by Charles Loft
Officials warned ministers that careful consideration would need to be given in these cases, for example by considering all proposals in a given area together. In March 1963 Marples was advised against taking the coordination of urban transport as the theme for a speech in Manchester because his officials had not yet worked out what advice to give him about either the policy or tactics on suburban closures included in Reshaping; and by the end of the year ministers were concerned over criticism that the Buchanan Report had thrown its policy on urban transport into disarray. Government sensitivity on the issue was reflected in Marples’s reluctance to overrule the London TUCC a second time by closing the Woodside–Sanderstead line in south London in December 1963, even though he felt the TUCC’s findings on hardship were insubstantial (the line is now part of the Croydon tram system). The concerns which had influenced the preparation of the report continued to affect decisions on urban closures and few had been dealt with by the time of the 1964 general election, although three closures in Bristol had been approved.
The widespread view that the social consequences of railway closures were being ignored is easy to understand, but wrong. As the previous chapter discussed, assessing the wider social and economic case for maintaining a service was the government’s problem, not Beeching’s. Combined with the limited remit of TUCCs under the 1962 Act and the absence of any provision for subsidising specific services on social grounds, this created the lasting impression that social need was being ignored. Yet, whether or not Beeching really believed that all the closures put forward in Reshaping would be approved, it was always anticipated in Whitehall that some lines would survive on social grounds and a number of public statements to this effect had been made prior to the publication of Reshaping. In September 1962, Macmillan set out the policy as he understood it in a letter to Marples:
If the government decides that on social grounds a railway from Inverness to Wick is necessary then … Dr Beeching will quote a price … for keeping the line open … the government will pay this, if it decides to do so, as a social service, but the management of the railway will not be accused of inefficiency or an increase in their deficit made a subject of attack on them on this account.196
The Prime Minister made this sound rather simpler than it proved to be but, as the principle was clear enough, why was nothing done to legislate for the payment of subsidies for specific rail services until 1968? The practical difficulties of legislating for and calculating individual subsidies, exacerbated by the BTC’s objections, were certainly a factor here. There were concerns, too, that the availability of subsidies would encourage demand for them in every case and make the closure programme harder to implement. Once a subsidy was paid, officials feared, there would be no prospect of ending it or incentive to reduce it through efficiency. Moreover, there was little incentive to legislate for subsidies reflecting the social value of specific services, given that the Treasury would obviously have to cover the railways’ general deficit for years to come.
The 1962 Act was not expected to be a final settlement of the railways’ finances. The SAG had revealed a horror story of inadequate depreciation provisions, unfunded pension liabilities, dire productivity (the railways earned less than £900 per year per employee) and miserable prospects. Of the railways’ supposed value (£1,600 million), it deemed £400 million irretrievably lost, recommended that another £400 million continue as interest-bearing debt and that £800 million be placed in a suspense account (and probably written off eventually). It is a mark of the severity of the railways’ problems that their total debt had risen by £450 million by the time the BRB was established. As a result it carried £900 million of interest-bearing debt when it was given the target of breaking even by the end of 1968. Stevenson had been eager to err on the side of caution in writing off railway debts chiefly because he was wary of encouraging other nationalised industries to seek similar relief, but he recognised that the railways had been set ‘a Herculean task’ and neither he, Macmillan nor the committee of officials from across Whitehall set up to examine Reshaping in the summer of 1963 expected the Board to get to 1969 without another review of its finances.197 The technical and political difficulties of subsidising individual services could wait until then.
The absence of specific subsidies from the 1962 Act did not mean that the social benefits of rail services were simply being ignored. In fact, behind the closed doors of the ministry, the wider implications of closures were considered. A division (‘Railways B’) was created in the ministry under an assistant secretary and two principals devoted entirely to handling closures. The assistant secretary chaired a working party that considered individual closures. This included representatives of various MoT divisions and other departments, such as the Board of Trade. It received TUCC reports on hardship, financial information on services and reports from the ministry’s divisional road engineers on what road improvements might be required if a line closed.† Once a case had been considered here, it passed to another committee chaired by the parliamentary secretary, which in turn advised the minister. This was certainly not the equivalent of a rigorous cost–benefit analysis – for the same reasons that Beeching’s report was not. Sir Christopher Foster has credited the cries for help emanating from the ministry from the late 1950s with a crucial role in stimulating interest in the application of cost–benefit analysis to transport, but there was little experience or expertise available for the ministry to recruit in what was very much still a developing science in the early 1960s. The retrospective study of the M1 conducted by Michael Beesley and others in 1960 was the first of its kind in Britain; Foster and Beesley’s 1963 study of a proposed new tube line in London (which became the Victoria Line) was the second; and in 1963 the ministry asked Foster to carry out a similar study of proposals to electrify the commuter lines out of King’s Cross.
By 1971, when British Rail asked Foster to carry out a cost–benefit study of two suburban lines in Manchester which had been listed for closure in the Beeching Report, the technique had only been applied to a handful of lines. Foster concluded that by reducing road congestion the services provided benefits to those not using them, which outweighed the financial loss incurred by their operation, and that the services should be retained and improved. It would be a mistake, however, to assume that this conclusion could be applied in blanket form to all rail services. In their 1975 work The Rail Problem, the economists Richard Pryke and John Dodgson reviewed the six cost–benefit analyses of individual lines carried out in the previous decade and updated them. Both the original studies and their recalculations indicated that the social benefits of rural services tended not to justify the cost of retaining them while those of urban services did. By extrapolating an average social benefit of approximately 2.2p/passenger mile (at 1971 prices), Pryke and Dodgson argued that eighty-nine services and 2,137 miles of passenger routes then open should be closed.198 This suggests that few lines closed before 1971 would have justified a subsidy on a cost–benefit basis, in particular because many of the urban closures proposed in the Beeching Report – those most likely to have been saved by cost–benefit analysis – did not proceed. Whether this judgement is correct or not, the absence of cost–benefit analysis from the consideration of closures within the ministry was a question of practicalities rather than a deliberate omission. In its absence it was left to civil servants to weigh up in each case the figures that the railways offered against the factors that made almost every case a special case – the holiday traffic, the hardship, the bad road, the particular likely investment or development put at risk, the undesirability of leaving a really large area devoid of any railway. This was the minefield Beeching had entered. Whether this process took sufficient account of social factors is discussed in more detail in the following two chapters, but it certainly did not ignore it.
The difficulty in establishing the exact costs of rail services and the saving that might be achieved by closing them has been a theme of this book and Beeching did no
t provide any comprehensive solution to the problem. Painting the big picture proved the easy part. Beeching’s studies showed that as a whole, general merchandise freight services’ operating costs were nearly double and stopping-train passenger services nearly three times their revenue. In July 1962 Beeching produced his two maps showing that half the rail network carried only 5 per cent of freight traffic and half the network carried 4 per cent of passenger traffic. The passenger and freight halves were not exactly the same, but there was sufficient correlation to mean that 92.5 per cent of all rail traffic travelled on half the network. A third of stations produced 1 per cent of passenger revenue. Translating this simple and effective demonstration of the problem – which was not news to railway managers – into a series of clear cases for individual closures remained a difficult and time-consuming task, which continued to produce disputable figures.
Originally, the BTC had hoped to be able to justify closures through a general demonstration that below a certain density of traffic a line could not break even. This was reflected in the text of Reshaping, which set the bar at 10,000 passengers a week (more if there was no freight traffic), a figure widely regarded as too high and too dependent on the assumption that track and signalling costs could not be reduced. The figures used in individual cases were generally worked up in the months following the report’s publication. The ministry was told that annual earnings figures for individual lines were calculated by multiplying the results of surveys carried out over one or two weeks, a process hardly beyond question. In fact a variety of methods was used, none without its failings, and often the work was slipshod (as we shall see in the following chapter). Both Richard Hardy and Gerard Fiennes, senior managers at the time, agree that these figures were in some cases vague calculations in support of a general principle that rural railways did not pay. The pressure under which the figures were compiled can be glimpsed in a letter from David McKenna, who had replaced Hopkins as the Southern Region’s chief officer, to his senior managers in April 1963:
Short cut methods must be adopted. There is no need at this stage to go into fine detail because the figures on which we assessed our portion of the plan are evidence in themselves of [its] necessity… I do not therefore want any request for more detailed financial information to hold up submissions to me. … If and when the Minister wishes to challenge us on financial background there will be adequate time to carry out further inquiries.199
Life might have been easier had freight and passenger closures been taken together, as the inclusion of the balance of track and signalling costs could have a dramatic effect on the financial case (for example in the Aberdeen to Fraserburgh and Peterhead case, an annual saving of nearly £60,000 from passenger closures would be increased by £150,000 if freight was withdrawn). However, discussion of the figures of individual cases rather misses the point. Reshaping was produced precisely to avoid such discussions, by having a plan.
There had been some uncertainty in Whitehall as how best to launch the closure programme Beeching would inevitably produce, but no one doubted its potential for trouble. Reforming the consultative process was one way of reducing the controversy; another was to revive the idea of having one big row over national or regional closure plans, a view influenced by ‘French experience, where the mere existence of an economic plan had a powerful psychological effect’.200 The Commission resisted this, even after Beeching became chairman, on the grounds that it would be quicker to publish proposals as soon as they were ready, but to no avail. In June 1962 Serpell had hoped that the overall presentation of the need to reshape the railway system could be provided in the BTC’s annual report for 1961, due to be published that month. This would be followed by a press conference at some point the following winter presaging regional plans soon afterwards. But, despite pressure from Beeching, the regions were not ready by October. Just as the positive aspects of Beeching’s plans had not been fully worked out when Reshaping was published, so the façade of logical analysis disguised the incomplete nature of the closure programme. Like the Modernisation Plan before it, Reshaping was a statement of intent, the practicalities of which had only partially been established.
The Beeching Report was in effect a snapshot, not only of the stage that Beeching’s work had reached, but also Whitehall’s, a picture created when the slow development of transport planning and railway costing was frozen in time by the need to act before the deficit got any worse. This is evident from the fact that a similar mileage was closed between Beeching’s appointment and Reshaping’s publication as was closed in the subsequent two years, and several lines which were listed for closure in the report had in fact already been closed by the time it appeared. Its list of closures was only the first of a three-part programme and can be seen as the conclusion of the work begun by the branch line committee in the early 1950s of cutting out the railways’ dead wood. The second stage involved identifying a core network of trunk routes, on which it was hoped investment would be concentrated in the following twenty years. The task of collating information and building predictions took until late 1964 and even then the routes chosen in the report published as The Development of the Major Railway Trunk Routes the following January were not a definitive selection. The report identified a core network of 3,000 miles of trunk routes and by August 1965 the final stage of the process, an investigation of the remaining lines outside the trunk network, had identified an 8,000-mile railway network, much of which would carry freight only. Although a network of roughly this size was implied by Reshaping, it is Trunk Routes which really deserves the title ‘Beeching Report’. Reshaping may have read convincingly as a technocratic argument, but Trunk Routes was much more obviously based on detailed studies and provided convincing justification for its selection of certain routes over others based on estimates of future traffic and the economics of carrying it.
Beeching’s approach was criticised on various fronts. His assumptions about bus costs – soon challenged in a long-forgotten piece in Modern Railways – his treatment of track and signalling costs, assumptions over the extent of contributory revenue that could be retained, were all debateable. However, while the overarching policy context may have been the Treasury’s desire to get public spending under greater control and reduce public investment, both Trunk Routes and Reshaping grew out of a genuine attempt to address the rail aspects of that problem by considering transport as a whole. The calculations supporting some individual closures may have been slapdash, but the determination to cut out lightly used parts of the network was based on knowledge that they were lightly used and ten years’ experience of the impossibility of achieving change quickly under the pre-1962 closure procedure. The extent to which Beeching focused on rail in isolation was dictated by the limits of what was possible if the deficit was to be addressed reasonably quickly. Similarly the judgement of social factors was hampered by a lack of expertise, although it is unclear how much difference this actually made. For all the experience and ability that qualified him to lead a nationalised industry, Beeching neither possessed nor had access to the expertise and knowledge necessary to put together the unanswerable analysis which Reshaping was presented as being; nor did he have the time. The need for an orchestrated demonstration of the inevitable logic behind the closure programme – indeed the need to publish a ‘plan’ – arose, at least in part, from the difficulty of presenting an unarguable case for his proposals. In retrospect, this most brutal of modernisations exposes just how in need of modernisation the British state was.
† The financial information covered the direct earnings (exclusive of contributory revenue) and direct expenses (movement costs – the cost of running trains themselves; terminal expenses – the cost of providing stations – and the track and signalling costs attributed to the service); a figure representing expenditure on maintenance and renewals over five years (at historic, not replacement, cost); and estimates of: gross contributory revenue; the revenue lost following closure; the net financial effect of passe
nger closure; and the additional saving if freight traffic was withdrawn.