Next week George Osborne will announce his budget plans, and with the recovery gaining momentum I'm expecting great things. However, if we want to reap the benefits, provisions need to be made for the SMEs who pulled this country through the recession, starting with a targeted cut to the duty on diesel fuel.
It literally is the fuel that drives UK business and the blood that pumps through the veins of the country's infrastructure. Despite a Government freeze on fuel duty since March 2011, in order to boost British industry further I strongly believe that cuts need to be made, and I hope the Chancellor recognises this in the budget.
Shameful new figures from the RAC Foundation reveal that, of the 28 countries in the EU, motorists in the UK pay the highest proportion of tax on their diesel. According to their latest research, 59p in every pound spent on a litre of diesel goes directly to the government in fuel duty and VAT. Director of RAC, Prof Stephen Glaister pointed out the irony, stating that "if you take tax out of the equation we actually have the fifth cheapest diesel in the EU and the second cheapest petrol. The oil companies and retailers are often blamed for soaring pump prices but these figures reveal that's not the whole picture."
The extortionate cost has a direct impact on every UK business operating commercial vehicles, not to mention families buying groceries or taking the bus to work. Fuel is involved in everything we do, and taking just a slither of tax off diesel would pay dividends for the Government as they would undoubtedly benefit from increased productivity and therefore higher tax receipts.
The UK economy is in recovery mode and growing at its fastest rate in six years. But this is chiefly driven by increasing consumer spending and public confidence as the rise in retail sales figures show. Business investment is still slow and UK trade still runs a significant deficit. If fuel costs aren't reduced or they jump again, it will be a case of one step forward, three steps back.
At Pimlico Plumbers we've seen our fuel bills for a fleet of 120-odd vehicles rise from around £800,000 to almost a million pounds in the last few years. A cut on diesel duty by just three pence per litre will mean £20,000 worth of savings. That's a lot of money, especially for an SME, and you can be sure our customers would see the benefits when it comes to paying their repair bills.
While the current rate of diesel duty is a key source of income for the Treasury, if they don't reduce it soon they will lose out in other ways. Trades people and businesses will pass on the cost to customers who won't be able to afford the products or services, leaving a bigger and more long-term hole in the country's finances.
Fuel is involved in everything we do and we need to see a reduction in cost in order to keep chugging down the road to recovery.