Plan to charge real transport costs

Date: 16/07/1998

By Simon Coss

TRANSPORT Commissioner Neil Kinnock will next week unveil details of his strategy for making Europeans pay the real cost of their chosen modes of transport.

He is planning to publish a White Paper setting out how the principle of 'fair and efficient pricing' - a concept he first put forward in a consultative Green Paper three years ago - could work in practice.

"This is fair and efficient pricing mark two. It is a major document which will set out how to implement the ideas from the Green Paper," explained one Kinnock aide.

The Commissioner argues that the charges people currently pay for using different forms of transport do not reflect the real costs involved.

Officials say the most obvious example of this anomaly is the cost of using private cars. When environmental, infrastructure and other related expenses of using the continent's roads are added together, it becomes clear that motorists are paying far less than the real price of travelling by car.

However, the European Commission argues that other modes of transport, including commercial lorry traffic and railways, are also poorly priced.

"It is clear to everyone, wherever they live in the European Union, that the traffic problems we have today cannot be allowed to continue or the transport system will seize up," warned Kinnock recently.

"The solution lies in improved transport efficiency and traffic management, faster network connections and investment in key infrastructure links such as the Trans-European Networks. But central to realising all this is the concept of fairer and more efficient pricing systems."

The Commissioner is likely to suggest in his forthcoming White Paper that governments introduce differentiated systems of taxation and charges within particular forms of transport.

He argues, for example, it is wrong that a modern truck fitted with up-to-date anti-pollution equipment and travelling at off-peak times should pay the same charges as an old, dirty lorry on the road during the rush hour.

Kinnock will also argue that the current patchwork of national rules governing charges prevents the EU's internal market from functioning efficiently.

"In the road sector, for example, fuel taxes, vehicle duties and annual charges differ substantially across the member states and the nationality of the haulier has a significant impact on how much tax he or she pays, distorting competition in the internal market," the Commission noted following the recent publication of a report by a high-level group on the 'user pays' principle of transport pricing.

In its report, the group recommended that the same basic pricing system be applied across all major forms of transport within the EU.

But while Kinnock is clearly keen to cajole national governments to take what he sees as a more responsible attitude on pricing, his room for manoeuvre when it comes to proposing Union legislation on the issue is limited.

The key tools for adjusting transport pricing including, most significantly, the right to set road tax levels, remain in the hands of EU governments and national politicians are wary of upsetting their car-loving electorates.

Feature on White Paper on fair and efficient pricing in transport, issued July 1998.