What if...
Labour’s election manifesto proposal for renationalisation of the railways has sparked plenty of debate on the pros and cons of public ownership. DAVID CLOUGH studies the actions of the Big Four following the 1923 Grouping, to consider how events may have
...nationalisation never happened? How might events have unfolded, if the railway‘s Big Four companies remained in place beyond 1948?
Largely unfettered railway building during the 19th century created an unfortunate legacy for the following hundred years, because of the extent of route duplication and lines in rural areas that were unviable. The building spree had involved raising huge sums of capital, with investors expecting a return higher than that offered by Government securities.
Railway viability had been appreciated as a national issue before the First World War. When Eric Geddes, a Conservative MP and the first Minister of Transport, published his Bill in 1920 for the grouping of the railways, he said the only alternative to his proposals was nationalisation.
The problem was that a significant number of railways were struggling financially, and crosssubsidy by way of merger with profitable ones was seen as essential. Geddes’ plan to have Scotland as a unified entity was abandoned when it was realised that overall it would be loss-making.
The upshot was the 1923 Grouping that created four railways out of 120. The Great Western (GWR), London Midland & Scottish (LMSR), London & North Eastern (LNER) and Southern (SR) were the largest corporate entities of the period, and thus the lifeblood of the country economically and financially.
The Grouping can be regarded as a political ‘fix’ that failed to address two key issues. The rail network had significant over-capacity, while the Big Four’s capital bases needed restructuring to reflect the fact that some of their lines were habitual loss-makers, and would have closed if not integrated into a bigger railway.
It is important to draw attention to two key matters that dated from the early days. Firstly, the companies had a statutory duty to carry ‘all traffic offering’. This would not have been an issue, but there was statutory control of maximumcarriage rates Road competition and rate capping meant that by the end of the 1930s Big Four fincial performance was in decline. Profits totalled £ 29 million for a capital base of £1 billion, which did not represent a great return on investment. However, disproving the oft-told fallacy that the railways were broke after the Second World War, in 1946 the combined profits had grown to £41.7m, an increase of 44% from 1939!
Would the Labour Government elected in 1945 have relieved the statutory obligations? It seems unlikely, but the Conservative administration of the 1950s quite probably would have addressed the rate cap issue.
The railways only had permission to engage in road cartage as part of rail-linked collection and delivery services, but could apply to conduct separate road haulage businesses - and some pre-Grouping companies had done so. Growing competition from independent road hauliers from the 1930s might have led to the
Big Four pursuing this approach in some areas.
Would the Big Four have tackled route duplication? Probably not, based on the failure of BR’s Regions to do so until boundary changes took effect in the late 1950s and early 1960s. As late as the start of the latter decade, freight managers of the London Midland and Western Regions competed against each other in the Birmingham area.
The Big Four would have faced the same issues as BR during the 1950s and 1960s. After the War, demand for steel outstripped supply and this would have limited renewal programmes for locomotives and track, just as it did for BR.
This was also a period of full employment and railway wages had traditionally been low, so attracting recruits to clean steam locomotive fireboxes and shovel tons of coal would have been just as problematic. Would the Big Four have competed between themselves for footplate staff, in the same way that postprivatisation rail companies have done?
In the 1950s, the councils for Edinburgh and London petitioned BR to deal with pollution from steam traction. BR responded by implementing a diesel multiple unit (DMU) scheme for Edinburgh and allocating Pilot Scheme diesels to London, but one wonders whether the privately owned railways would have been so socially minded without political pressure.
A downturn in coal and steel production in the late 1950s was a significant factor in BR making heavy losses, and these changed circumstances would have hit the Big Four just as hard. These traffics kept the railways viable, and subsidised other loss-making freight and most passenger activity.
The Big Four had a range of non-rail activities, such as ports and harbours. Might there have been a diversification into bus operation for rural areas?
Would modernisation have come at a faster pace, and followed the same course as happened on BR? Until the 1955 Modernisation Plan, the Government failed to allocate adequate funds to the railways for capital renewal. The Big Four would only have been constrained by their ability to fund projects from within existing resources or by raising additional capital.
Turning to motive power, it is possible to glean an idea of how matters might have evolved from plans in train by 1948. Oil burning for steam locomotives had been a post-War GWR initiative and the programme seems to have worked well, even if the choice of burner was not the best available. Swindon would have continued its excellent research on increasing the steaming capacity of its fleet, and (taken together with oil-burning) may have postponed any move towards the squadron adoption of diesel or electric power.
Pre-War, the GWR had produced a report examining electrification of the main line in South Devon. It had ordered gas turbine locomotive 18000, which was more powerful than its largest express passenger type, but it would have reached the same conclusions as BR on the poor economy of this form of propulsion for rail. Equally, it is almost certain that there would have been the same interest in diesel-hydraulic traction, as was the case with the WR.
In 1933 the GWR introduced its first diesel railcar, and its success led to 37 similar vehicles being added. These were used for the promotion of services for which there was a limited demand, such as branch lines and certain cross-country lines. The expectation must have been that there would be fleet expansion in substitution for steam.
By 1948 the LMSR was moving firmly towards diesel traction. The prototypes 10000 and 10001 were regarded as a single traction unit with a power output matching its most powerful steam classes. A prototype of 827hp was also on order, intended as a small mixed-traffic unit, while discussions were progressing for the construction of a unique diesel-mechanical main line machine that became 10100, the Fell locomotive.
As early as 1931, the LMSR President had flagged the need for more economical ways of working. The following year the Railway obtained its first diesel shunter, and by 1936 a version built by English Electric emerged and became the forerunner of BR’s Class 08. The principle of single manning was also established.
What might be considered the forerunner of the DMU ran trials on the LMSR in 1928, and the company commissioned several DMUs during the 1930s. The foregoing indicates a progressive attitude, moving away from steam in all aspects of traction.
The LNER was the only company to initiate an overhead line electrification scheme. It was for the Woodhead route, using the 1,500V DC system, and equipment was ordered before the War. Schemes for suburban electrification had been produced concurrently, while there were plans to electrify the southern end of the East Coast Main Line.
The Weir Committee had recommended in 1932 that 1,500V DC be adopted as the national standard for overhead line electrification. As part of the 1955 Modernisation Plan, BR revisited this in the light of progress in France towards the use of 25kV AC, and came down in favour of the latter. Whether such a switch would have been made as early as this without nationalisation is uncertain.
Expansion of the SR’s third-rail network to include routes through Kent seems highly likely. Pre-War, the company designed three third-rail electric locomotives for use on freights in the Central Division, and enlargement of the fleet would have been logical.
The SR also built two classes of large (nominally) mixed-traffic steam types, and these would have served the South Western Division until being ousted by either route electrification or main line diesel traction. Prototypes of the latter were on order by 1948, and eventually became 10201-3 in BR days. The ‘Leader’ Class of experimental steam engine would have been multiplied, and a true assessment on the type’s potential determined.
The foregoing shows that the Big Four were progressing towards modernisation at a faster rate than BR did, and these steps would have improved efficiency. Even so, survival would have required hard decisions - just as happened in the US, where lines closed and almost all passenger operations were either brought under one Government-directed corporation and subsidised, or ceased to operate.
The foregoing shows that the Big Four were progressing towards modernisation at a faster rate than BR did.