Thursday 21 May 2004                                                                 

Dear Chancellor,

I am writing to express the FSB’s concern regarding the increase in oil prices, which is pushing up fuel and other industrial heating costs.

We would urge you to cancel your plans to raise tax on motor fuel by 1.92 pence a litre in duty in September this year. Failure to do so would mean an overall increase of 3.2 pence per litre in just under a year.

A surge in the price of crude oil of roughly 25 per cent is estimated to push pump prices up by as much as 7 pence per litre.

We already have evidence from members, of filling stations charging around 82.9 pence a litre for unleaded and

83.9 pence a litre for diesel. Some have even seen prices at over 90 pence per litre.

High taxes levelled at Britain’s small businesses through the duty on petrol is holding up their growth and job creation potential.

We hope the Government will learn the lesson of the previous fuel protests, when months before the protests took place, organisations such as the FSB, the CBI and the IOD were applying pressure on the government through the democratic process to address the issue.

However the Government’s failure to listen paved the way for the fuel protesters and the consequent problems their actions gave rise to.

The FSB calls on you to take whatever action is necessary especially on the tax side to provide hope for many small businesses in this cost area for which fuel is an essential tool of the trade.

We do hope you will take these points of view on board and repeat last year’s precedent when you dropped a planned rise in duty because of volatile oil prices.

We would be happy to meet with you to discuss this matter in greater detail.

Carol Undy

National Chairman

Federation of Small Businesses