Fuel duty rises discussed for next year are likely to put many struggling firms out of business, warns the Forum of Private Business.

Fuel duty rises planned for next year are likely to put many struggling firms out of business, warns the Forum of Private Business (FPB).

Prime minister David Cameron agreed to today's three hour debate on the subject in the House of Commons after more than 110,000 people signed an e-petition calling for MPs to debate the matter.

The Forum agrees with the motion, tabled by Conservative MP Robert Halfon, which argues high fuel prices are harming the viability of small and medium-sized enterprises (SMEs) and are curtailing consumer spending key to growth.

FPB chief executive Phil Orford says, ‘Our members have seen a continued rise in the cost of doing business over the last year, and according to our latest survey, 92 per cent of SMEs saw an increase in transport costs.

‘An additional fuel duty increase in the current climate simply can't be justified. Not only would significant tax hikes damage small firms further, it's highly likely growth would be affected, with consumers having less money in their pocket to spend.’

Orford says that the country is at a crucial stage in its economic recovery and that small businesses must be given a tax environment in which they can thrive.

Figures released by the Office for National Statistics this week showed the average household spends around £750 a year on petrol or diesel tax, with less well-off homes in real terms paying out a larger percentage of their disposal incomes than those on higher wages.

The Forum has been lobbying government to introduce a fuel duty stabiliser and this week wrote to business secretary Vince Cable, calling for the measure to be looked at again.

If both rises go ahead it could be as much as 8p a litre at the pumps, taking diesel over a milestone £1.50p a litre. 

See also: Fuel costs hitting SMEs