Fuel taxation rises 'not justifiable'

Date: 3rd April 2009

Small businesses have condemned the government's decision to raise fuel taxation, instead calling for a two-year price freeze.

The Forum of Private Business (FPB) has hit out following this month's 2p increase in fuel duty, suggesting that it could lead to bankruptcies or redundancies in British enterprise.

Officials at the forum are also concerned that once VAT returns to its normal rate of 17.5 per cent, small firms will no longer have something to offset the rising cost of fuel taxation against.

Phil Orford, chief executive of the FPB, said: "Cost increases of this scale are not sustainable at the best of times, let alone in a recession.

"There is no justifiable reason to raise duty on fuel further."

Mr Orford added that firms in the logistics sector were at particular risk of "business closures and job losses".

Research published by the recruitment firm Talent Q earlier this week showed that 44 per cent of employees were considering cutting their payroll and making redundancies.