I have been following, and occasionally contributing to, this thread as it’s a period in history which interests me and, horror of horrors, which I lived through. It makes me feel, if not old, at least grizzled!
The hidden assumption behind the OP’s first post is that the Reshaping and the subsequent loss of so many lines was in some way inevitable; I am not sure it was - at least in the form seen - if things had happened differently. So as this is in essence a fantasy thread I thought it would be interesting to identify the points, times and events in history where I think other choices could have been made. I have addressed some of these issues in other threads and forums but I’ll try to put all the argument into one place. I know I will never convince everyone but maybe one or two others may find my ramblings of interest.
I postulate that the actual causes lay a lot further back than Dr. Beeching’s time and that the
form of nationalisation chosen - not nationalisation
per se - essentially froze any development of the railways’ commercial and operational sides for a dozen years at a time of huge social, technical and economic change. People think that change happens quickly now - but from the end of the War to the late sixties the speed of change was breathtaking. With a different form of organisation and different requirements placed on its direction and management the railways could have started to adapt much earlier. The chances are that as a result Dr. Beeching would have remained an ICI senior manager, unknown to the public at large.
I will say at the outset that I have no truck with the personification and vilification of some of the actors in these events. Such simplification is often due to an approach which is purely political - one could say party political - but it disguises rather than clarifies the social, political and economic issues facing the Governments of the time and especially those facing the railways. This is not to say that the actors were infallible or sometimes incompetent or crooked or were even sometimes simply the wrong person for the job - but that happens at all times and in all endeavours: the railways were no exception.
There are several intertwined factors in this story:
- the legal framework
- the remit and structure of the British Transport Commission (BTC)
- the direction and management of the industry
- technological changes
- competitive changes
- the public’s expectations.
Starting with the legal framework, in this context the most significant Acts setting the legal framework for the railway business are the Railway and Canal Traffic Act 1854 and the 1947 Transport Act.
Gareth Marston in his posts rightly makes much of the effects of the ‘Common Carrier’ obligation dating back to the Railway and Canal Traffic Act and the way that this bound the railways’ hands in their commercial freedom. This lasted right through to the abolition of the Common Carrier concept by the 1962 Transport Act. I hold that there were three unintended consequences of the 1854 Act:
- the financial position of the railways was a lot weaker than it could have been as the Traffic Commissioners did not always grant the rates increases desired or in a timely manner. This became more pronounced during the time of the ‘Big Four’
- the rates were publicised so the emerging road hauliers could easily undercut the railways
- management accounting as known in other industries did not exist.
Road traffic in this period was also tightly controlled but ‘own account’ operators had much more freedom. By the late 1930s the railways’ financial position was becoming untenable and the ‘Big Four’ started the ‘Square Deal’ campaign to get the Common Carrier constraints eased. One can argue that it was already too late, but the campaign was anyway cut short by the outbreak of War.
After the war with the nationalisation of inland transport by the 1947 Transport Act made the Common Carrier obligation irrelevant as far as the Government was concerned as road goods and canal transport were also nationalised - whether by road, rail or canal the government carried your goods and in the great scheme of things it made no difference to the government as to which nationalised industry generated the income. There was therefore no incentive for the BTC - set up by the Act - to campaign for the abolishment of the obligation.
The nationalisation of the road haulage business by the 1947 Act had unintended consequences some years later. Carter Paterson, Pickfords, Wordie and the other road haulage companies that had been purchased by the railways before the war became the nucleus of the BTC’s Road Haulage Executive (RHE) which operated under the trading name of British Road Services (BRS). The RHE nationalised all road transport firms involved predominantly in ‘ordinary long distance carriage for hire or reward’. By the end of 1951 the RHE had acquired 3,766 businesses, with 80,212 staff and 41,265 vehicles.
There were some exceptions - operators of fleets of specialised vehicles, local haulage firms operating within a 25-mile radius (but who still needed a licence to carry on their business) and own-account operators, that is firms that operated ‘C’ licence vehicles for carrying their own goods as an adjunct to their manufacturing or trading businesses. Even my father’s delivery van - he being a master butcher and fishmonger - had a white paper disc, the size of the recently discontinued tax disc, shown in the windscreen with a large black ‘C’ on it.
In stark contrast to the nationalisation of the railways where there was no great change in the economic situation of the ‘owners’ as they were issued with Government stock as compensation, the nationalisation of the road companies turned the owners, who were frequently owner-drivers, into employees. Nationalisation therefore promptly generated nearly 4,000 dissatisfied and grumpy employees who used all the political power they could muster to get their livelihoods back.
Nationalisation also resulted in a massive increase in own-account operation by manufacturing and trading businesses that felt they could offer their customers a better or cheaper service by setting up their own transport operations. The numbers don’t lie - between 1947 and 1952 the number of own-account vehicles grew by 72%, while the numbers used by the RHE increased by only 1%. By 1952, 65% of
all goods vehicles over 2 tons unladen weight were operated on ‘C’ licences, that is outside the influence of the RHE.
So by the mid-1950s nationalised road haulage was a dead duck but it had the unintended consequence of creating a large fleet of new privately owned lorries all competing for business. The two week long ASLEF strike in 1955 played straight into the hands of these companies, sundries traffic and some wagonload traffic vanished from the railways overnight - never to return.
The third harmful effect of the Common Carrier Obligation was that it effectively made any effective form of management accounting superfluous. Not having management accounts was fine - but not ideal - as long as the income from the major traffics covered all the railways’ costs and the surplus was sufficient to keep the Directors and shareholders happy. However, as soon as this cash-flow started to slide away - and the slide became faster from 1950 onwards - the railways were flying blind. They did not know which traffic was profitable, or could be profitable or was loss making as the information was missing. Putting it another way: the railways had an income stream from freight - a revenue stream of a known size. Using it to subsidise other services only works if the donor revenue stream is greater than the costs incurred in generating it, otherwise all that happens is that by trying to reduce the losses on a loss making service by shifting the cost allocation simply makes another loss making service yet more loss making. One can only cross-subsidise if the total outgoings are less than the total revenue, then the issue is just cost allocation. If the business is losing money overall, then cross-subsidy merely complicates the management accounts and conceals the true source of the losses.
Although the income for each station and freight terminal was known the movement costs of each consignment and routing were not. Even if these were known - reducing costs of operation was difficult as the railway
had to carry the traffic presented. There were some practical limitations - parcels were not collected from oil refineries and day-old-chicks not loaded at coal pits but apart from that each public terminal was, in effect, general purpose, a jack-of-all-trades and master of none. The daily pick-up goods train was the logical consequence with all the costs and delays that involved.
The result of all this was that the only practical way to reduce costs was to close the local terminal or station. If it's not there, the public can’t offer traffic which otherwise had to be accepted - the railway did not have the freedom of being able to refuse some consignments (even by pricing itself out of the business) and accepting others. I fear that this method of cost reduction - used since 1854 - became ingrained in the railways’ psyche.
This is starting to get very long and I am wondering who, and how many, have reached this far. If there is any interest then I’ll do a bit more - especially to pick up on some of the more recent postings.
