What the UK can learn from the demise of British Rail

British Railways lives again. Well sort of. The Queen’s Speech is expected to contain plans for a Transport Bill, the centrepiece of which is the creation of Great British Railways which will take over many aspects of the nation’s rail system.

However, before the nostalgics start dusting off their Ian Allan Locospotters’ annual, this new beast will be nothing like the old one. British Railways was much more than just a railway. It owned a series of 29 superb hotels next to stations around the country including Turnberry and Gleneagles and their adjoining of golf courses; it organised holidays on stationary coaches in dozens of locations; and it ran ferries to the Continent and a Motorail service that let people to put their cars on the train between London and Scotland. In the days before motorways and domestic flights, BR was the heart of Britain’s transport system.

The new organisation will be far more limited in scope. It will take in Network Rail, which owns the track and other infrastructure, and it will be responsible for investing in the system and setting out future plans, but this is only a partial renationalisation. The trains will still be leased from rolling stock companies, and train operations will still be contracted out to private firms, though services will be branded as GBR.

Nevertheless, this does represent a reining in of the all-out privatisation undertaken by John Major’s government in 1992. That most acrimonious of privatisations was a response to British Rail’s perceived failings as a state-owned behemoth, a purveyor of stale sandwiches and dispenser of bizarre excuses for late-running trains such as ‘the wrong kind of snow’.

When I was working on a TV documentary about BR privatisation in 2008, Major responded to a request for an interview by writing a letter setting out his reasons for the sale of the railways. This was a rare public intervention on the rail sale from the former PM, whose 816-page autobiography barely mentioned this most controversial policy of his premiership. Denying that the sale had been motivated by ‘ideological reasons’, he wrote: ‘I thought British Rail was inefficient; had been inadequately funded for 50 years; was hidebound by tradition; and poorly managed.’

In fact, the picture was far more mixed. The early days of BR did, indeed, fit that description. When the railways were nationalised in 1948, the network was on its knees as a result of overuse in the war and underinvestment for a generation. To the delight of the trainspotters, but not passengers, there were still steam locomotives built in the 19th century clanking round the system. There were also branch lines to villages of a couple of hundred souls, few of which ever ventured on to a train. For the first decade or so the railways were starved of investment and, indeed, attention, as housing absorbed successive governments’ focus. Then suddenly, in the mid 1950s, they benefitted from a massive £1.2 billion (£30 billion today) modernisation plan to make up for the depredations of war and austerity. The idea behind it was to deliver the ultimate prize of a self-funding railway that would stand on its own two feet without government subsidy. As in every country in the world, barring the densely populated Japan, that aspiration has remained a pipe dream.

While some of the modernisation plan money was well spent on electrification and straightening out sections of track, much of it was wasted on huge marshalling yards that were barely ever used as lorries dominated the freight market, and on untried diesel locomotives that were so unreliable some were outlived by the steam engines they were supposed to replace.

Then came Beeching. The railways were ripe for a shake-up and much of the deadwood needed to be cut out. But since this was a period when people believed in the primacy of the car, it was inevitable that Beeching would go too far, chopping off potentially useful lines along with the no-hopers. While Beeching’s name endures as the bête noire of rail fans, he also introduced several positive innovations, such as the brilliant logo which Great British Railways is about to purloin.

BR made other mistakes. Having been initially tardy in introducing diesel trains, partly because coal was so readily available, after Beeching departed, BR managers went to the other extreme by phasing out steam locomotives far too rapidly, which meant their last steam engine, Evening Star, was decommissioned after only being in service for under a decade.

After a difficult period in the 1970s when fares could not keep up with rampant inflation and interfering ministers made life difficult for managers, an equilibrium was found that worked for both sides. Under the self-effacing but brilliant chairman Sir Robert Reid (oddly, his successor had the same name), the correct relationship between the organisation and the government emerged.

Reid had the ear of the transport secretary of the time (the brilliant but inconsistent Nicholas Ridley) and was friends with Denis Thatcher. He was given the freedom to recast BR’s passenger services into three standalone businesses – InterCity, Network SouthEast and Regional Railways. They were given the freedom to invest where they saw fit and to make other commercial decisions. It was so successful that InterCity became a nationally known brand operating profitable services, while even Network SouthEast’s commuter services were no longer a burden on the state.

Major’s assessment, therefore, had been out of date. BR had changed. Over the course of its existence, it went from employing around 650,000 people to just 150,000, shedding an average of 10,000 jobs in every year of its existence. But the perception that it was inefficient fatally undermined BR.

The lesson for Great British Railways is clear. While it is almost inevitable that a loss-making but vital industry like the railways ends up owned by government, the last thing it needs is ministers or civil servants to be involved in the running of its day-to-day business. If it is to emulate the best days of BR, it needs to be given a budget and then left to its own devices.

As for the sandwiches: they were never curly and stale, a joke created by the Two Ronnies. Indeed, BR pioneered the introduction of shrink-wrapped sandwiches after Prue Leith joined the board in 1977. And despite the headlines, no BR executive ever said ‘it was the wrong type of snow’.