ClickAJob News

The Federation of Small Businesses (FSB) is calling on the government to cut fuel duty to prevent rising costs from stifling the UK economy.

In an FSB poll of over 9,000 small business owners, more than 80 per cent 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 per cent said that fuel costs would make it likely that they will have to reduce staff numbers in the next 12 months.

According to the FSB, small businesses contribute over half the UK's GDP, making the figures "worrying".

The FSB wants 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 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?"

A recent survey from vehicle leasing company Lex found over a third of financial directors, controllers and chief financial officers expect job losses if fuel costs continue to rise.

Over 34 per cent of businesses expect to have to lay off staff if petrol prices hit £2 a litre, as predicted by energy giant Gazprom last week.