FLEET drivers who switch to alternative fuels will be exempt from congestion charges when they are introduced in London, Mayor Ken Livingstone has revealed - but companies warn introducing any scheme will damage business and costs jobs in the capital.

Standard charges of £5 per day will be introduced at the end of next year, bringing in at least £210 million a year, according to the latest draft of the transport strategy for London. But express and commuter coaches, alternative-fuel cars and electric vehicles will qualify for a 100% discount.

Drivers would not escape payment altogether, as they would have to pay a nominal registration fee to cover the cost of administration and verification. But despite the incentives, a new survey by one of the key partners in the scheme, Westminster City Council, has revealed businesses may relocate because of the charges. The survey found 56% of nearly 6,000 people it questioned were opposed to charging, 40% for firms said they would relocate, cut back on staff or close offices and 59% demanded guarantees on improvement of public transport. Businesses also warned customers would pay with higher prices for goods.

The charging scheme attempts to appease motorists by making motorcycles, mopeds, emergency vehicles, buses, licensed taxis London borough vehicles and NHS vehicles exempt from the charge. Fleet operators will be able to set up charging accounts with the Greater London Authority, rather than paying through the 'normal' route of garages, newsagents, shops, by post or by phone. Penalties of £80 for non-payment will be made. Comments on the draft transport strategy should be made by March 30. For details of the strategy, log on to www.london.gov.uk or call 0207 9834100.