Who Runs The Railways? The relationship between the government and the operators Malcolm Reed Introduction The development of railway regulation The relationship between the railways and govern- During the later 1830s and early 1840s government ment in Great Britain has been a policy issue and the and Parliament built up their competence in their subject of political and economic analysis almost dealings with railways. Their understanding of this from the outset of the railway’s emergence as a sig- new industry and its impacts was informed through nificant mode of transport. Political interest in this a succession of Select Committee inquiries, and once new form of transport was inescapable, because it was appreciated that the nature of steam railway railway schemes needed the sanction of Parliament technology gave the owner of the track an effective for the compulsory purchase powers that were monopoly control of the traffic which it carried, the required in virtually every instance to enable a line case for greater intervention in the affairs of this new to be constructed. In a legal and political culture industry could be justified on the grounds of which attached a high importance to the rights of protecting users against unreasonable charges and private property, interference with those rights was behaviour, and because of the economic effects of not lightly conceded. Consequently, the parliament- railways on other forms of transport and their users. ary Private Bill procedures obliged railway promoters Other reasons for intervention included public safety to make a public interest case for their proposals, and amenity, and the environmental impacts of steam and if necessary to defend their case against hostile traction. petitioners under Committee scrutiny. And because Initially, parliamentary process was used to in- a company’s enabling Act provided the statutory crease the extent of regulatory control over railways. basis for all of its activities, the authorisation By applying increasingly stringent Standing Orders processes gave Parliament the opportunity to shape to the consideration of railway Bills and by requiring the framework not only for the building of each the inclusion of standard clauses in such Bills, Parlia- railway but also for its subsequent operation. ment obliged their promoters to accept a number of In principle, this was no different from the way in specific conditions.2 These regulated matters as which canals, turnpikes, and other undertakings such diverse as the manner in which railway companies as gas supply companies had been established, and could raise finance, smoke emissions from loco- indeed early railway Bills borrowed from canal motives, and the manner in which railway lines could precedents. Since parliamentary authorisation itself cross public roads. created specific rights, railways could share in the These early methods of intervention were followed expectation of similar statutory undertakings that by general legislation which took two forms — the those rights would not subsequently be abrogated. Clauses Consolidation Acts of 1845 which brought However, it quickly became clear that railways differ- together a range of obligations which railway com- ed significantly both in scale and scope from other panies were obliged to accept as part of the authori- existing forms of inland transport, and this made sation process; and specific Acts which imposed new railway companies a unique focus of attention and requirements or controls on the industry. The first criticism. While the railway interest soon became of these was an 1838 Act which authorised the well-represented in Parliament, as the 19th century Postmaster General to order any railway to carry mail progressed the weight of the opposing constituency and to provide special trains or carriages for this pur- was sufficient to erode the railways’ own political pose if required. This was followed by the Regulation defences and leave them open to significant govern- of Railways Act, 1840, which gave the Board of 1 ment interference. Trade powers to inspect new lines before opening, to approve companies’ bye-laws, to regulate the 525 connection of private sidings to existing lines, and agenda which defined the continuing relationship to require railway companies to submit statistical between the railways and the state in Britain had been returns. A further Regulation Act in 1842 strength- established by the mid-1840s. The power of the legis- ened the Board of Trade’s powers, and also obliged lature to determine the conditions under which rail- railway companies to provide transport for troops way proposals would be authorised was self-evident; and police when required to do so. in addition, government had asserted its right to regu- The best known of the general railway legislation late the operations and charges of railway companies of the 1840s is Gladstone’s 1844 Regulation of Rail- and to require the provision of particular facilities in ways Act.3 This gave the government potentially the public interest. It had also articulated its ultimate sweeping deferred powers over railways authorised ability to take railways into public ownership. in that or subsequent sessions, enabling the Treasury While the option of state purchase was not exer- to revise such a company’s charges after 21 years if cised when it first became available in 1866, it was for the three preceding years its dividends had aver- taken seriously enough for the Royal Commission aged 10 per cent or more, and also empowering the on Railways which was appointed in 1865 to give Treasury, after the same lapse of time, to acquire consideration to this question when it reported in compulsorily any railway authorised in 1844 or later. 1867. Though the majority of the Commissioners In addition, the Act also required all passenger rail- were against state purchase — partly on the practical ways to provide at least one train in each direction grounds that the 2,320 miles of line authorised prior daily calling at every station and conveying third- to 1844 were excluded from this part of Gladstone’s class passengers in covered seated accommodation Act — a minority report by Sir Roland Hill argued at a fare of no more than a penny a mile and at an that the state should utilise its purchase powers. average speed of at least 12 miles per hour. Among Interestingly, both the majority report and Hill other provisions, the Act also amended earlier legis- assumed that if railway undertakings were acquired lation about the carriage of mail, troops and police, by the government, the actual operation of the and obliged railways, if required to do so, to permit resulting national system would not be retained in telegraph lines to be erected along their routes or to the public sector but leased out ‘in convenient groups’ make their own telegraph lines available for govern- to private companies:5 an early expression of the ment use. concept of railway franchising! Following the reconstitution of the small railway So far as the other provisions of the general department of the Board of Trade into a Railway legislation of the 1840s were concerned, most of the Board, there was a brave attempt in the parliamentary subsequent dialogue between government and the session of 1844–5 to intervene in the actual shaping railways was about the extension of the scope of regu- of the network. This was done by grouping Bills latory principles that had already been established. geographically and providing the Committees The only significant addition — the increasing in- considering them with the Railway Board’s view of volvement of the government in railway employment the merits of competing schemes. However, this matters — was reflected in legislation in 1893, the experiment foundered, partly because of the weight Railway Regulation Act. While partly a response to of parliamentary business generated by the Railway wider changes in the accepted range of state inter- Mania, but principally because of the lack of Cabinet vention, in the railway sector such intervention could commitment to supporting its own Railway Depart- also be justified in the interests of protecting the ment’s findings.4 At probably the last point in the public: the 1893 powers stemmed from concerns development of Britain’s railway systems where about the effects of excessive working hours on the sustained intervention might have been effective in performance of safety-critical staff such as signalmen influencing the subsequent network map, the dynamic and drivers. of economic trends and political events conspired The government’s right to requisition railway trans- against this attempt to nudge the promotion and port in time of war was strengthened by two further parliamentary authorisation processes away from an Acts, of 1871 and 1888. The former, the Regulation ostensibly laissez faire approach. of the Forces Act, gave the Secretary of State for Despite the failure of this attempt to strengthen War the power to take full possession of any railway government influence over railway schemes at the in the United Kingdom in a national emergency. authorisation stage, virtually all of the remaining Safety regulation was gradually made more prescrip- 526 tive, extending into areas such as brake and signalling The acceptance of regulated monopoly systems, while economic regulation was also pro- At one level, Parliament’s strong influence on the gressively strengthened. Gladstone’s initial foray into outcome of the railway amalgamation movement of the field of social passenger transport was modified the mid-nineteenth century reflected the relative in 1883 with the Cheap Trains Act, which replaced balance between the legislature and an executive the obligation to run one ‘parliamentary’ train daily which was only slowly developing the bureaucratic with a requirement for a ‘due and sufficient’ apparatus of modern government. It also appeared proportion of accommodation at fares not exceeding to imply a continuing belief in the efficacy of compet- a penny a mile.