27 March 2023

Sixty years after Beeching’s report, the future of our railways has rarely looked less clear


Exactly 60 years ago today, Dr Richard Beeching published his Reshaping British Railways report. Beeching, a non-railway middle-ranking executive plucked from the chemicals company ICI, is remembered for proposing the closure of 5,000 miles of railway lines and a third of the country’s stations. Most of his recommendations were carried out within the next few years.

Unlike many figures of the period, Beeching has never been forgotten. His name lives on in infamy amongst trainspotters and, indeed, much of the general public, many of whom have a sentimental thing for railways in the abstract, even where the reality is often far less attractive.

Conspiracists see Beeching as a shill for the road lobby – not least as the man who appointed him, Transport Minister Ernest Marples, was part-owner of a motorway construction company, a dodgy geezer who later hightailed it to Monaco to avoid prosecution for fraud. Marples clearly knew when he appointed Beeching what he expected the broad outlines of the report to be.

Critics point out that the evidence base for Beeching’s drastic surgery was flawed, that the outcome was never in doubt, and that big mistakes were made. Many rural areas and small towns were cut off from the rail network and have suffered ever since, with poor links with the rest of the country and an environmentally damaging reliance on cars and lorries.

However, looking at the state of Britain’s railways in the early 1960s, any objective observer would surely have admitted that something drastic was needed. The network was massively overstaffed, largely reliant on dirty and inefficient – albeit no doubt quaint and romantic – steam haulage, and with little understanding of costs and revenue. The still extant Victorian network involved considerable duplication of routes, and maintained many lines which had never turned a profit at any time in their existence.

Fifteen years after nationalisation, British Railways’ organisation remained on the regional basis of the former company groupings, dating back to the 1920s. Each region had its own locomotives, rolling stock and signalling arrangements and operated largely independently, with bosses competing against each other for investment. Nationalisation had entrenched union power and a mindset to which profitability was alien. There was massive cross-subsidy, coupled with growing overall losses, as people took to cars in increasing numbers and as goods market share was lost to road haulage, previously under the control of the British Transport Commission, but now firmly in the private sector. The industry seemed to face inexorable decline, with little possibility even of stemming financial losses without radical change.

Yes, some of Beeching’s closures may have been mistaken, and a fair number have even had to be reversed in recent years. But a general pruning of the network was probably correct and necessary. On the positive side, Beeching injected a new sense of commercialism into the railways, cutting out old ways of doing things and focusing on what the railways could do best.

This included fast intercity services, containerisation, and concentration on dedicated coal and mineral traffic. The future was not in slow stopping passenger trains and pick-up goods trains (which involved labour-intensive shunting and goods yards, which took up a great deal of often expensive land). British Rail, the new name, became much more marketing-conscious as Beeching sought to reposition it.

He certainly shook up the railways and his innovations were to lead eventually to reorganisation on sectoral lines to create discrete businesses, with the breakdown of the old regional fiefdoms. This in turn paved the way for privatisation.

Fast-forward to 2023. The railways are again in serious trouble. Privatisation in the 1990s led to an unprecedented boom in passenger travel, with numbers reaching levels never seen before. However even before Covid-19 hit, the increase had tailed off. The franchise system was proving ever more problematic, with several well-publicised failures. Track improvements, including electrification, were slow and involved big cost overruns. Consumers continue to complain of high prices, over-crowding and delays. Blame for delays was disputed between publicly-owned Network Rail and the private Train Operating Companies, with 400 people employed simply to sort out compensation arrangements.

In the 1960s a Conservative government had baulked at annual losses of more than £80m, perhaps £2bn in today’s money. But even before the pandemic the taxpayer was paying out well over £6bn a year in operating subsidies and a similar amount in capital expenditure.

Continuing subsidies were rationalised in terms of the environmental and community benefits of railways. These had come to be lumped together, following Labour minister Barbara Castle’s stewardship of the Transport portfolio in the mid-1960s, as the ‘social railway’. The idea was that the maintenance of loss-making operations, and planned new investment, were justified by social cost-benefit analysis (CBA), part of the government economist’s toolbox from around the same time.

The use of CBA represented some progress in government investment decision-making, but important assumptions such as the discount rate and the valuation of time are judgment calls which can be fudged to reflect politicians’ fantasies, as we have repeatedly seen with HS2, for example.

The pandemic has been a watershed. In a couple of years the rail market changed dramatically. Previously reliable earnings streams – captive suburban commuters and pay-through-the nose long-distance business travel – have dried up with working from home and Zoom meetings. Meanwhile the old franchises all had to be scrapped and that business model now seems to have gone the way of the dodo.

Then, of course, we have seen almost a year of intermittent strikes by the three major rail unions in pursuit of inflation-busting pay with no productivity strings attached, against ever-growing losses. Together with driver shortages and infrastructure delays, services have been more and more unreliable and are turning many people permanently against rail travel.

The Government’s response has been dilatory. The 2021 Shapps-Williams report seemed to suggest a way forward to a new Great British Railways with a ‘single guiding mind’ – perhaps a 21stcentury Beeching – but it was vague about what this would mean in practice and, two Transport Secretaries later, we are no further forward. It is now being suggested that there will be no legislation this side of a general election. And if that election is won by Labour, we can apparently expect a return to the 1948 show, with complete renationalisation.

As we approach the third century of railways in Britain, it’s all looking pretty grim. Rail has a future, but in many ways we are less clear on what this should be than we were 60 years ago.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Professor Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.