Fuel duty delay fails to appease industry

The announcement in last week's Budget of a delay in a 2p-a-litre increase in fuel duty until October has done little to appease the horticulture industry, which is already reeling from spiralling operating costs.

Chancellor Alistair Darling deferred the planned 1 April increase until October and announced a 0.5p-a-litre rise for 2010.

But the Petrol Retailers' Association said drivers would face two rises within six months, with another 2p increase planned in April 2009. With VAT, the combined increases will add almost 5p per litre to the cost of petrol or diesel.

Federation of Small Businesses transport chairman Chris Glen said: "Fuel prices are hurting small businesses and their customers in every sector and in every area of the country. Now is not the time for the Government to be adding to their problems by increasing fuel duty. After a really tough year and several major tax increases, small businesses deserve a break."

Owner Karen Baldwin of Karen's Pets & Plants, in Wales, said the price of petrol was "significantly" affecting business, with a Midland-based wholesaler no longer delivering because it was uneconomical.

She told HW: "We rely on deliveries. We haven't got time to be going and fetching stock. And it's now unfeasible to deliver to customers, unless it's a significant amount.

"People don't realise the knock-on effect it has. It's affecting more than just the hauliers. It's eating into profit margins."

Derbyshire-based amenity planting supplier Plantscape area sales executive Karl Dawes said customers were querying delivery charges more often because the company was passing on the rise in fuel prices. It had also noticed a significant increase in staff travel costs.

"Unfortunately, you can only absorb the cost for so long. It's good that the increase has been delayed, but the cost of fuel keeps rising anyway without the Budget having an impact. We are at a stage where costs are outstripping business growth and for that reason, the rise should be put to one side."

- NFU deputy president Meurig Raymond said: "We're concerned at what appears to be a strong undercurrent of hostility to and lack of understanding of British-produced biofuels, which runs through the Budget small print.

"The loss of the biofuel duty differential of 20p per litre in 2010 creates investor uncertainty."

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