Hundreds of lorries blockaded the A40 in the west of the city in a rally against spiralling prices for petrol and diesel. The protestors also descended on Downing Street to hand over a letter calling for a tax rebate for some haulage companies.

The FPB, which recently highlighted figures from the Scottish Chamber of Commerce showing the Treasury has already received an additional £505 million of revenue over the past six weeks because of the rising cost of fuel, is campaigning alongside the Freight Transport Association (FTA) for the proposed hike in fuel duty to be abandoned.

"Revenue is already pouring in because of October 2007's 2p increase in fuel duty, so another hike would be a kick in the teeth for many smaller hauliers and other businesses, which are struggling to control supply and delivery costs as it is," said the FPB's Media and PR Officer, Phil McCabe. "Given the disproportionate burden of tax they face, and the current credit crunch, it is important that the Government supports small businesses, instead of undermining them with even higher transport taxes."

In 2006, a survey of the FPB's members revealed that 67% of respondents were concerned that rising fuel duty would have severe consequences for their businesses. The FPB wrote to the then Chancellor of the Exchequer, the Rt Hon Gordon Brown, calling for variable fuel duty to be introduced in order to help stabilise pump prices.

In the past, the FPB has campaigned for fuel duty to be linked to fluctuating oil commodity prices, creating a situation where, when the price of oil goes up, the Treasury could lower the VAT on fuel by an equivalent amount.

According to the FTA, which represents companies operating more than 220,000 lorries, the bulk price of diesel has risen from 76p per litre a year ago to 106p per litre – an increase of 40%.

"The toxic combination of high world oil prices combined with the UK's self-inflicted high fuel duty regime constitutes a serious problem for every company in the country.  Inevitably, that problem has to be passed on to all of their customers, whether commercial or private consumers. High fuel duty contributes to inflation," said the FTA's Director of Policy, James Hookham. "After everything that has happened, the Chancellor cannot seriously be thinking about adding to the fuel price burden by increasing the duty level. He must recognise the extent of this emergency right now."

He added: "As a signal of understanding and goodwill, he should announce the scrapping of the 2p increase immediately. He should also say that he will engage in talks with the industry aimed at producing early financial relief to transport operators in the form of a duty rebate, and a longer-term change of the system to reduce the excessive tax-take from essential vehicle users."

The FTA believes that that the problems for UK transport are made worse by the large numbers of vehicles coming into the country fuelled by cheaper continental diesel. He criticised the Government's recent decision not to introduce a charge on foreign vehicles using UK roads.

Tracy Hoather, who runs the Knutsford-based courier firm, Sameday plc, believes that increased fuel duty and other taxes impacting on road users, such as congestion charging, will dwarf the Government's environmental incentives.

"The fuel duty escalator is separate from VAT, so businesses can't claim it back. It is a definite penalty for haulage firms – fuel duty really should be linked to the price of a litre of diesel or petrol," she said. "When it was put in place, I don't think anyone believed that the fuel duty escalator would raise as much money as it has."

She added: "Now, green taxes have become trendy, and are favoured by most politicians. Congestion charging really concerns me. I can see every city having a separate scheme. That would be a nightmare for a company like ours, which delivers all over the country."

 

FPB member David Humphry, of RA Haulage Co, London, said that the rising cost of fuel was adversely affecting his business.

"Fuel counts for about 30% of our costs, and that's probably a fairly stable figure throughout the industry," he said. "It's a big cost to pass on – and if you can't control your costs, you will be in trouble. Certainly, it's affecting our profitability."