I find it interesting. Please continue.
One small addition to your point about the sudden and huge increase in own account road vehicles: one of the comically absurd elements of the rail nationalisation was that privately owned rail wagons, most of which were in very poor condition, were also and quite unnecessarily taken into public ownership. The result was that tax-payers' money had to be handed over in exchange for this worthless junk, and the money was spent on brand new road vehicles which were then used instead of the railway! Such a clever and expensive way to lose business!
The next instalment of my magnum opus…
This bit covers the missed opportunities and mis-judgements of the early nationalisation period.
The 1947 Act nationalising inland transport set up the British Transport Commission (BTC) as the top level organisation to encourage each form of transport to specialise in the types of services for which it was most suited. It also set up the public bodies known as 'Executives' for each of the businesses to assist it in this task and to act as its agents. The history of the relationships between the BTC and its various 'agents' is complex.
The
form of nationalisation was flawed (not necessarily nationalisation
per se) in the sense that the structure of the organisations defined in the Act was not capable of delivering the aims set out in the Act. The aim was the coordination of inland transport, so it would have been sensible to have set up the BTC functionally - operations, commercial, engineering, financial and so on - so the most effective mode, or modes, for a particular movement could have been identified. But the Act setting up the BTC also set up its 'agents' by form of transport, e.g., the Railway Executive (RE), the Docks and Inland Waterways Executive, Road Transport Executive, London Transport Executive and later there was to be a Hotels Executive.
The aim of the Government was the integration of inland transport, but the Act did not include bus operations. There was no Road Passenger Traffic Executive, only a pious hope (section 63 (1)) that the BTC would consider each geographical area and prepare and propose a ‘scheme’ to meet the needs of each area to the Minister. So, integration between trains and buses did not happen because, as far as I am aware, no ‘scheme’ was ever prepared or approved.
The section covering road haulage defined closely the types of organisations that would be ‘acquired’, but then goes on to say that if you are running an organisation which looks as if it fits the bill for acquisition, but you don’t receive a notice of acquisition then you have inform the RHE and say you think you should be acquired…
How to win friends.
Clearly, the drafters of the Act could cope with a few large entities, and even then they ducked out by stating that the railway and canal companies to be nationalised were those
…the whole or any part of which is at the date of the passing of this Act under the control of the Minister by virtue of an order made under Regulation sixty-nine of the Defence (General) Regulations, 1939…
(Although, to be fair, the companies were listed in the Third Schedule).
One can draw two conclusions:
• the Government saw nationalisation of the railways and canals as a continuation of the (Government controlled) wartime
status quo
and
• they were on uncharted territory when confronted with the diverse road industry.
If the BTC’s organising remit was essentially that of the war-time railway group in the Ministry of Transport, it partially explains why the BTC’s financial remit was, to say the least, vague. Section 3 (4):
…and the Commission shall so conduct that undertaking and, subject to the provisions of this Act, levy such fares, rates, tolls, dues and other charges as to secure that the revenues of the Commission is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another.
The bizarre thing about this is that, with the Common Carrier obligations from the various Canal and Railway Traffic Acts still in force, the “fares, rates, tolls, dues and other charges” were not directly under the control of the BTC, but of the Traffic Commissioners (also specified in the Act) who had to adjudicate on rates and charges but were under no time pressure to do so.
Capital expenditure required ministerial approval, Section 4 (2):
In framing programmes of reorganisation or development involving substantial outlay on capital account, the Commission shall act on lines settled from time to time with the approval of the Minister.
The BTC was allowed to borrow by issuing British Transport stock, but only up to a limit of £250 million.
The Act made no requirements about return on capital or service levels or improvements or customer satisfaction or anything else. Interestingly the BTC was supposed to generate sufficient funds to pay the dividend on the Government stock which had been issued to the shareholders of the Big Four and the other nationalised organisations. How this was supposed to work is anybody’s guess - the business was essentially the same as that run by the Big Four, at least one member of which which reputedly had difficulties in paying its dividends, but now it was expected to pay out more than the private companies would have done. Perhaps the missing money was to come from the canal business…
The Executives were curious beasts, not in the least that the Government appointed the members of these Executives directly. The result was of course that each Executive fought its own corner and the BTC had precious little control over them - it did not control the Executives' budgets except at the highest level and it could not move Members of an Executive to a different job or fire those who were thwarting the aims of the Commission because these Members had been appointed by the Government.
So the RE kept the Commission - which it saw more as a supervisory board - at arm's length by sending it only edited copies of its Minutes. It ran itself as if it were a railway company operating in isolation so when the BTC was concerned that the RE was pressing for new designs of steam locomotives and showing a complete lack of interest in the potential of diesel traction it could not change the RE’s stance. The BTC's records show that it took action after noting the speed with which the Railway Executive was tackling the standardisation of steam motive power - the RE had set up the Locomotive Standards Committee on 8 January 1948 within a week of nationalisation. In April 1948, the same month that the locomotive exchanges took place, the BTC’s Chairman (Cyril Hurcomb) wrote to the Chairman of the RE (Eustace Missenden) to express his dissatisfaction with the progress made in assessing the merits of different forms of traction. The reaction was grudging - it took over 8 months for a committee to be set up at RE Headquarters (on 20 December 1948) under J. L. Harrington, the Chief Officer (Administration) to study other forms of traction. It finally reported at the end of 1951 -
three and a half years later.
One of the extraordinary features of the Harrington report was the very crude nature of the financial figures presented. The cost comparisons were for built cost of the locomotives - no effort was made to relate operating costs to different manning levels or utilisation or to identify costs/ton-mile or per passenger-mile. It would seem that the RE had little need for financial analysis in deciding its traction policy, nor did it need the BTC to shove its oar in.
The point to remember is that others
at the time were critical of the choices made by the RE - but the structure of the railway business made it impossible for anyone to change the RE’s policy. The later abolition of the RE and the takeover of the railways by the BTC didn’t really change much - if anything things got worse because of the increase in the span of command at the top levels. Having an army man in charge, as good a soldier as he was, didn’t result in commercial, financial and money matters being giving the attention they deserved. The railways were an organisation to be administered, not a business to be managed.
If, that little word again, the 1947 Act had set up the BTC not only to co-ordinate but also to manage inland transport and then left the details of its organisational structure for it to work out itself, then there would have been a fighting chance that the development of the railways in the years to come would have been very different. For this to have happened would have required a very different attitude at the top of the organisation and, indeed, the Government. With the mindset at the time - and the choice of a long serving civil servant (who was previously Permanent Under-Secretary of, successively, the Ministry of Transport, the Ministry of Shipping and then of its successor the Ministry of War Transport from 1941 until his appointment as Chairman of the BTC in 1947) it was clear that administration rather than active management was the order of the day. Britain has just emerged from a war one of the aims of which was the preservation of its way of life - so, logically, everything that had worked before the war would continue to work the same way - it was what we were trying to preserve. Although the Attlee government had nationalised about a fifth of the economy in essence nothing had changed - only the ownership.
Similarly the nationalised railways' early ‘Boards of Directors’, the BTC and the RE, did not understand that the world had changed dramatically from that of 1939.
There is a big difference between the ‘Direction’ of an organisation and the ‘Management’ of it, but they are complementary - competent management cannot counteract the malign effects of incompetent direction (you can be very good at doing the wrong things) and the best direction needs competent managers to implement the decisions effectively. Good direction requires that one can read the significant of the straws in the wind and change the course of the business suitably. I maintain that BR was badly served at this time.
At the end of the War there there only two properly functioning economies in the West - the USA and the UK. Europe was a basket case - cities, industries, economies and countries ravaged and starvation was only avoided in some areas due to the efforts of the American and British armies.
There were serious labour shortages in the UK; some 265,000 men had been killed in action - all of them fit and most of them young - and nearly 93,000 civilians. The Empire Windrush arrived in 1948 to try to help fill the labour shortage. Wages were increasing, it was becoming increasingly difficult to attract staff to the dirty jobs done during unsocial hours.
Technology had advanced tremendously during the War. Many, if not all, of those being demobbed had experience of high speed internal combustion engines - all those lorries, jeeps, tanks and aircraft - and electronic communications. Some of them even knew about jet engines. And yet the RE continued to build to build steam engines as if were still 1935 and operate train services using labour intensive technologies and methods dating back to the 19th century - and showed no sign of wanting to change.
The RE didn’t stop to even ask itself whether the system it inherited was matched to its current, or possible future, business. It carried out no traffic studies, it made no effect to determine whether the system could be worked with fewer people and, if so, how. It did not seek to find out how it could
increase its business.
At the time BR was created the LMS had built diesel shunters and prototype main line diesels and the Southern had designed some more of the latter. The GWR had built a series of diesel railcars in the 1930s and ordered some gas turbine main line locomotives. By 1939 the Southern had already electrified significant parts of its network and the LNER had planned the Woodhead and Shinfield electrifications. The RE was correct in aiming for electric operation as the future ideal, yet it ignored the potential of diesel railcars and locomotives in improving performance step by step and getting rid of some of the most unpleasant jobs in the country as it moved towards its future goal. Instead it concentrated on the development and construction of the ‘Standard’ steam locomotives.
Whew…!