Ownership of the railways before and during the first world war
Prior to the first world war, the railways had been built, maintained and run by over a hundred different companies. Locally, competition was fierce, and rival lines even built parallel infrastructure (such as the parallel tracks at Hastings, built by South Eastern Railway and the London, Brighton and South Coast Railway). During the first world war, the Government took control of the railways under the provisions of the Regulation of the Forces Act 1871. A railway executive committee, set up on behalf of the Government, ran the railways until 1921.
Following the war, the issues with having many companies own, build and maintain infrastructure were clear. These issues led to debates in the House of Commons about the future of the railways and whether nationalisation or re-privatisation was best.
Railways Act 1921
In 1920, Sir Eric Geddes, the UK’s first minister of state for transport, published a white paper entitled ‘Outline of Proposals as to the Future Organisation of Transport Undertakings in Great Britain and their Relation to the State’. It proposed reorganising the railways into a “limited number of groups”, suggesting around five or six for England and Wales and one for Scotland.
After some opposition about the structure of the board and workers, Sir Eric Geddes provided a memorandum to the cabinet on the forthcoming Railways Bill. It suggested just four regional groups for England and two for Scotland. After concerns were raised in Parliament about the separation of Scottish railways, the final act listed just four groups across England and Scotland.
The Railways Act 1921 received royal assent on 19 August 1921. It declared that:
With a view to the reorganisation and more efficient and economical working of the railway system of Great Britain, railways shall be formed into groups in accordance with the provisions of this act, and the principal railway companies in each group shall be amalgamated, and other companies absorbed in manner provided by this act.
The four groups listed in the act were:
- the Southern Group (Southern Railway);
- the Western Group (Great Western Railway);
- the North Western, Midland, and West Scottish Group (London, Midland, Scottish Railway); and
- the North Eastern, Eastern, and East Scottish Group (London and North Eastern Railway).
These groups later became known as the ‘big four’ when, after the act took effect in 1923, The Railway Magazine wrote about ‘The Big Four of the New Railway Era’.
The act eliminated competition, as each group now had a regional monopoly. It also established standard fares and charges for particular services.
Fast forward 100 years
Since the Railways Act 1921, the ownership and organisation of the railways has been revisited many times.
The second world war meant that the ‘big four’ came back under state control. In 1945, the Labour Party won the general election, promising public ownership of the railways, with the Transport Act 1947 nationalising the ‘big four’ private railway companies. The conservative government later established British Rail under the Transport Act 1962, just as the ‘Beeching cuts’ began to reshape the railways.
British Rail ran the railways for many years, owning the trains and infrastructure and carrying out maintenance, under the wider control of the Secretary of State for Transport. After being encouraged to create a greater commercial awareness and to privatise ‘non-core’ activities, British Rail was privatised under the Conservative Government in the 1990s.
The Railways Act 1993 provided the legal framework for the privatisation of British Rail and the introduction of a new structure for the rail industry. Under this act, passenger services were split into 25 separate units and sold to the private sector for set periods of time.
Ownership in 2021
Since 1993, whilst the Government has continued to be responsible for the strategy and funding of British railways, producers and specifiers of train services have changed, and some aspects of the railways have been taken back under public control after the collapse of some private companies.
In 2002, national rail infrastructure came back into public ownership after the privatised infrastructure company, Railtrack, went into administration. In 2018 the state took back control of the east coast mainline, launching London North Eastern Railway (LNER) to take over after operators Virgin and Stagecoach could no longer meet payments promised in their contracts. In 2020, Grant Shapps, Secretary of State for Transport, announced that the Northern Rail franchise would also be taken into public ownership following issues with postponed upgrades, worker strikes, and poor punctuality under the private ownership of Arriva. In September 2021, the rail operator Southeastern lost its franchise after franchise holder Govia failed to declare more than £25 million of taxpayer funding and became the latest railway line to come back into public ownership.
During the Covid-19 pandemic, emergency measures agreements with privately owned franchised train companies saw the Government temporarily accept revenue and costs of the railways, whilst paying pre-determined management fees to operators to continue to run day-to-day services.
The Williams-Shapps Plan for Rail, published on 20 May 2021, sets out ‘a new era’ in railway governance. In a press release, the Department for Transport said that a new public body, Great British Railways (GBR), would oversee the railways. It would own the infrastructure, collect fare revenue, run and plan the network, and set most fares and timetables. However, private companies would still be contracted to operate most trains.
- House of Commons Library, The Future of Rail, 29 September 2020
- Government Office for Science, The History of Transport Systems in the UK, 5 December 2018
- Department for Transport, Current Railway Models (Great Britain and overseas): An Evidence Paper, 19 March 2019
- A J Mullay, Grouping Britain’s Railways: Creating the ‘Big Four’ in 1923, 2018
Cover image: Photo of 60019 Bittern steam train by Grace Pocock, taken in Santon Downham, Suffolk.