IF you listened to the radio this morning (Tuesday, 15 November 2011), the airwaves were full of fuel woe. The cost of filling up with petrol or diesel is really clobbering all of the UK, particularly those in rural areas.
But what about those traders in their vans, the plumbing companies, the sales executives on the road in their company cars? All dreading that moment when it comes to refuel – and another £100 goes into the fuel tank.
Sure, it’s a cost to business: but it’s a cost that’s due to get higher in January thanks to a rise in fuel duty.
This is scheduled to be 3.02p per litre (before VAT) while the cost of inflation is likely to add further upward pressure on fuel costs. And another rise is scheduled for August 2012. Ouch! Give small businesses a break Mr Chancellor.
Now, whatever fuel cost reductions your business has in place, from reduced travelling to a lighter right foot, travel consumes fuel – which is getting more expensive. The Chancellor needs to think carefully about this: is the coalition on the side of UK business – and the SME engine room of the economy – or not?
No doubt that is a point weighing on the MPs as they debate a motion to stem the rise in fuel prices today in Parliament (15 November 2011).
Quite rightly the Road Haulage Association is campaigning for a fuel duty freeze. I heard one haulier this morning who runs his own small business saying he was putting in £250,000 of fuel…and rising.
“Road diesel is a key industrial fuel, affecting the price of almost everything we make and buy. It already amounts to a 30% tax on this element of the supply chain – far more than in any other EU country,” commented RHA chief executive Geoff Dunning.
“A typical UK 44-tonne truck – the workhorse of the British economy – pays at least £25,000 a year in diesel duty. That compares with £16,000 in France, £15,000 in Belgium and just £12,000 in Luxembourg, where many foreign fleets buy their fuel.
“British transport firms must pass on their costs to British customers – or lose the work to foreign competition, in which case the UK government gets no duty or other tax revenue.”
It’s hard not to argue with such logic. Hauliers have it bad in particular. But so too does the rest of SME Britain.
“The squeeze from relentlessly high pump prices is due to get worse as driving in the dark and winter weather adds greater fuel consumption to motorists’ misery,” added Edmund King, president of the AA.
“Over-priced Brent crude will be generating extra tax for the government. However, if the government isn’t prepared to tackle high oil and fuel prices and their drain on the nation’s well-being, it should at least commit to freezing fuel duty until petrol falls at least below 125p a litre and diesel below 130p.”
That’s a great idea from Edmund and the AA. If the government wants to stimulate the economy, forget Labour’s idea of reducing VAT – that’s another cost to business just to change prices – cut the cost of fuel by freezing fuel duty and then introducing a stabiliser that was promised to us. Are you up for that George Osborne?
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Go to the Editor’s Blog Is the government pro business? Or just confused?
