BUSINESS leaders have backed calls for the Coalition Government's three-pence fuel duty hike to be scrapped.

The support for the campaign by the Scottish Chambers of Commerce came as the SNP drafted a clause in the Westminster Parliament that would scrap the rise set to be published this week.

It forces a vote on the planned August rise as the budget completes the final stages of its passage through parliament.

Chief executive Liz Cameron said: "The abandonment of the three-pence rise in fuel duty planned for August would be a welcome boost for businesses, which are having to contend with high transportation and utility costs at a time when domestic demand remains subdued."

The cross-party campaign is backed by Fairfuel UK, which has more than 300,000 supporters across the UK. SNP Treasury spokesperson Stewart Hosie MP, who has been coordinating the campaign at Westminster, welcomed the support from the Scottish Chambers of Commerce.

"It highlights the clear business case for the three-pence rise to be scrapped. At a time when the economy is stalling, and we already have the highest fuel tax rates in Europe, it would be economic madness for the Treasury to press ahead with this further rise."

Rural communities and businesses, of which Scotland has a higher proportion than the rest of the UK, have been hard hit by sustained fuel price rises.

In a recent poll of nearly 30,000 people and 3700 businesses, Fairfuel found 85% said the fuel duty rise was the most important tax cut that could boost economic growth.