Phil Orford,

Chief executive, Forum of Private Business

The spiralling cost of fuel including recent increases in duty and January’s 2.5% VAT rise makes it extremely difficult for small bakeries and other shops to keep supply and delivery costs down.

With disposable incomes also being hit, the inflationary knock-on effect of fuel price rises on consumer spending affects smaller retailers in particular. The government’s recent decision to cut fuel duty and remove future price rises by scrapping the tax escalator are certainly welcome. But while giving to small businesses and consumers with one hand, ministers appear to be taking away from them with the other.

In the run-up to the Budget, when the announcements on fuel were made, the Forum of Private Business called for both cuts in duty and a stabiliser to be introduced, in order to regulate pump prices when the cost of a barrel of oil fluctuates. We believe this would allow for greater certainty and confidence by enabling business owners to plan ahead more effectively. Unfortunately, the government disagreed and said such a move would be too complex and expensive right now.

Instead, the Chancellor announced the coalition’s own version of a ’stabiliser’ a tax on the North Sea oil industry, designed to offset the cuts he had revealed just seconds before. Far from just affecting large oil firms, the tax hike hits smaller ones operating in the industry too.

Rather than prematurely championing these fuel measures as absolute proof of the government’s small business credentials, perhaps it should revisit the idea of a stabiliser and other proactive policies in the light of the long-term benefits they could bring.