Small firms pumped-up over fuel pledge

A SMALL business lobby group is calling for the Conservatives to honour a manifesto pledge to introduce a fuel duty stabiliser.

The Federation of Small Businesses says its is ‘severely disappointed’  that the Government has not introduced the stabiliser, which is  a mechanism to ensure an automatic freeze on fuel duty increases and a reduction in duty to match any increases in VAT revenues from higher pump prices.

Fuel duty and VAT rose last week, putting fresh pressure on small firms’ cashflow.

The UK has the second highest diesel price in Europe, yet, on average a litre of diesel is made up of 51% product price and 49%, whereas in the UK the average is 38% product price and 62% tax.   

In real terms, fuel duty will rise by one per cent above inflation each year from April 2011 to April 2014. So, the FSB is concerned small businesses will not be able to sustain such high prices.

Stockport businessman Richard Gregg, FSB Manchester and North Cheshire regional chairman, said: ““The country’s small businesses are not just hard-hit by the recent VAT rise, but also by record high fuel prices which has come at the most fragile of times.

“Small firms, such as the haulier and the taxi driver, will all be severely affected by this rise in fuel duty. Unlike big businesses, they will have to pass the cost onto customers at a time when they already have to deal with the VAT hike.

“In opposition, the Conservative Party promised to put a fuel duty stabiliser in place – something the FSB has been calling for. But they have failed to deliver.

“It is imperative the Government acts now and introduces the stabiliser to avoid a relentless flow of fuel duty increases that simply put small firms on a knife-edge.”