The regional chairman of one of Scotland’s major business organisations has said fuel costs may see the collapse of many rural businesses during a fragile economic recovery.
David Hutcheson, chairman of the Tayside branch of the Institute of Directors, is backing The Courier’s campaign to introduce a fuel duty regulator so the price at the pumps remains the same.
The paper is backing proposals for a fuel duty regulator a Tory pledge at last year’s General Election which would cut the duty levied by the government when oil prices rise.
The reverse would happen when prices fall. We believe this is the best way to slow rising fuel costs and keep the economy moving.
Mr Hutcheson said, “At a time when businesses are under severe pressure trying to recover from the downturn of the last two years it is particularly depressing to see the constant fuel price rises we are experiencing.
“In a rural area such as ours, fuel is a major factor for many businesses.”
He added, “They are caught in a trap where they see costs increase for fuel but are finding it extremely difficult to pass this on to their customers.
“In the current fragile recovery this may be the final straw for some and we must look to the government to meet the pledges given before the election to introduce a fuel duty stabiliser as quickly as possible.”
The recent VAT increase has hit many businesses hard, with fuel prices reaching almost £1.30 a litre, meaning motorists are being charged some of the highest prices in Europe.’The perfect storm’Mr Hutcheson said, “I hate the phrase but it’s the perfect storm. We’ve been hit by the VAT rise, fuel rises and the cuts in public sector, which will hit a lot of small businesses.
“A lot of companies are running at little or no profit as it is and all they can see now is that profit disappearing…
“The big firms can generally negotiate from a stronger point of view but a small firm often doesn’t have that advantage or they are maybe dealing directly with customers or other small firms who just will not accept it.”
He added, “You then put the company in a difficult position where it’s either do we not sell it or do we sell it and make so little?
“You will see a lot of companies are making those decisions day to day working at no profit just to reduce their stock.”
Mr Hutcheson wants the government to come out and state its position he said the uncertainty is doing nothing to help businesses that see no light at the end of the tunnel.Lack of timescaleHe said, “I understand that the government have some difficulties with these changes we want to make, because partly it’s governed by European legislation.
“But there are ways the government can do this and there are changes I think they can make.
“They made promises before the election.”
He added, “Okay, we know it’s a difficult time but if they would just be straightforward with us and say, ‘We’re not going to do it’ and we’ll have to cope with that or ‘We are going to do it, but you might have to wait six months,’ then we would know where we are.
“The lack of any timescale makes it difficult for businesses to plan ahead.”
Mr Hutcheson is managing director of Glen Abbot Ltd, in Perth, and has worked with many FTSE 100 companies as well as for utilities, government, local authorities and the NHS.
He specialises in pandemic planning and works for a number of organisations around the world helping them create their plans and run exercises internally, nationally and cross-continent.