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Scrap hikes in fuel duty to help struggling firms, says business group

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Despite the Government's decision to stagger a planned hike in fuel duty, prices at the pump are hitting struggling businesses hard, the Forum of Private Business is warning.

The average price of fuel has now reached 119.9 pence per litre, topping the previous high of 119.7 pence reached two years ago. In some areas prices are much higher and analysts have warned that they could reach as much as 150 pence per litre over the summer.

Already, increases in VAT and fuel duty between December 2008 and April 2010 have boosted the Government's fuel tax take by 12.5%. Cost increases on this scale are unsustainable for small businesses at the best of times, let alone in periods of recession.

Following April's 1 pence rise the Forum is calling for the further two increases announced in the Budget – 1 pence in October and 0.76 pence scheduled for next January – to be scrapped.

"High fuel costs affect the entire economy. When prices at the pumps go up, nearly every business and consumer in the UK suffers. It's probably no coincidence that the previous record high prices in the summer of 2008 were soon followed by full-blown recession," said the Forum's Policy Representative, Matt Goodman.

"The only organisations that benefit, it would appear, are multinational oil companies and the Treasury.

"Following a prolonged period of decline, we are at the beginning of a crucial stage in the UK's economic recovery. Small businesses will play a central role in this recovery and must be given a tax environment in which they can thrive. Spiralling fuel duty is jeopardising small business growth and the planned increases should be shelved."

In a survey carried out by the Forum after the 2010 Budget 35% of respondents said the planned increases in National Insurance and fuel duty would hit their profitability.

Earlier research following the 2009 Budget found that 75% of small businesses feared that the planned fuel duty increases would be ‘damaging' or ‘very damaging' to their businesses.

Support to help small businesses reduce their fuel costs is available from the Forum of Private Business, which is a not-for-profit business support and lobby group.

As an invaluable extension to its members' teams the Forum has developed a range of tailored business solutions to support, protect and reassure small firms throughout the lifecycle of their businesses. These are: ‘Finance Director', ‘Legal Director', ‘HR Director', ‘Health and Safety Director', ‘Development Director', ‘Purchasing Director', ‘Communications Director' and ‘Managing Director'.

Through the Forum's ‘Purchasing Director' solution members can access the Fuel Card Programme provided in conjunction with The Fuelcard Company, one of the UK's largest fuel card resellers.

With a choice of eight different fuel cards, which are FREE to members of the Forum, small businesses can better control their fuel costs and enjoy a range of money-saving benefits, including preferential fuel prices, a consolidated VAT invoice approved by HMRC and freedom from binding contracts.

The Fuelcard Company also provides a complete and free fuel analysis, giving businesses guidance on potential cost savings.

For more information call 0845 612 6266 or visit

Media contacts

John Walding

01565 626 016

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