A quarter of a century on, the political party that abolished British Rail seems to be busy recreating it. Back in the 1990s the Conservative Party thought a state-run national railway organisation was anathema. In the words of John Major, BR was “inefficient… hidebound by tradition; and poorly managed.”
In fact, BR was very different from Major’s description. Of course, it was by no means perfect, and it had suffered from considerable under-investment during most of its 50-year existence, as Major himself later acknowledged. But to characterise BR in such a dismissive and facile way was wrong. Indeed we have much to learn from BR, both about how to run a good railway system and in the wider context of how publicly run organisations can in fact be innovative, efficiently managed and perform better than private alternatives.
British Railways, as it was initially called, had a difficult genesis. When it was created in 1948, the war had left it with a cruel double legacy: underinvestment and overuse. Moreover, the private companies that previously ran the system were rewarded generously for their shares, leaving the new BR with heavy debt repayments. The new organisation was also incorporated into the massive British Transport Commission, where it resided in a somewhat neglected state.
Having been starved of investment for a decade after the war, British Railways then suddenly found itself with a massive amount of available money—equivalent to £35bn today. But an ill-thought-out and hastily cobbled together modernisation plan meant the cash was spent on massive goods yards that were outdated by the time they were completed and poorly engineered diesel locomotives.
After its separation from the British Transport Commission in 1962, British Railways had Richard Beeching imposed on it as its first chairman. As is well known, this resulted in the closure of more than a third of the network and half the stations over the next decade. But it should be remembered that it was the politicians—first Tory, then Labour—who ultimately made the closure decisions. Moreover, Beeching was not all bad: he was an innovator who stressed the importance of BR’s core markets, InterCity services and freight, and he initiated a rebranding exercise that was to long outlive his tenure.
It was not until the arrival in 1976 of Peter Parker as chairman that BR began to establish itself as a coherent organisation with a clear remit. A great supporter of the railways, unlike some of his predecessors, Parker also understood the importance of winning over both the public and politicians to his cause. He managed to quell union protests while carrying out substantial changes, see off the hugely damaging Serpell Report—which could have led to massive cutbacks in route mileage, with the most extreme proposal suggesting there would be no railways west of Plymouth or north of Glasgow-Edinburgh, leaving all but 1,600 route miles open—and began the process of reform that would result in the creation of a highly successful business model. Parker’s key legacy when he left in 1983 was to ensure his successor was Bob Reid, who was the perfect man to implement the changes needed to transform BR.
It is from its final dozen or so years that useful lessons can be learnt from the history of British Rail. The organisation had long been hamstrung by its regional structure with the local general managers—“barons” as they were known—wielding considerable influence over the way the organisation was managed and, crucially, its investment strategy. Reid changed that by creating three passenger groupings—InterCity, Network SouthEast and Regional Railways—that were given sufficient independence to allow their managers to make key decisions over investment and timetabling. Most importantly, these sectors were fully integrated—in other words, their managers had control over all aspects of the railway from day-to-day operation to investment strategies.
Of the three, InterCity was BR’s poster child, a commercially successful service that was the subject of memorable advertising with slogans such as “Let the train take the strain,” and it became a much-admired organisation across the world. It was innovative, too, but unfortunately its pioneering “Advanced Passenger Train” was a failure due to insufficient investment in its development and an all too hasty introduction into service.
Remarkably, Network SouthEast, cobbled together in 1982 from the various commuter services into London, was a success story. Its inventive head Chris Green, one of a series of excellent managers produced by BR’s graduate training scheme, managed to create a brand that became remarkably popular. He also turned round the economics of the organisation by encouraging the use of the off-peak services that always had spare capacity through a series of cheap offers and the development of the Capitalcard, which could be used on both British Rail and Underground trains.
The third sector was Provincial, later Regional, Railways, which was the dumping ground for loss-making services but nevertheless represented a great improvement on what had been done before, thanks to the introduction of new rolling stock and better timetabling.
The sectorisation was then later improved in the final few years of BR’s existence with the concept of “Organising for Quality,” which put quality and customer focus at the forefront of the railways’ role and increased the independence of the sectors. It was just at the point when these changes were bedding down and showing evidence of success that the politically motivated and unnecessary break-up and privatisation was pushed through. It was noticeable that this was carried out and completed in Major’s government, a remarkable achievement given the complexity of the task and, ironically, a testimony to the skill and dedication of the railway’s managers.
Thus, far from being poorly managed and lacking in initiative, BR in its final decade or so was a highly successful, commercially driven organisation whose strengths should have been built upon, rather than dismissed in the rush to prove that it was the wrong type of organisation for the late 20th century.
Fast-forward a quarter of a century and now the failings of privatisation have been widely recognised, not least in the government’s own White Paper published in May 2021, Great British Railways, which was highly critical of the way the industry is structured. Far from stimulating competition, it stated, “The fragmentation of the network has made it more confusing for passengers, and more difficult and expensive to perform the essentially collaborative task of running trains on time.” Rather than reducing subsidy, “The model put in place at privatisation has not done enough to deliver a more cost-efficient sector,” and “Today’s system does not always encourage the different parts of the sector to work together.”
There is plenty more of this in the 116-page document which sets out plans for a new national organisation that would be the “guiding mind for the industry.” So far, however, details are scant of exactly how this new structure will work and at the beginning of June the government issued a further 75-page consultation paper seeking contributions on the concept of Great British Railways. This suggests, to put it kindly, that there is a lack of clarity among ministers about what precisely the new structure should look like. Railways have been barely mentioned in the Tory leadership contest, except for Liz Truss who has promised to reinstate plans for greater spending on railways in the north.
It is clear, though, that we are not about to re-create the old British Rail. Much of it has been sold off and broken up in such a way that it cannot be restored as the integrated national rail organisation it once was. In particular, operating the trains will still be contracted out to private companies. Nevertheless, there are lessons from the old BR: the railways work best when managers have a strong degree of independence and are free from the constant ministerial interference that is, oddly enough, a feature of the current “privatised” structure.
Moreover, railways are most efficient when their operations are controlled together with the infrastructure and maintenance, a model that has existed for most railways in most of the world ever since their creation in the 19th century. It is doubtful, though, that a party still intent on trying to prove, in the face of much evidence to the contrary, that only the private sector should be entrusted with the running of railways is in listening mode.