Press Release

Official: record fuel costs hit jobs and economic growth

June 16 2008

Figures from the Federation of Small Businesses (FSB) show that rising fuel costs are already having a dramatic effect on the UK economy by stifling growth and employment.

In an FSB poll of over 9,000 small business owners, more than 80 percent said that fuel costs are likely to make it more difficult for them to expand their business and hire more staff in the next 12 months. Nearly 40 percent said that fuel costs would make it likely that they will have to reduce staff numbers in the next 12 months.

With small businesses contributing over half of UK GDP, the figures make worrying reading. The FSB is calling on the government to set up a mechanism whereby higher than expected tax revenues from North Sea oil would trigger corresponding reductions in fuel duty.

John Wright, FSB National Chairman, said:

“Small businesses are reaching breaking point and if something is not done about rising fuel prices very quickly then we will have a major economic crisis on our hands.

“The UK’s 4.5 million-strong small business community simply cannot cope with the cost of fuel rising at these rates. The problem is affecting every type of business in every area of the country.

“The most frustrating thing is that the government can do something about it. Its estimate of the cost of North Sea oil in the last Budget was well below the actual cost, which means that tax revenues have been well above expectations. Why can’t they use this extra money to reduce fuel duty and ease the pain for the millions of small businesses that keep the UK economy afloat?”

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