by Charles Loft
Any chance of a radical programme of closures was already fading by the time the ministry learned in June of the Commission’s decision to reopen the Bluebell line. The doubts raised by the TUCC chairmen in March had encouraged a rethink at the BTC, by the time it received the ministry’s draft White Paper in May. The Commission began downplaying closures in favour of attempts to make savings of £20–25 million through replacing steam with diesel railcars. This change was certainly a response to the difficulties of the consultative procedure, which the calamity in Sussex emphasised. It was probably also encouraged by the success of the early diesel multiple unit schemes, particularly in the West Riding, in not only cutting costs but attracting new traffic. However, there had always been a range of opinion within the railways and although it was Sir Reginald Wilson, the Commission’s Financial Comptroller, who had established the Commission’s costings division, he was not entirely convinced by its output. Wilson suspected that the losses attributed to stopping services had been exaggerated in separating ‘the cost of the “wool” from the cost of the “mutton”’ (i.e. dividing shared costs between services), which required ‘abstractions based on all kinds of apportionments which in real life could not take place’.111
When the Commission submitted its draft contribution to the White Paper on 29 June, closures had been demoted to second place in the list of approaches to the railways’ problems and the emphasis placed on modernisation. The new draft argued that as branch lines already existed, as new technology promised great economies, and allowing for the importance of such services in feeding traffic to main lines, ‘on balance it seems probable that a considerable proportion of the rural railway services will be retained’, and ‘for a long time ahead … the fundamental pattern of routes will change only slowly’. There were no detailed proposals, just an eventual annual saving from closures of £3 million (in addition to the, still unspecified, savings from closures in the Modernisation Plan), to be achieved over six years ‘by which time the process will be more or less complete as far as the present pattern of things is concerned’.112 Watkinson fumed. There was nothing in the document to justify a six-month review, but he had to have a White Paper and, despite attempts to get the Commission to accept a redraft, he could not force the BTC to give him the one he wanted. He could not even delay it long enough to challenge the new approach. Any implication that he lacked faith in the Commission’s plan risked provoking Robertson into responding that the BTC’s finances were in a mess because it had done what the government had asked of it. A couple of weeks before the Bluebell reopened in early August, the minister recommended the Commission’s new plan to his colleagues. His argument echoed the hopelessness evident in Alexander Grant’s paper on the original Modernisation Plan the previous year:
unless the plan was put into effect, the government would be open to the damaging criticism that it had, by the 1953 Transport Act, destroyed the Commission’s prospects of solvency… The government could not avoid incurring very substantial expenditure on the railways for many years to come. It would be better that this should be applied constructively, rather than in financing a continuing deficit.113
The reality behind this statement was that the effect of the price freezes on the Commission’s revenue meant that Robertson would have to be given something like the financial reconstruction he had been lobbying for since 1955.
As Grant was on leave, the task of working out the details fell to Treasury principal Leo Pliatzky – in fairly chaotic circumstances, as he later recalled. Pliatzky had no contact with the Treasury minister on the Cabinet committee set up to oversee the review, Financial Secretary Henry Brooke, but
the minutes of one meeting said that at the next meeting the Financial Secretary would present his own proposals, which I found rather astonishing. I had no idea what his proposals were, but nor had he! It turned out … that I was supposed to produce his proposals for him… I was absolutely flabbergasted. So I came up with the proposal that the BTC … should have power to capitalise interest on their borrowing. I knew such an arrangement existed for it was provided for in the legislation for the North of Scotland Hydro-Electricity Board which is where I came across it… I had no experience of it … but I was in a spot.114
Pliatzky’s task and achievement was to draw up something which could be defended on the basis that it was ‘not a subsidy but corresponded on a massive scale to an ordinary commercial operation in which an undertaking with good prospects has to be specially financed during the period before new investments bear fruit’.115 The result was the Transport (Railway Finances) Act 1957. This placed the BTC’s accumulated deficit, the deficits it expected to make in the years to 1962 and interest payments on deficits and modernisation spending in a separate account which was not covered by the Commission’s obligation to break even. It was a licence to lose money, but not in perpetuity. Interest would gradually become payable after 1962, by which time the Commission – according to the figures in the White Paper – would be earning enough money to cover the payments. If, however, the Commission fell short of this target, a further reconstruction of its finances would become legally necessary. Politically, the legitimacy of the entire operation rested on the assumption that the Commission’s estimates of its results over the next five years were not just numbers that had been made up to fit a predetermined timetable at the request of the ministry.
How did this get past the Treasury? Officials had every intention of getting to grips with the Commission’s investment proposals in the wake of the Modernisation Plan’s publication, just as they had had every intention of studying the investment related to the 1955 Borrowing Powers Bill before its publication. And just as they had failed in the latter task, they had learned very little indeed about the 1955 plan before the 1956 version came along. The chief problem was one of organisation. In the mid-1950s, the Treasury was in the process of transition from a system under which the investment programmes committee controlled all investment in order to manage the allocation of scarce resources, to one in which controls over private investment were abandoned and the Treasury was concerned with the revenue-earning potential of nationalised industry investment. That was the theory, but Treasury officials had no experience in judging investment on this basis, let alone a fifteen-year programme of railway modernisation. ‘Who was I,’ Pliatzky asked several decades later, ‘to challenge the railways plans?’116 The most obvious manifestation of this inexperience was that the whole system revolved around a discussion between the Treasury, the ministry and the BTC lasting one-and-a-half hours once a year. The Treasury had no direct contacts with the Commission and relied on the ministry to act as a go-between, but its relationship with the ministry tended to come down to contacts between Grant and Ira Wild, the ministry’s director of finance. Contacts between Wild and the Commission, usually through the ministry’s ‘Trains and Drains’ (railways and inland waterways) division, were hampered by the BTC’s resistance to any attempt by Whitehall to interfere in its planning. When one considers that the Commission itself had a less than perfect knowledge or control of the railways’ regional organisations, the difficulty the Treasury faced is obvious. The inadequacies of this approach were plain enough; what to do about it was less obvious. If total investment appeared neither too large nor too small there was little the Treasury could do in individual cases, unless it felt that the board in question was not up to the job; as a result, it was very difficult to get sufficient information to judge whether the BTC was investing sensibly until one could show that it was not. Nevertheless, before going on leave that summer, Grant had advised that ministers refuse legislation or financial help pending an outside inquiry, a view echoed by his superiors but overruled by ministers’ need to justify the price freeze. Watkinson’s expectations are fairly clear from his comment to ministry officials that ‘the Commission would have to do as well or better than forecast in their plan or face the consequences. This would be the time for an outside inquiry.’117 Publishing th
e White Paper and passing the Railway Finances Act were not a recipe for disaster; they were a disaster that was in the oven on a timer.
This time there was to be no fanfare for modernisation, just a written answer in the House of Commons announcing publication of the White Paper, Proposals for the Railways; very much a defensive stroke, but enough to deflect criticism of the price freeze. In contrast, the Bluebell line was reopened on 7 August 1956. Press interest ranged from the Daily Telegraph to Meccano Magazine. Microphones and cameras recorded the event and cheering crowds greeted the first train at some of the reopened stations (and at Barcombe, which remained shut). A BBC radio reporter travelled with about 200 people on the first train, interviewing Miss Bessemer and the vicar of Barcombe, who was, inevitably, a leading opponent of closure. Reverend Webb criticised the service, which was inconveniently timed and did not serve Barcombe, the line’s busiest station. The Act only required four trains a day, did not require them to stop at Barcombe and did not say when they should run. The railways were determined to do no more than the law required and had no incentive to attract traffic which would only make it harder to close a line that had no chance of paying its way. Although the inconvenient timings were the result of running the service within the shift of a single crew, they can only have strengthened the general suspicion among opponents of closures that British Railways used timetable alterations to drive passengers away from lines it wished to close. The Commission was accused of sulking; Watkinson probably knew how it felt.
The Bluebell line closed for a second time in March 1958; nine coaches were required to accommodate all those who turned up to ride the final train. During its brief reopening ‘any unusual event on the line … even the excess blowing off of steam by engines, was being closely observed by a critical and interested public’, determined to show that the line could be run more economically.118 In the face of such opposition, the BTC was only able to persuade Parliament to repeal the obligation to run a service by agreeing to a public inquiry into the whole closure proposal. In effect this overturned the South Eastern TUCC’s endorsement of the original case for closure. The committee’s members, already furious at MPs’ criticism of their proceedings, went on strike when Watkinson overlooked them and asked the CTCC to hear the case instead. The new inquiry was held at the assize court in Lewes over three days in October. Advocates of a tribunal-style approach had got what they wanted. Detailed figures were available to all, and both sides had QCs, although this turned out to be a less confrontational affair than the Isle of Wight hearing. For reasons that are easy to imagine, Hopkins left it to his deputy to give evidence. The committee was impressed by witnesses who
had little or no experience in public speaking and must have found it an ordeal… The majority … were obviously moved by a deep sense of injustice – by the feeling that their convenience, or in some cases their livelihood, was being jeopardised by policy decisions made in London by a railway management of whose capacity and sympathy they had genuine doubts and by a sense too of duty and public spirit. We were left under no illusions about the depth of feeling which had been stirred by the decision to close the line, or about the very real measure of disturbance, inconvenience and sometimes even hardship which is caused in a rural community by such a decision.
Once again, the ‘interest’ portion of the Commission’s figures came in for criticism. The committee found it ‘unreal’ and ‘not a proper figure to put in support of a case for closing a branch line unless it is an appropriation from actual profits of the system as a whole’, concluding that ‘it would be far better from the point of view of the public good if Consultative Committees are asked to consider factual savings only’. The committee’s objection seems in part to have been that it just did not understand the figures. It was on firmer ground, however, in arguing that assets such as stations should not attract a charge because they would never need replacing and others – tunnels being the most obvious example – would continue to represent a financial burden long after closure. The committee also criticised the use of regional averages for fuel consumption and locomotive repairs and its recommendation led to improved figures being provided in future cases, despite the Commission’s reluctance. The BTC was warned that, in future, closure cases that relied on ‘interest’ savings were unlikely to be approved. If opponents of railway closures welcomed this rap across the Commission’s knuckles and felt they had kicked away a major prop of the case for closures, they must also have been aware that the committee had found that closure of the Bluebell line would save £33,000, that a full analysis of a diesel-operated interval service had undermined arguments that better, more efficient services could save such lines and that the committee had concluded that much of the objectors’ evidence ‘was based on a misunderstanding of the operational needs of a railway’.119
The BTC’s decision not to proceed with the closure programme it had planned in early 1956 and to seek savings through modernising rural lines instead, resulted in an order for twenty rail buses for use on lightly loaded lines and the introduction of an experimental service on the Buckingham–Banbury line in August 1956, a week after the Bluebell reopened. This produced impressive results. Operating costs were cut by over a quarter; an improved service and new unstaffed passenger halts increased custom and helped more than double receipts within two months. By 1958 they had more than quadrupled. But even then receipts were still only a third of operating costs and if passenger numbers had tripled to bridge the gap it is unlikely the railcar could have coped. By 1960 railcar operations had generally demonstrated that the Commission had been right in arguing against their use in 1954–5.
The annual receipts of the Lewes–East Grinstead passenger service withdrawn in 1955 (approximately £11,500) were not even half-way to covering the £25,000 or so needed just to staff and fuel the trains. These costs came down to around £6,500 if a diesel railcar operated the same service; but the service would need to generate almost a fourfold increase in receipts to cover its total costs while an improved hourly-interval diesel service would require earnings of almost five times those of the steam service. Nevertheless, if one ignored interest altogether, dismissed station expenses on the basis that the guard could issue tickets, assumed the Commission had overstated all the other costs and that an improved diesel service would quadruple receipts as it had at Banbury, it was just about possible to argue that the line didn’t lose very much and that the Commission had a duty to provide the service. In reality it was unlikely that the potential traffic existed in the area and if new equipment were provided it would be more difficult to argue that interest (depreciation) should be ignored. Just as it was entirely understandable that secret figures bred suspicion, so one can see why the Commission was so reluctant to provide figures and why, as the BTC’s losses mounted, the temptation grew stronger to step back from such detail and simply ask how the Commission could be losing money if it was not on lines like this. If the Isle of Wight case had left Hopkins regretting his decision to sit down with local opponents of closure, the Bluebell case had a similar effect on ministry officials. The objectors would have done well too, to heed the concluding paragraph of the CTCC’s report, which called for their future submissions to avoid ‘attacks upon the capacity and probity of the … Commission, who are only trying in the national interest to save expense’, and instead to ‘assist the committees to assess how far their convenience and livelihood will be affected by such closure or withdrawal’.120 If the outcome of the Bluebell case was to make more work for railway officers, it also foreshadowed the limits that would eventually be imposed on dissent, when the 1962 Transport Act restricted the committees to a consideration of ‘hardship’. By the summer of 1958, Tufton Beamish was trying ‘very hard indeed to stop a number of my constituents going on flogging the dead horse of the Bluebell line’ but Miss Bessemer refused to listen.121 She miscalculated a loss of only £3,000, using the figures supplied to the CTCC. The committee’s secretary, Chambers, tried to explai
n the figures to her, but concluded that she did not understand figures. When a Mr Bostel of the Lewes and East Grinstead Railway and Transport Facilities Committee sent him four letters in little more than a month on the point, he finally snapped. The line, he told Bostel, ‘is now closed and will not be re-opened. Neither, so far as I am concerned, will this correspondence.’ Miss Bessemer wrote to the minister to complain.122