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Nationalisation in 1948 and Privatisation in 1994

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coppercapped

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Isn't that sort of two different questions though?

1) should the railways have been nationalised?

2) Given that they were nationalised, was the approach correct?


With the benefit of hindsight of course :)


Edit:
The first is more of an ideological question than the second I think.

The answer to question 1) is - that is the wrong question!

If only the railways had been nationalised, then I would have had no argument with it - but only if it was clear why they were being nationalised.

The point is though that the 1947 Transport Act nationalised not only the railways but all inland transport under the direction of the BTC with an aim of setting up an integrated transport system.

The answer to question 2) is that the approach chosen was fundamentally flawed in trying to deliver the aims of the Transport Act. The structure chosen could never have given the result required. This led directly to the infighting between the BTC and the Railway Executive which cost the railways dearly in the years to come.
 
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gingerheid

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Has who deducted a management fee? And a management fee for what?

Has Abellio in the Netherlands deducted a management fee for running Scotrail's services from Scotrail's profit?

The statement of the "profit" of one company in a group is almost meaningless in an environment when it can easily be manipulated to suit political ends; such as looking to appear to not be making too much money at the hands of Scottish taxpayers.

The accounts show a further £12m owed to someone else in the group that isn't Northern Rail, so it's possible that part of the profit is being diverted to another entity (or it's possible that someone in the group genuinely did provide that amount of value to Scotrail for services that it had not yet been paid for).
 

Shaw S Hunter

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People get hung up over ownership. That is not really the issue - the real issue is about the targets that management must meet and the framework within which it can operate to meet them. The situation for private companies is simple - they have to make a profit to survive and not break the Law. Nationalised businesses are more complex in that they often have to meet political, social and economic targets at the same time - and sometimes these are mutually incompatible.

How very true. That's the trouble with ideology, as well as the idea that politicians who change their minds in the light of experience are seen as weak.

What I do object to is the knee-jerk reaction that any changes made to BR were, practically by definition, evil, made by evil people and brought bad things on us. This smacks of being a mixture of religious and political fervour and does not help in plotting a path to the future. It is conservatism of the highest order.

Imagine how boring this forum would be without people expressing such views here!

One of my big problems is with unnecessary upheaval, which is why, in spite of my disagreement with the original privatisation process, I'm relaxed about keeping the current structures in place, particularly now that things have settled down.

Gerry Fiennes best quote was "when you re-organise you bleed". He knew it 50 years ago but politicians refuse to accept it. They've been tinkering with education throughout my life and they're still doing it!

Nevertheless, there seems to be a school of thought that just because things have worked out well in the end (usually because those on the ground who get hit with these ideologically driven upheavals, have finally got whatever hairbrained scheme dreamt up by the politicians, working in some form) that we should forgive badly thought out policy decisions and their misguided motivations. This effectively gives Governments carte blanche to throw all the balls up in the air whenever they feel like it, even when they haven't got a clue how such schemes will work out for the country.

That's exactly what I meant when I mentioned our adversarial parliament. The main parties justify much of their manifestos by them being different to "the other lot". People seem happy to rally around parties or movements which seek to position themselves in a quite extreme position but surely what we really need is a much stronger centre ground in our politics. We might then reach some consensus and actually enact steady policies over long periods of time. This is especially important for railways given the inevitably long gestation periods of railway development schemes.
 

Gareth Marston

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The answer to question 1) is - that is the wrong question!

If only the railways had been nationalised, then I would have had no argument with it - but only if it was clear why they were being nationalised.

The point is though that the 1947 Transport Act nationalised not only the railways but all inland transport under the direction of the BTC with an aim of setting up an integrated transport system.

The answer to question 2) is that the approach chosen was fundamentally flawed in trying to deliver the aims of the Transport Act. The structure chosen could never have given the result required. This led directly to the infighting between the BTC and the Railway Executive which cost the railways dearly in the years to come.

Whatever any structural faults the fact remains that the road element particularly haulage actively undermined the whole thing with the Conservative Government from 1950 happily turning a blind eye and even encouraging it. There choice of a retired General to oversee the BTC was hardly inspiring as the word was his wife had words down the local conservative association to find something for him to do as he was cluttering the house up on his retirement.
 

HH

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Has Abellio in the Netherlands deducted a management fee for running Scotrail's services from Scotrail's profit?

From what I know Abellio in the UK charges a small management fee to its franchises, to cover specific duties carried out by the UK HO. There's no massive movement of profits. In fact there is a limit to "pure" management fees that owning groups can charge TOCs. It's part of the Franchise Agreement/ITT.

Sorry to rain on your conspiracy theory.

--- old post above --- --- new post below ---
Gerry Fiennes best quote was "when you re-organise you bleed". He knew it 50 years ago but politicians refuse to accept it. They've been tinkering with education throughout my life and they're still doing it!

Don't even ask how many times DfT or Network Rail have reorganised!
 
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coppercapped

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Whatever any structural faults the fact remains that the road element particularly haulage actively undermined the whole thing with the Conservative Government from 1950 happily turning a blind eye and even encouraging it. There choice of a retired General to oversee the BTC was hardly inspiring as the word was his wife had words down the local conservative association to find something for him to do as he was cluttering the house up on his retirement.

You've missed the point. All the Executives did their own thing quasi-independently of the BTC. The London Transport Executive was another which practically ignored directions from the BTC - and most people took it as 'a good thing'.

The reason road transport didn't fit was that the BTC was too big to be able to focus on the needs of individual businesses - the ABC Widgets Limited of this world that wanted a few boxes of stuff to be delivered to some customers tomorrow. It was too inflexible to be able to arrange such moves quickly - so more and more companies started getting their own 'C' Licences - to move goods on their own account - and the whole thing crumbled.

And the General you mention wasn't appointed until 1953. The first chairman of the BTC was a career civil servant from the Ministry of Shipping and later the Ministry of War Transport, Sir Cyril Hurcomb.
 

Gareth Marston

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You've missed the point. All the Executives did their own thing quasi-independently of the BTC. The London Transport Executive was another which practically ignored directions from the BTC - and most people took it as 'a good thing'.

The reason road transport didn't fit was that the BTC was too big to be able to focus on the needs of individual businesses - the ABC Widgets Limited of this world that wanted a few boxes of stuff to be delivered to some customers tomorrow. It was too inflexible to be able to arrange such moves quickly - so more and more companies started getting their own 'C' Licences - to move goods on their own account - and the whole thing crumbled.

And the General you mention wasn't appointed until 1953. The first chairman of the BTC was a career civil servant from the Ministry of Shipping and later the Ministry of War Transport, Sir Cyril Hurcomb.

You cant deny that the road interests esp road haulage actively undermined the whole concept -for whatever reason. BTC's success or failures nether confirm or deny rail nationalisation was right or wrong. Given that Government had used Victorian legislation designed to counteract a possible French war in the 1860's to control the railways without adequate compensation in two world wars meant the railways finances were up the creek without a paddle whether you support nationalisation or privatisation.
 

ChiefPlanner

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You cant deny that the road interests esp road haulage actively undermined the whole concept -for whatever reason. BTC's success or failures nether confirm or deny rail nationalisation was right or wrong. Given that Government had used Victorian legislation designed to counteract a possible French war in the 1860's to control the railways without adequate compensation in two world wars meant the railways finances were up the creek without a paddle whether you support nationalisation or privatisation.

Clem Attlees Government were very "nationalisation" biased - not just for railways and the finances of the Big 4 were suspect enough before WW2 - let alone after it.

British Railways struggled with a terrible legacy of WW2 resource (and human) fatigue , after a low investment strategy (bar the honourable exception of the Southern Electric) - and a grave shortage of resources - even steel for rails and new wagons up to about 1954. The Modernisation Plan was really too late and often in the wrong areas - but this has been done to Death elsewhere.
 

coppercapped

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You cant deny that the road interests esp road haulage actively undermined the whole concept -for whatever reason. BTC's success or failures nether confirm or deny rail nationalisation was right or wrong. Given that Government had used Victorian legislation designed to counteract a possible French war in the 1860's to control the railways without adequate compensation in two world wars meant the railways finances were up the creek without a paddle whether you support nationalisation or privatisation.

I’m not sure that I understand what you mean by ‘the whole concept’. Do you mean that road transport interests tried to undermine the way the BTC ran, or tried to run, the different Executives - London Transport, Railways, Canals, Docks etc. or just the concept of the nationalised railway?

There was no conspiracy if that’s what you are implying - the road transport industry was a very different business to the others that the Government nationalised. All that nationalisation of road transport showed was that central control of a diversified industry does not work.

Carter Paterson & Co, Pickfords, Wordie & Co and the other road haulage companies that had been purchased by the railways before the war, became the nucleus of the Road Haulage Executive (RHE) which operated under the trading name of British Road Services (BRS). The RHE continued the process of nationalising all road transport firms involved predominantly in ‘ordinary long distance carriage for hire or reward’. There were some exceptions - operators of fleets of specialised vehicles, local haulage firms operating within a 25-mile radius (but who 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.

By the end of 1951 the RHE had acquired 3,766 businesses, with 80,212 staff and 41,265 vehicles.
In comparison to the nationalisation of the railways when shareholders were issued with Government stock as compensation so there was no great change in the economic situation of the ‘owners’, the nationalisation of the road companies turned the owners, who were frequently owner-drivers, into employees. Nationalisation promptly generated nearly 4,000 dissatisfied, independently-minded and grumpy employees who used all the political power they had to get their livelihood 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. Between 1947 and 1952 the number of own- account vehicles grew by 72%, while the numbers employed by public hauliers increased by only 1%. By 1952, 65% of all goods vehicles over 2 tons unladen weight were operated on ‘C’ licences.

And the entrepreneurs were more flexible than the RHE. The founder of one transport company in the North West of England finished his National Service with the RAF in 1950, borrowed the funds from his father to buy his first lorry, a 4 wheel Thorneycroft which he purchased in Darwen to ensure his 25-mile licence would enable him to include Manchester in his operating area. It proved to be a successful strategy: he soon bought another vehicle and employed his first full time driver.

There was no conspiracy. The RHE foundered because it was inflexible and was seen to have pushed up haulage rates of the businesses it had acquired and because the Government had enabled it to expropriate the businesses and livelihood of too many people.

The railways’ finances were in bad shape before the Second World War. The Common Carrier Obligation meant they had to carry any traffic offered (with some minor exceptions) at published rates and the Railway Rates Tribunal set the rates that could be charged, but getting any increase to cover increased costs always took too long. By the mid-1930s both these concepts were crippling the railways’ finances, but rather than removing them the 1947 Transport Act preserved both of them in aspic.

The particular form of nationalisation chosen in 1947 was an unmitigated disaster for both the railway business and the country as a whole.
 

yorksrob

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Truth it may be, but with little relevance to where the nationalised railway was in 1992 and the consequent model of privatisation as touched on in the theme of the thread.

I don't recall anyone on the forum arguing that it was wrong to move on from the BTC, or to repeal the common carrier provisions - unless I've missed it.
--- old post above --- --- new post below ---
(The title of the thread has been changed since my above post)
 
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Greenback

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I've split this thread from the original discussion about Scotland and the Dutch operator there, as the discussion about nationalisation and privatisation had become utterly off topic.

As part of creating a new thread, I assigned a new title.
 

MarlowDonkey

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The original (Mark 1) version of privatisation foresaw a state-owned organisation (a Track Authority to be called 'Railtrack') owning the infrastructure which would be funded on the same basis as the trunk roads authority.

Railtrack was a Company floated on the Stock Exchange alongside such other ex public sector organisations such as British Gas, British Telecom, British Airways, regional Electricity and Water companies etc. Perhaps the nearest parallel was BAA which owned and operated several airports including Heathrow and Gatwick.

Who knows? If road tolling ever became practical or politically acceptable, would there ever be a privatised road authority on the Railtrack model?


It might have been possible to float British Rail for sale to the public, either as a whole, by region, or by sector. The Government chose to pay excess heed to an EU Directive permitting open access and got it into its head that it needed to separate the ownership of infrastructure from operations. That was unnecessary as if you read the small print, it was only required that they be accounted separately. That's the approach that has enabled the major European railways such as SNCF, DB etc to continue as monoliths.
 

Senex

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It might have been possible to float British Rail for sale to the public, either as a whole, by region, or by sector. The Government chose to pay excess heed to an EU Directive permitting open access and got it into its head that it needed to separate the ownership of infrastructure from operations. That was unnecessary as if you read the small print, it was only required that they be accounted separately. That's the approach that has enabled the major European railways such as SNCF, DB etc to continue as monoliths.
I wonder whether that particular response to the EU directive was a typical example of Britain's civil service thinking it had to be so much better at responding than anyone else, or whether it suited the advisers at the time who were determined to smash British Railways beyond re-assembly (and thus to have nothing to do with Major's reported wish to see a re-creation of the Big Four companies). There were certainly alternative models, almost all of which would have been better than what we got.
 

Harbornite

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National Express for some inter-regional routes in the Rhein-Ruhr area of Germany and the Nürnburg S-Bahn. German franchises are not the same as UK ones in that there is no regional monopoly and the franchisee does not carry the revenue risk.

There are some others elsewhere but I can't remember the details off-hand without looking them up. :(

National Express (I think) have just won a contract to oeprate passenger trains in Texas.
 

Helvellyn

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Railtrack was a Company floated on the Stock Exchange alongside such other ex public sector organisations such as British Gas, British Telecom, British Airways, regional Electricity and Water companies etc. Perhaps the nearest parallel was BAA which owned and operated several airports including Heathrow and Gatwick.

Who knows? If road tolling ever became practical or politically acceptable, would there ever be a privatised road authority on the Railtrack model?


It might have been possible to float British Rail for sale to the public, either as a whole, by region, or by sector. The Government chose to pay excess heed to an EU Directive permitting open access and got it into its head that it needed to separate the ownership of infrastructure from operations. That was unnecessary as if you read the small print, it was only required that they be accounted separately. That's the approach that has enabled the major European railways such as SNCF, DB etc to continue as monoliths.
I wonder whether that particular response to the EU directive was a typical example of Britain's civil service thinking it had to be so much better at responding than anyone else, or whether it suited the advisers at the time who were determined to smash British Railways beyond re-assembly (and thus to have nothing to do with Major's reported wish to see a re-creation of the Big Four companies). There were certainly alternative models, almost all of which would have been better than what we got.
The Thatcher privatisations of the 1980s largely took the nationalised company and sold it off to the public. The Major privatisations of the 1990s seemed to be about introducing competition - The CEGB was split up; British Coal was split up.

John Major harked back to the like of the GWR, LMS, LNER, SR. That could have been a model for privatisation. So to could have been to sell off the sectors - possibly with RR remaining state owned due to the subsidies needed. It almost seemed to be the case though that it was about splitting BR up into as many companies as possible (92 rings a bell for some reason).

Hindsight is a wonderful thing but personally I would have looked at something like this: -

  • InterCity (Great Western, West Coast, Midland Mainline, East Coast plus the Sleepers, Motorail and VIP element of the Charter unit)
    • Strip InterCity down to the core mainline London routes with strong premium demand. Sleepers and Motorail would have remained part of this. The VIP Charter unit would have fitted within the premium nature of the company.
  • NSE North (LTS, Great Eastern, InterCity Anglia, Regional Railways Anglia, West Anglia Great Northern, North Western lines, North London Line, Chiltern, Thames).
    • Whilst NSE could have been sold off as one, having a North/South Thames split might have made some sense.
    • Adding what became Anglia Railways just feels logical.
  • NSE South (South Western, South Central, South Eastern, Thameslink, InterCity Gatwick Express)
    • Whilst NSE could have been sold off as one, having a North/South Thames split might have made some sense.
    • Gatwick Express being added seems logical or could have been run jointly with BAA (as I think the initial plan was for Heathrow Express).
  • CrossCountry (InterCity CrossCountry, Regional Railways Express/Alphaline in England/Wales, non-VIP Charter unit)
    • Create a proper regional operator offering InterCity style quality.
    • Give it the non-VIP element of the InterCity charter unit as a national operator.
  • Trainload Freight
    • Rather than split into three regional companies just sell it off as one company.
  • Railfreight Distribution/Freightliner
    • Again, I wouldn't have split this into two companies but just have sold it off as one.
  • Rail Express Systems
    • Potentially sell it off, or given that the primary customer was Royal Mail keep it publically owned but transfer it to the ownership of the Post Office Group.

  • Remaining Regional Railways services could have been kept publically owned due to the fact that they were in need of subsidy. Or possibly have the company run on a Management Contract.
  • ScotRail could potentially have been sold off separately, or run on either of the models proposed for Regional Railways. Would have been a way of placating some of the anti-English (or rather anti-Tory) feelings in Scotland.
  • BRML - sell off as one company just as happened with BREL.
    • Likely some rationalisation of sites would have still taken place over time, but potentially could have seen BRML complete with BREL/ABB and Met-Camm (GE Alsthom).
  • Run Railtrack as proposed, i.e. state owned company/agency.
    • Essentially undo the BR 'Organising for Quality' changes to recreate a Civil Engineers department, etc.
    • Keep the BR Research Technical Centre complete as part of its organisation to do the same role as BR did.
 

coppercapped

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Truth it may be, but with little relevance to where the nationalised railway was in 1992 and the consequent model of privatisation as touched on in the theme of the thread.

I don't recall anyone on the forum arguing that it was wrong to move on from the BTC, or to repeal the common carrier provisions - unless I've missed it.
--- old post above --- --- new post below ---
(The title of the thread has been changed since my above post)

Au contraire! The state of the railways in 1992 was a direct consequence of the flawed 1947 Transport Act which had the effect of stopping the railways evolving commercially, financially and managerially for the next 15 years and technically for more than a decade. They should have been in the organisational position of 1992 by 1970 at the latest.
 
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Heartland

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With Central Mark Causebrook led a MBO but National Express won that Franchise
--- old post above --- --- new post below ---
Looking at this thread in detail, there have been points made, and perhaps scored, for both sides of the discussion. Putting aside the wrights or wrongs of the past, the current situation is basically the railways are still, for most examples, Government owned. There is still a Board, but they are hidden in the office of the DfT. Aspects of Railway Operation are franchised out to the train operators and others. Those that are franchises are motivated by profit, as were the pre grouping railway companies. When funds dry up. such operators may move on. No matter how many layers of obscurity is ladled on to the surface, the reality of that surface remains. The question is- is this still the best option or did Labour have a better solution with returning companies to the fold once the franchise expired. With East Coast the experiment would appear to have been a success. If ever there was a case for a second example, the troubled Southern Franchise must be a prime candidate. When a model is flawed one option is to fix it another is to find another model. No doubt somebody on this site will think of other options.
--- old post above --- --- new post below ---
Looking at this thread in detail, there have been points made, and perhaps scored, for both sides of the discussion. Putting aside the wrights or wrongs of the past, the current situation is basically the railways are still, for most examples, Government owned. There is still a Board, but they are hidden in the office of the DfT. Aspects of Railway Operation are franchised out to the train operators and others. Those that are franchises are motivated by profit, as were the pre grouping railway companies. When funds dry up. such operators may move on. No matter how many layers of obscurity is ladled on to the surface, the reality of that surface remains. The question is- is this still the best option or did Labour have a better solution with returning companies to the fold once the franchise expired. With East Coast the experiment would appear to have been a success. If ever there was a case for a second example, the troubled Southern Franchise must be a prime candidate. When a model is flawed one option is to fix it another is to find another model. No doubt somebody on this site will think of other options.
 

yorksrob

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Au contraire! The state of the railways in 1992 was a direct consequence of the flawed 1947 Transport Act which had the effect of stopping the railways evolving commercially, financially and managerially for the next 15 years and technically for more than a decade. They should have been in the organisational position of 1992 by 1970 at the latest.

There was a lot of complicated interaction between technical and organisational development on the railways, politics and social change and the rise of the motorcar between 1947 and 1992. I don't see how you can assume that had the railways not been nationalised in 1947, we would have had a linear march of progress ending up nicely organised and sorted out(roughly where they were in 1992) by 1970. For starters, we would have most likely kept the big four, which most likely would have carried on as before. It's hard to see how a unified concept of InterCity and its brand could have developed in these circumstances.
 

coppercapped

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There was a lot of complicated interaction between technical and organisational development on the railways, politics and social change and the rise of the motorcar between 1947 and 1992. I don't see how you can assume that had the railways not been nationalised in 1947, we would have had a linear march of progress ending up nicely organised and sorted out(roughly where they were in 1992) by 1970. For starters, we would have most likely kept the big four, which most likely would have carried on as before. It's hard to see how a unified concept of InterCity and its brand could have developed in these circumstances.

Try reading what I wrote. My point is that the 1947 Transport Act was flawed because the structure it dictated was not fit for purpose. It set the railways in aspic based on their 1939 social and legal framework although by 1947 much had changed. Although the railways were run down at the end of the war - as was almost everything else in the country - no funds were made available for their recovery.

This is not saying that the railways could not have been, or should not have been, nationalised and given a more suitable structure and set challenging performance and financial targets. But they weren't - and Attlee's economic ignoramuses set the scene for the 'Beeching Cuts'.
 

yorksrob

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My point is that the 1947 Transport Act was flawed because the structure it dictated was not fit for purpose. It set the railways in aspic based on their 1939 social and legal framework although by 1947 much had changed. Although the railways were run down at the end of the war - as was almost everything else in the country - no funds were made available for their recovery.

This is not saying that the railways could not have been, or should not have been, nationalised and given a more suitable structure and set challenging performance and financial targets. But they weren't - and Attlee's economic ignoramuses set the scene for the 'Beeching Cuts'.

The 1947 transport act may well have been flawed. The point is, it it was gone in fifteen years. If you want challenging performance and financial targets you couldn't want for a more challenging financial and performance regime than BR up until privatisation.

As for the Beeching cuts, Beeching and his sponsors in Government bear responsibility for the way in which they were done. Beeching was very much the standard bearer for that point of view on the Stedeford committee. It should be remembered that the era also produced the Mk2's, CWR, first stirrings of InterCity etc.

I also think your view of 1947-62 era is too black and white. There were some very good steps forward, such as electrification of Kent, the WCML and Southend. There was a vast renewal of passenger stock which stood the railway in good stead for many years (unlike post 1994 when the rolling stock industry was allowed to stagnate). I think you've possibly got the ideological blinkers on.
 

coppercapped

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The 1947 transport act may well have been flawed. The point is, it it was gone in fifteen years. If you want challenging performance and financial targets you couldn't want for a more challenging financial and performance regime than BR up until privatisation.

As for the Beeching cuts, Beeching and his sponsors in Government bear responsibility for the way in which they were done. Beeching was very much the standard bearer for that point of view on the Stedeford committee. It should be remembered that the era also produced the Mk2's, CWR, first stirrings of InterCity etc.

I also think your view of 1947-62 era is too black and white. There were some very good steps forward, such as electrification of Kent, the WCML and Southend. There was a vast renewal of passenger stock which stood the railway in good stead for many years (unlike post 1994 when the rolling stock industry was allowed to stagnate). I think you've possibly got the ideological blinkers on.

My argument rests on two basic premises:

  1. If the legal framework of the 1962 Transport Act had been enacted in 1947 - that is if the Common Carrier obligations remaining from the 1854 Railway and Canal Traffic Act had been removed as well as the powers of the Traffic Commissioners to set rates, then the railways would have had to develop a method of management accounting and cost allocation 15 years earlier than they did.
  2. If the Attlee government had not treated the Marshall Aid money as windfall taxation receipts but treated it as an opportunity to invest in the postwar infrastructure of railways, harbours, roads and so on, then the railways would have had a fighting chance of starting to update its infrastructure earlier than the late 1950s. In particular by 1948 they could have started to replace the assets worn out during the war. But the then Government made no funds available to the railways, or any other productive industry. As I said, they were economic ignoramuses.

In this sense it matters not one iota whether the railways remained under private ownership or if they were nationalised. As long as the Common Carrier obligation remained, there was no need for the management to be able to understand the costs of doing business and where these costs arose - as long as total income was slightly greater than total expenditure.

As soon as expenditure exceeded income the management was rudderless.

You seem to be having great difficulty in grasping that if, immediately after the war, the railways had been able to (a) understand their cost structures, (b) identify those services which generated a positive cash flow and (c) worked out which businesses they should concentrate on winning then there would not have been a Stedeford committee and Beeching would have retired from ICI without the general public ever having heard of him.

This is not to say there would have been no line and route closures - many branch lines would have faded away anyway - as the world had changed irrevocably. But by being able to more quickly adapt the railways operationally, organisationally and physically some of the secondary lines might have survived as there may not have been (a) such a dramatic loss of traffic as there actually was and (b) the costs of operation could have been reduced earlier and faster.

The issue is not about technical successes, such as the Shenfield and Southend electrifications or any of the other things you mention, but about business success. And that was sorely lacking until 1982 when with Sectorisation BR started to run itself as a commercial business. But, ye gods, it took them 34 years to get there.
 
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ChiefPlanner

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One major issue was the desperate lack of basic resources - steel in particular - let alone oil (for dieselisation) which hampered "renewals and modernisation" in the immediate post war era ..

Well made points , I do not think that even local managers had cost budgets until well into the 1960's , if not the 1980's ! - and "traffic costing" was an art not known until probably the 1960's ....
 

yorksrob

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My argument rests on two basic premises:

  1. If the legal framework of the 1962 Transport Act had been enacted in 1947 - that is if the Common Carrier obligations remaining from the 1854 Railway and Canal Traffic Act had been removed as well as the powers of the Traffic Commissioners to set rates, then the railways would have had to develop a method of management accounting and cost allocation 15 years earlier than they did.
  2. If the Attlee government had not treated the Marshall Aid money as windfall taxation receipts but treated it as an opportunity to invest in the postwar infrastructure of railways, harbours, roads and so on, then the railways would have had a fighting chance of starting to update its infrastructure earlier than the late 1950s. In particular by 1948 they could have started to replace the assets worn out during the war. But the then Government made no funds available to the railways, or any other productive industry. As I said, they were economic ignoramuses.

In this sense it matters not one iota whether the railways remained under private ownership or if they were nationalised. As long as the Common Carrier obligation remained, there was no need for the management to be able to understand the costs of doing business and where these costs arose - as long as total income was slightly greater than total expenditure.

As soon as expenditure exceeded income the management was rudderless.

You seem to be having great difficulty in grasping that if, immediately after the war, the railways had been able to (a) understand their cost structures, (b) identify those services which generated a positive cash flow and (c) worked out which businesses they should concentrate on winning then there would not have been a Stedeford committee and Beeching would have retired from ICI without the general public ever having heard of him.

This is not to say there would have been no line and route closures - many branch lines would have faded away anyway - as the world had changed irrevocably. But by being able to more quickly adapt the railways operationally, organisationally and physically some of the secondary lines might have survived as there may not have been (a) such a dramatic loss of traffic as there actually was and (b) the costs of operation could have been reduced earlier and faster.

The issue is not about technical successes, such as the Shenfield and Southend electrifications or any of the other things you mention, but about business success. And that was sorely lacking until 1982 when with Sectorisation BR started to run itself as a commercial business. But, ye gods, it took them 34 years to get there.

To quote a previous post of yours:

Au contraire! The state of the railways in 1992 was a direct consequence of the flawed 1947 Transport Act which had the effect of stopping the railways evolving commercially, financially and managerially for the next 15 years and technically for more than a decade. They should have been in the organisational position of 1992 by 1970 at the latest.

You seem to be having difficulty making up your mind whether technical competence and development had a bearing on the success of the railway at during the period in question.

I'll help you out. It is absolutely about technical successes. Technical successes are important in their own right, but you don't get multiple technical successes without managerial competence.

Between 1947 and 1962, the Southern Region achieved:
  • The complete replacement of life expired wooden bodied suburban stock with modern steel bodied units, including the 10 car train schemein the South East
  • The electrification of the whole of Kent, including new rolling stock, re-signalling, remodelling of stations and layouts
  • Successful long term cliff stabilisation in the Warren Halt area
  • An innovative diesel electric traction solution which enabled the modernisation of the main line London - Hastings line
  • Using diesel electric traction to modernise and rejuvenate secondary routes throughout the region including routes around Oxted and those in Hampshire

The point you are unable to grasp, is that the above list of achievements could not have been achieved without competent management that knew its railway and knew how to develop its market. This occurred because the professionals of the Southern Railway remained in place. Whether some unified transport strategy, dreamt up by the BTC succeeded or not is peripheral to this.

As to your somewhat deterministic view of history, yes, if the common carrier obligation had been got rid of at the time of Nationalisation, maybe we wouldn't have had the Stedeford committee. Maybe we would have. Perhaps Marples would still have decided that the network was costing too much and would have convened the committee anyway. Similarly, perhaps if the CCO had been removed at the time of the big four's square deal campaign, we might not have had nationalisation. Perhaps if an earlier (than Marples) conservative Government had removed it at the time of the modernisation plan British Railways might have been able to focus its resources more wisely. You cannot lay the entire responsibility for the CCO at the door of the Attlee Government.

The Stedeford Committee and Beeching were arguably as much a reaction against the perceived profligacy of the modernisation plan as they were to Attlee, yet as I've illustrated above, the lions share of the modernisation monies went on perfectly sensible and necessary investments that stood the railway in good stead and as for the Marshalling yards and unnecessary freight locos, if the CCO had been removed at the time of the modernisation plan, its funds wouldn't have been spent on those things anyway.

With regard to the Marshall aid money, yes, some should have been made available to the railway earlier on but since you don't believe the railways were properly managed in the first place, its hard to see how that would have made a difference according to your theory anyway. And lets face it, the Attlee Government wasn't the only one in the late twentieth century to be parsimonious with railway investment. Let us not forget that the Major Government launched its privatisation bill with the express aim of replacing public subsidy and investment.
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But by being able to more quickly adapt the railways operationally, organisationally and physically some of the secondary lines might have survived as there may not have been (a) such a dramatic loss of traffic as there actually was and (b) the costs of operation could have been reduced earlier and faster.

You might have a point with this, you might not. The railways might still have fallen out of favour in comparison with the car. It seems that these particular skills were lacking long before Attlee or nationalisation, so one can hardly lay the blame entirely at either.

By a similar token, secondary lines continued to close long after such developments as you've outlined above had become established, so maybe it wouldn't have made that much of a difference afterall.
 
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coppercapped

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To quote a previous post of yours:



You seem to be having difficulty making up your mind whether technical competence and development had a bearing on the success of the railway at during the period in question.

I'll help you out. It is absolutely about technical successes. Technical successes are important in their own right, but you don't get multiple technical successes without managerial competence.

Between 1947 and 1962, the Southern Region achieved:
  • The complete replacement of life expired wooden bodied suburban stock with modern steel bodied units, including the 10 car train schemein the South East
  • The electrification of the whole of Kent, including new rolling stock, re-signalling, remodelling of stations and layouts
  • Successful long term cliff stabilisation in the Warren Halt area
  • An innovative diesel electric traction solution which enabled the modernisation of the main line London - Hastings line
  • Using diesel electric traction to modernise and rejuvenate secondary routes throughout the region including routes around Oxted and those in Hampshire

The point you are unable to grasp, is that the above list of achievements could not have been achieved without competent management that knew its railway and knew how to develop its market. This occurred because the professionals of the Southern Railway remained in place. Whether some unified transport strategy, dreamt up by the BTC succeeded or not is peripheral to this.

As to your somewhat deterministic view of history, yes, if the common carrier obligation had been got rid of at the time of Nationalisation, maybe we wouldn't have had the Stedeford committee. Maybe we would have. Perhaps Marples would still have decided that the network was costing too much and would have convened the committee anyway. Similarly, perhaps if the CCO had been removed at the time of the big four's square deal campaign, we might not have had nationalisation. Perhaps if an earlier (than Marples) conservative Government had removed it at the time of the modernisation plan British Railways might have been able to focus its resources more wisely. You cannot lay the entire responsibility for the CCO at the door of the Attlee Government.

The Stedeford Committee and Beeching were arguably as much a reaction against the perceived profligacy of the modernisation plan as they were to Attlee, yet as I've illustrated above, the lions share of the modernisation monies went on perfectly sensible and necessary investments that stood the railway in good stead and as for the Marshalling yards and unnecessary freight locos, if the CCO had been removed at the time of the modernisation plan, its funds wouldn't have been spent on those things anyway.

With regard to the Marshall aid money, yes, some should have been made available to the railway earlier on but since you don't believe the railways were properly managed in the first place, its hard to see how that would have made a difference according to your theory anyway. And lets face it, the Attlee Government wasn't the only one in the late twentieth century to be parsimonious with railway investment. Let us not forget that the Major Government launched its privatisation bill with the express aim of replacing public subsidy and investment.
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You might have a point with this, you might not. The railways might still have fallen out of favour in comparison with the car. It seems that these particular skills were lacking long before Attlee or nationalisation, so one can hardly lay the blame entirely at either.

By a similar token, secondary lines continued to close long after such developments as you've outlined above had become established, so maybe it wouldn't have made that much of a difference afterall.

There is a big difference between the ‘Direction’ of an organisation and the ‘Management’ of it. The things you have described are tasks of ‘management’; I have been writing about ‘direction’. This is why I have been concentrating on the legal and economic framework within which the railways had to function in the years after the Second World War. ‘Management’ and ‘Direction’ are very different but they are complementary - competent management, such as you describe, cannot counteract the malign effects of incompetent direction and the best direction needs competent managers to implement the decisions effectively.

BR’s early ‘Directors’, the Railway Executive, did not understand that the world had changed dramatically from that of 1939. In this they were not alone, the 1947 Transport Act essentially simply changed the ownership of the railways but left everything else unchanged.

At the end of the War there were serious labour shortages, some 350,000 men had been killed - they were all fit and most of them were young. 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. Yet the RE continued to build motive power and operate train services using labour intensive technologies and methods.

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. And yet the RE continued to build steam engines.

The development and construction of the ‘Standard’ steam locomotives stands as an example of where the RE got it completely wrong - it was a total waste of engineering and development resources. This is the lost decade in technology to which I referred. At the time BR was created the LMS had built diesel shunters and prototype main line diesels and the Southern had designed some. The GWR had built a series of railcars in the 1930s and ordered some gas turbine main line locomotives. The Southern had electrified significant parts of its network by the time war broke out.

Then it all stopped. BR added diesel shunters to its build programme and picked up railcar development again in 1952. Diesel mainline locomotive development restarted in 1955 with the publication of the Modernisation Plan. By this time the second or third iteration of, for example, the Ivatt designs could have been putting out 2,000 bhp or more with much operational experience behind them.

Road vehicle reliability and capability had increased enormously - yet the basic unit of freight production remained the 10 ton van ambling from siding to siding.

The RE did not look at all these changes and ask itself how the railway should be adapted to compete. The biggest failing of ‘direction’ was that the traffic studies and analyses that Beeching had done in 1961 should have been done 14 or 15 years earlier. But they weren’t.

Passenger train service patterns should have be thoroughly examined. One route I knew a bit about, as relatives used to live near Islip, was the Oxford to Cambridge line. Until it was closed the train service was very similar to that operated towards the end of the 19th century - it being operated essentially as two branches which both coincidentally started from Bletchley. The service pattern, the train times and the speeds were no longer suitable - if they ever were. It is not surprising that once the family car offered an alternative the passengers stayed away.

Making the timetable suit the passenger wasn’t unknown on the railways, Herbert Walker had introduced with great success clockface timetables on the Southern Electric between the wars and the GWR was moving towards a standard pattern for departures from Paddington. It didn’t have to wait for diesel or electric traction, it could have been done with steam as the 1951 London - Norwich timetable showed. This latter was a 'management' initiative, not a result of 'direction'.

The same rigour should have been applied to freight services.

Only when all this had been done could the most suitable equipment have been bought. BR wasted millions in buying hundreds of underpowered Type 1 and Type 2 diesels and building marshalling yards because it still thought the pick-up freight train had a future. The AECs, Atkinsons, Bedfords, Commers, Dennises, Dodges, ERFs, Fodens, Guys, Leylands, Scammells, Seddons and Thornycrofts of 1946 showed that this was never going to be the case any more.

It doesn’t require perfect hindsight to see the effects that these lorries would have.

I am not in any way suggesting that the railways would not have suffered loss of traffic in some areas and routes - with the increase in the number and capabilities of cars and lorries on the road this was inevitable. However adopting, for example, the Brighton line model for inter-city services on the great routes from London to the North in 1948 would have had a positive effect on the way the railways were considered by the public and politicians. The service didn’t necessarily have to be fast, just increasing the frequency has a similar effect, but it would have set a sign. As the traction and track improved over the next years then the journey times could have been reduced.

But the lamentable failure in direction meant that action wasn’t taken. If it had been, and the money that was available more wisely spent, more might have been saved and the changes would have happened over a longer period. The system would have had longer to adapt to the new order - and might have helped shape the new order rather than always reacting to it. And the poisonous long-term effect on relationships with Governments, of all colours, and the Treasury that the waste of much of the Modernisation Plan monies caused would not have occurred.

One point about the Marshall Aid money. In Germany at least, being the country I know most about, the Marshall Aid money was used to set up the Kreditanstalt für Wiederaufbau, or Reconstruction Credit Agency. Organisations could borrow funds, but the funds had to be paid back. This concentrated the mind wonderfully. It was never the case that Marshall Aid money was simply given away as it was here, it was invested for long term benefit. The Kreditanstalt für Wiederaufbau still exists doing what it has always done.
 
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