Fuel duty rise would ‘stifle economic growth’, says FSB
Wednesday, 23 March 2011 14:51
The Federation of Small Businesses (FSB) has urged the Government to reverse next month’s increase in fuel duty amid fears that it will stifle economic growth.
According to the FSB, rises in fuel duty are stifling eight in 10 small firms and ‘severely affecting’ key economic sectors such as manufacturing, construction and transport.
Ahead of the Budget, the lobby group has renewed its calls for the Government to take action to stem the escalating cost of fuel. It proposes scrapping the one pence rise in fuel duty and introducing a fuel duty stabiliser – a mechanism to adjust fuel prices in order to alleviate the impact of oil price rise shocks on pump prices.
Previous research by the FSB suggests that the hike in fuel duty will cost small firms up to £2,000 over the next six months, in addition to their regular outgoings.
The organisation argues that, unlike big businesses, small enterprises are unable to absorb the cost and consequently may be forced to raise prices, freeze wages or make redundancies.
Commenting, FSB National Chairman, John Walker, said: ‘We all know that the rises in fuel are having a huge impact on everyone across the country, not least of all small businesses.
‘Reversing the planned 1 pence rise – which when indexed to inflation will actually mean a 5 pence increase on pump price – and cutting the VAT on fuel duty in the Budget next week will be welcome steps.
‘But to really stem these volatile prices the Government must introduce a fuel duty stabiliser as it promised. Small firms are under huge pressures – stabilising fuel prices will be a step in the right direction to really help small businesses in all sectors grow.’