment costs the right balance must be found.
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“The fact is businesses feel swamped by legislation that is reducing their competitiveness.
“Pension changes and the apprenticeship levy have also added to the burden.
“These types of increase must be done in parallel with real productivity increases otherwise more and more businesses will be put at risk.
“It is in nobody’s interest to see employment opportunities reduce because we got the balance wrong.”