CONCERNS over the effects of increasing traffic congestion and rising air pollution are curbing demands for special fuel tax concessions for small and medium sized businesses, according to a new report.

The study by Lloyds TSB on "Transport and Government" also revealed half of business owners favour charges for peak hours or motorway tolls as a way of cutting traffic jams.

Almost 90 per cent of small and medium business owners cited increased traffic congestion as an issue causing them personal concern while 69 per cent mentioned rising air pollution.

The suggestion that special fuel tax concessions should be made for businesses was rejected by almost half the respondents. Despite this business people are alarmed by the overall tax burden being placed upon them. The issue was highlighted by a quarter of businesses as their main worry, ranking second overall amongst all firms to government red tape.

One in three firms have, over the last five years, tried to cut their fuel bills by using company cars with smaller engines and lower fuel consumption. Almost half have considered increasing the number of staff who work from home.

"Business people are concerned by the effects of rising traffic levels and are prepared to support additional road use levies as a means of reducing congestion," said David Singleton, managing director of business banking at Lloyds TSB. "It is encouraging to see that business are willing to explore possibilities for reducing fuel consumption which can benefit both business and the environment."