British Railways: 1948 – Part 2

We all know that nationalisation of the UK’s railways took place on 1st January 1948.

It is interesting to ask when the idea was first promoted. There were, after all, two periods of effective nationalisation prior to 1948. Both of the two world wars saw UK railways under government control. ……….

So, was the idea of nationalisation first thought of in the preparations for the major conflict which was looming in the early part of the 20th century?

When conflict was declared on 4th August 1914, the Railway Executive Committee, which had been formed in 1912 as an intermediary between Government and the 120 private railway companies, moved swiftly to take control of the network. Within 24 hours of the start of the conflict, the Committee used the powers of the Regulation of the Forces Act 1871 to secure its ascendancy. Direct, day-to-day operations were still the remit of the railway companies but, as Jones explains in ‘The Nation’s Railway‘, “the remuneration for the owners was fixed by the government, which could secure whatever priorities it required for different classes of traffic, a facility with economic as well military significance.” [1: p12] Clearly, this mechanism was already in the mind of the Committee before the start of the conflict.

We know that David Lloyd George was sympathetic to trade union calls for nationalisation of the railway network. He was prime minister from 1916 to 1922. [1: p16] His plan was opposed by Andrew Bonar Law who was the then leader of the Conservative party and followed Lloyd George as prime minister. Bonar Law favoured a grouping of companies into regional monopolies. This was enshrined in the Railways Act 1921 and postponed any thoughts of nationalisation.

Speaking of this time in the development of the railways, Wikipedia tells us that, “during the First World War the railway network was taken under government control and run by the Railway Executive Committee of the Government. This revealed some advantages in running the railways with fewer companies, and after the war it was widely agreed that the required development of the rail network could not be achieved under the conditions that had existed before the war. The nationalisation of the railways, which had been mooted by William Ewart Gladstone as early as the 1830s, was considered, but was rejected by the government and the owners of the rail companies. A compromise was created in the Railways Act 1921. Under this act, almost all of the hundreds of existing rail companies were grouped together into four new companies.” [2]

Back to my question … Was it in the period from 1912 to 1921 that nationalisation was first considered? Or was it earlier?

It appears that the matter was seriously considered much earlier than this. In the midst of the railway mania of the 1840s, it was, surprisingly, the Conservative government of Robert Peel that first proposed nationalisation as a solution to specific problems in the railway industry. The Railway Regulation Act, 1844  was designed to “force the railways to reduce charges in the interests of the whole body of capitalist manufacturers and traders, by holding over their heads the threat of nationalisation.” [1: p8]

W.E. Gladstone

The Act was promoted by W.E. Gladstone, then a Conservative Minister and President of the Board of Trade. He “threatened British railway companies with a state takeover of they did not cut fares for poorer sections of society.” [1: p7]

His threat was the secondary purpose of the 1844 Act. It “enshrined in law the requirement to provide affordable ticket prices for the poorer sections of society, to enable them to travel to find work. … Gladstone’s Act … stipulated that one train with provision for carrying third class passengers, should run on every line, every day, in each direction, stopping at every station, with a fare of no more than a penny a mile and up to 56lb of luggage per passenger carried free of charge. The average speed should be not less than 12mph, and third class passengers should be protected from the weather and be provided with seats.” [1: p8]

Ian McLean asserted, in a paper about the history of regulation in the UK, that “Gladstone’s bill of 1844 was ‘a personal rather than a departmental measure’ and he persevered with it despite the ‘indifference to hostility’ of the rest of the Cabinet … He argued that the need for regulation arose ‘owing to the great and almost unparalleled extent of capital unemployed’ in Britain. Early railways had seemed to be dubious investments. By 1844 they had proved themselves technically and economically and were earning large dividends. Therefore there was a sudden rush to promote new schemes, and the Private Bill Office had more railway bills in hand than ever before. Gladstone did not think that the entry of new railway companies would bring the railway business into competitive equilibrium. Rather, if Parliament were to allow competing routes between the same towns, ‘it would afford facilities to exaction … an increase of the evil, … a mere multiplication of monopoly’ (Hansard 3rd series vol. 72, cols 232-6).” [3]

So, Gladstone proposed, among other things, a power to cap the rates of new railways after a period of years, to a level such that their dividends would be held at 10% of the value of their issued capital, and a power to nationalise any such lines after the same period of time.

The Act’s provision for nationalisation was not invoked. However, it remained as a possibility which the government could use if circumstances were right, or if railway companies failed to deliver on promises made in the future.

It seems as though the events of 1947 and 1948 were part of a long political saga. As we know, those events were in no way the end of the story!

References

  1. Robin Jones; The Nation’s Railway: Birth, Beeching and Beyond; Morton’s Media Group, Horncastle, Lincolnshire, 2017. 
  2. https://en.m.wikipedia.org/wiki/History_of_rail_transport_in_Great_Britain_1923%E2%80%931947, accessed on 23rd January 2020.
  3. Iain McLean; The origin and strange history of regulation in the UK: three case studies in search of a theory; Paper for ESF/SCSS Exploratory Workshop: The Politics of Regulation, Barcelona, November 2002; https://www.nuffield.ox.ac.uk/politics/papers/2002/w29/The%20origin%20and%20strange%20history%20of%20regulation%20in%20the%20UK.pdf, accessed on 23rd January 2020.

2 thoughts on “British Railways: 1948 – Part 2

    1. rogerfarnworth Post author

      Yes David, interesting in the light of the Labour Party Manifesto at the recent election and surprising that it was a Conservative government that first proposed nationalisation!

      Reply

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