Bakers are facing high raw material, ingredients and energy costs, and could do without the government’s plans to increase fuel duty by a further 2p per litre from 1 April.

Representatives of the Freight Transport Association and the Road Haulage Association met with the Chancellor of the Exchequer Alistair Darling on Monday, 11 February, to try to get him to change these plans.

At 50.35p per litre, UK fuel duty for diesel and petrol is already the highest in Europe. Indeed, UK diesel duty is double the EU average rate of 25p per litre. An increase of 2p will generate serious difficulties for bakery firms and distributors.

In the last 18 months the whole of UK industry has experienced increased costs as a consequence of higher oil prices on the world market. At a time when we are suffering from the joint threats of an economic slowdown and increasing inflation, the higher costs of transporting goods and services have impacted on every single company throughout the UK.

Clearly the Chancellor can have little influence on the world price of oil, but he is responsible for the greater part of the cost of diesel and petrol which is made up of fuel duty and VAT. These taxes constitute almost two-thirds of pump prices ? for every £1.05 per litre, the government collects 66p.

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