TRADERS were left stunned last night after Oxford City Council announced plans to increase car park charges by an inflation-busting 15 per cent.

Business leaders warned the rise could lead to a New Year exodus as shoppers travelled to neighbouring towns for the sales.

The increases are planned to come into effect on January 1 and would push up the price of an hour’s parking at Gloucester Green car park from £2.50 to almost £3 during the week.

An hour in the Westgate car park would jump from £2 to £2.30 — only 10p less than it would cost to park at Reading’s Oracle shopping centre for two hours.

Richard Alden, a spokesman for the Covered Market Traders Association, said: “This is an unbelievable increase, which beggars belief in the current economic climate.”

Council leaders revealed their budget-setting proposals, which included savings of £5.4m.

City council leader Bob Price said pushing through the savings package, which would include the loss of 20 middle-management posts, was a “daunting prospect”.

He said the authority had been hit by the Icelandic banking crisis to the tune of £4.5m, the pensioners’ concessionary bus fares scheme, which will take the authority £500,000 over budget by the end of the financial year, and the overall effect of the credit crunch. Increasing car park charges would raise an estimated additional £500,000.

The proposal, which is still at the consultation stage, infuriated traders who have issued a plea for shoppers to support independent and family businesses.

Graham Jones, a spokesman for the Oxford High Street Association and traders’ group Rescue Oxford, said: “This is a ludicrous increase and a very good way to stifle the local economy.

“If shoppers can get free parking at one-stop shops out-of-town, then they will do it.”

Deputy city council leader Ed Turner said the increase was scheduled for January 1 to prevent the Christmas shopping period being affected.

He added: “The council has to make massive efficiency savings and we need to make ends meet in these very difficult times.

“We are doing this with a heavy heart to fund pressures that are not of our making.

“It’s there in the budget as an option and we will make the decision after hearing from traders and opposition councillors.

“We will listen.”

The Labour group proposals also include a council tax rise of five per cent, compared to the four per cent increase this year.

Mr Turner said the increase would amount to £2.50 per household per year, but city councillor David Rundle, leader of the Liberal Democrat opposition, said the increase would have a worrying impact on the poorest residents.

He said: “Worries about the council’s financial position have been around for a while, but this shows there is a crisis.”

The decision-making executive will consider the proposals on Wednesday before the annual budget setting meeting in February.

Oliver O’Dell, chief executive of city centre management company OX1, said: “The danger for the city council is that they won’t make the extra revenue because shoppers’ loyalty will be tested by the increase. The county council has made park-and-ride free parking, which might soften the blow.”