The Deputy Prime Minister, John Prescott, has been urged by British business to drop plans to give local authorities powers to impose charges on companies which provide car-parking spaces for employees.

The British Chambers of Commerce (BCC) says workplace parking charges could cost British business £2 billion a year, even if only a quarter of eligible of local authorities imposed the new tax.

In a letter to Mr Prescott, the BCC said it would coordinate a campaign through its 126,000 members against the new measure, contained in the Transport Bill now going through Parliament.

BCC director general Chris Humphries said: "The workplace parking levy is a blunt instrument that risks damaging the competitiveness of local economies and displacing vehicles into residential areas.

Root causes

"This new tax will do little to tackle the root causes of congestion as it is charged to businesses, rather than road users.

"Those smaller employees who are forced to pass the cost on to their staff will be acting as unpaid tax collectors for local government.

"The stark choice for business is more taxes or more red tape - hardly a policy that smacks of support for enterprise."

The BCC said as an alternative the government should bring in charges for road users, as long as all the money raised was channelled back into transport spending.

Alternative

It said charging for cars going into town centres could not only raise revenue but also significantly cut congestion.

Chris Humphries said: "With congestion costing the UK economy £20bn each year, businesses are desperate for a workable solution.

"Road charging potentially offers a targeted and effective measure - the cost of which would be spread fairly among users, including business.

"Workplace parking charges, however, are nothing less than a new tax on business competitiveness."