The previous increase in fuel duty took place in December 2008, following the Government’s Pre-Budget Report, having been postponed from April 2008. The cost to business was offset by the 2.5% decrease in VAT. However, in January 2010, VAT is set to go up to 17.5%. Following the next scheduled rise in fuel duty in April 2010, small businesses will have been hit by an increase in fuel costs of 6% - or six pence per litre - during the period December 2008 to April 2010. This is equivalent to a 12.5% increase in duty.

As part of its submission to the 2009 Budget, the FPB has produced evidence that the owners of small businesses are concerned that the policy of increasing fuel duty, announced in November 2008’s Pre-Budget Report, will prove to be unsustainable. In the latest Referendum quarterly survey of FPB members, 79% of respondents said that increasing duty would be would be ‘damaging’ or ‘very damaging’ to their businesses.

“Cost increases of this scale are not sustainable at the best of times, let alone in a recession,” said the FPB’s Chief Executive, Phil Orford. “There is no justifiable reason to raise duty on fuel further. The Government should freeze additional fuel duty increases in 2010 to help protect small businesses and jobs.”

He added, “The logistics sector, in particular, is warning of significant business closures and job losses as a direct result of today’s 2p rise in fuel duty. The combined effect of these successive increases in the cost of fuel could be catastrophic for many small businesses across all industry sectors.”