Nottingham is set to introduce a car parking levy on employers, the most significant anti-traffic measure since London brought in its congestion scheme.

Councillors in the east Midlands city have agreed to the levy, which will raise up to £11m ($21m) a year from companies, as a way to fund public transport improvements.

Business leaders have criticised the project, which falls on the largest 500 employers in Nottingham. From 2010 all will have to pay £185 a year for each car parking space they provide, rising to £350 in 2014.

Shoppers, tourists and other visitors will not have to pay any extra charge to leave their cars in Nottingham. The council hopes the money can go towards an extension of the city’s tram network, improvements to its railway station and putting more buses on the street.

Jon Collins, the council’s leader, said the toll on commuters was the price needed to pay for essential public transport in the city. “We need to do something if we want this city to thrive and grow,” he said. “Leadership is about saying, ‘There are difficult decisions to be made in the interests of this city’.”

Nottingham, like many other British conurbations, has suffered partial gridlock during busy times of day and had considered a congestion charge to tackle the issue, which the council says costs businesses £160m a year.

However, it decided this would take longer to implement, be more expensive for motorists and come with huge administration costs.

Conservative council members have described the toll as “born out of desperation” and “about money and money only”. It would make people pay for the “audacity” of going to work, said Brendan Clarke-Smith, a Tory councillor.

The Derbyshire and Nottinghamshire Chamber of Commerce and Industry suggests that more than 90 per cent of employers in the city oppose the proposals.

Many companies could leave the area as a result of the charge, the chamber has warned. Alliance Boots, the biggest private-sector emp­loyer in the city, is likely to pay more than £500,000 a year – although that could be passed on to staff.

Get alerts on UK politics & policy when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.

Follow the topics in this article