Proposed taxes on road users will hit a motor industry already at a logistical disadvantage to rivals in Europe according to the head of BMW in the United Kingdom.

"Regulation, environmental concerns, and the complexity of the taxation system are not making life any easier for anyone, particularly in the motor trade," Jim O'Donnell said at an event for journalists in London.

"GBP45bn is raised each year from the various taxes on buying, owning and using motor vehicles. This represents nearly 11% of all government revenues.

"It's hardly surprising that [UK chancellor, or finance minister] Gordon Brown turns up to launch the new Mini at Oxford. He owes us a lot."

The BMW (GB) chief said congestion charging "looks like being here to stay" and was spreading west of central London and increasing to GBP10 a day. And road charging (effectively pay-per-mile use of UK roads) appeared to have been accepted in political circles and was likely to be in place nationwide by 2015.

"One wonders where it will all end," O'Donnell said.

On road pricing, he said: "I would argue it is not at all clear what would be the benefit to this country. Industry in the UK is already at a logistical [disadvantage compared with] our continental counterparts.

"A robust evaluation of the cost and benefits of road charging is desperately needed. So far this appears to be sadly lacking and the plans seems to be designed to compensate for the lack of a proper transport infrastructure.

He said the poor infrastructure and the fact "we are an island" gives the UK a logical disadvantage compared with Europe.

But he added: "It is therefore music to my ears when I hear the French complaining  of the unfair competitive advantage that the UK has because of our opt-out of the working time directive.

"Let's hope our government stands firm on this labour flexibility which in the UK is one of our unique competitive advantages."

Referring to the recent Stern report on global warming, O'Donnell said the UK could not solve the problem on its own and, without the full co-operation of industry globally, penalising UK manufacturers with taxes would erode any competitive advantages.

He said the UK already had some of the highest fuel taxes in the world, on top of the logistical disadvantages.

Environmental debate should ensure that business globally shares the burden so that "UK Plc is not disadvantaged".

"This is fundamentally an international issue and any activity should be multilateral," O'Donnell said.

He added there should be an international consensus on the technologies required to deal with climate change.

A first step was the use of more renewable energy and BMW was focused on that with its hydrogen vehicle programme.

Graeme Roberts

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