CONTROVERSIAL plans for road-user charging in London are set to cause chaos for fleets, rental firms and leasing, the industry has warned. London mayor Ken Livingstone is set to levy a £5 per day charge for cars and £15 for lorries entering the capital within two years in a bid to slash traffic levels by 12%.

He unveiled a discussion document on Friday and hopes that from 2002, drivers will have to buy a paper-based licence for each car that might enter the capital, sparking fears in the fleet industry it could be swamped with paperwork. Hi-tech numberplate recognition systems are planned to catch drivers who enter the charging area without a licence and £100 fines will be imposed on the registered keeper of the vehicle.

But daily rental firms and contract hire companies, as the registered keepers of hundreds of thousands of their customers' vehicles, fear they could be swamped by 'phenomenal' numbers of fines. Just dealing with the paperwork and passing the fines on to customers could lead to rocketing administration costs and higher rental charges, one leading industry figure warned.

Both the British Vehicle Rental and Leasing Association and the Association of Car Fleet Operators will be holding talks with the Greater London Authority to fight back on behalf of fleets and push for key concessions.

The BVRLA says it will make sure daily rental firms and leasing companies can pass fines back to the GLA through an appeals system already in place for current penalties, such as parking fines.

Mike Bowen, managing director of Kenning Car Van and Truck Rental, warned the industry would still be swamped in paperwork and said fleets could see rental rates rise.

'We already employ two people just to deal with fines incurred by rental customers, which currently average up to 40,000 a month. The proposals would create a phenomenal amount of extra cost and paperwork and that could force up rental rates.'