Firms will have to lay off staff, freeze wages and cut investment if fuel duty prices continue to increase, a leading business group has warned.
The Federation of Small Businesses (FSB) said a snap poll of 400 of its members showed that most expected to pay an extra £2,000 in the coming six months through rising fuel costs.
One in four feared they will have to freeze wages and one in 10 said they will start laying off staff if the cost of fuel continues to increase.
The FSB said any future fuel price increases should be scrapped until a “stabiliser” was put in place to freeze or reduce duty to match increases in VAT revenues from higher pump costs.
John Walker, chairman of the Federation of Small Businesses, said: “These figures show that the rise in fuel duty is really having a negative effect on small businesses that actually want to grow, innovate and take on new staff.
“The Government has said it is looking to the private sector to put the economy on a firm footing, but the hike in fuel duty is doing the opposite and hampering small business growth.
“With future fuel duty rises looking likely, small firms are just going to be left trying to survive.
“The Government promised in opposition that it would put a fuel duty stabiliser in place, and it is clear that without such a measure, the country’s five million small businesses will be put on a knife-edge.
“It is vital the Government goes back to its pledge and puts this stabiliser in place.”