smallbusiness.co.uk: Helping your business think big

The pressure is growing on the government to act as rising fuel costs harm the effectiveness of UK businesses.

After the government’s refusal to scrap the 2p increase in fuel duty – planned for October –, lobbying groups such as the Forum of Private Business (FPB) and the Freight Transport Association (FTA) are calling for more decisive measures.

‘We are desperate and the government must realise that,’ says Bill Hockin of Devon-based William C Hockin Transport ‘This is the perfect storm, with foreign competition from European hauliers, who pay less tax than us in the UK, and rising fuel costs. If this situation continues, it will cripple us, if not ruin us.’

Further rises have been proposed for 2009 and 2010. The FPB argues that the government’s plan to increase fuel duty amounts to another tax, ‘showing it to be out of touch with the UK’s small-business community’.

In a statement, the FTA’s external affairs director, Geoff Dossetter, said that fuel now constituted 40 per cent of most firms’ vehicle operating costs.

‘The government has failed to demonstrate that it has understood the serious impact of oil price rises to UK industry and has so far shown no interest in tackling the problem,’ said Dossetter. ‘The price of oil is dramatically changing these processes to the detriment of all, seemingly without any concern from the government, which has done nothing to help except to postpone its proposed 2p-per-litre duty increase from April until October.’

Hockin added: ‘There is only so long I can ask my customers to pay more, before they will turn away. I have been in business for 40 years and this year is by far the worst I have ever known.’