by Phil Marsh

World War Two brings rail nationalisation on September 1st 1939

Published: 1st September 2014

75 years later to the day, Network Rail is nationalised

The outbreak of World War Two (WW2) brought the UK rail network under Government control, as it did 25 years earlier when World War One broke out.

On September 1, 1939, 48 hours before the official outbreak of war, The Minister of Transport made an Order taking control of the undertakings of the ‘big four’ and the London Transport Passenger Board (Transport for London today) plus any ‘Joint Committee’ of two or more companies plus some smaller ancillary railways who had not been amalgamated in 1923.

The Minister appointed the Railways Executive Committee (REC) chaired by Sir Ralph Wedgwood with Sir James Milne, Mr C. Newton, Mr Frank Pick, Mr Gilbert Szlumper and Sir William Wood as his agents and authorised them to give directions under the Order.

On September 25, Mr Gilbert Szlumper was appointed Director-General of Transportation and Movements at The War office and was replaced by Mr. Eustace Missenden. The REC was based in a disused Piccadilly Line underground station at Down Street. This had already been specially protected for when war cane.

The railways had been on a war footing for some time as also on September 1, 1939, the LPTRB closed 19 tube stations and the Northern Line between Kensington and Strand for what was deemed to be protective works. London Bridge to Moorgate was closed on September 7 but all the closed stations were re-opened in stages by May 1940.

How were passengers affected?

Official statistics state that on September 1-3, 1,220,496 people were evacuated from major English towns and cities (607,635 in the London area) and in Scotland, 178,543 people were moved to places of safety away from the threat of bombing. Plans had been made to move three million people by the railways and Government.

Regular services such as the express registered transit parcels and goods services known as Green Arrow and Blue Arrow were suspended on September 3. Eight days later, a huge cut in passenger services was introduced and reduced rate fares were largely suspended as were seat reservations and restaurant car services while sleeping car trains were reduced.

Cash on Delivery services were suspended on September 14 but four days later, many passenger trains were reinstated while on October 9, 1939, cheap day tickets were again made available while on-train dining facilities were reintroduced on October 16.

Railway nationalisation repeats itself 100 and 75 years later…

Unlike 100 and 75 years ago, rail nationalisation was not brought about because of war. Network Rail (NR) was born from a highly flawed rail privatisation legislated by the John Major Conservative Government after the 1992 election.

It was rushed through creating Railtrack as the track and infrastructure authority from April 1994 which was floated on the Stock Exchange in 1996. Train companies were franchised just months before the May 1997 General Election which brought Labour to power.

The privatisation was decreed by European legislation which decreed that train operations should be separated from rail infrastructure maintenance and renewal and that a profit and loss account be made to make sure there were no subsidised train operations stifling competition.

Reverse railway policy

Labour had vowed to reverse rail privatisation but went along with the inherited system after having depressed the receipts gained from selling off the railways because of their political threats.

Then there were the awful tragic accidents at Ladbroke Grove, Southall and Hatfield when tens of people were killed on the railways. The latter accident was due to a broken rail and the rail network was paralysed afterwards for a year while rails were inspected, checked and replaced.

The Labour Government’s Transport Secretary Stephen byers eventually bankrupted Railtrack by refusing to fund them further, despite Regulatory efforts to avoid this. Network Rail was created to run Railtrack as a not for profit company and took over in 2003 after a year of working with four Joint-Administrators appointed to run the business.

So it is highly ironic that NR became a government department from September 1 and its associated estimated £41billion debt will be added to the national debt as a result. One could mischievously speculate that the extra revenue from the fares increase will go towards reducing the debt, but that would be wrong wouldn’t it? The Government and NR has signed a loan facility totalling £30.3billion – more will appear on this on shortly.

Government negotiates contracts with itself….

The company receives around £10million a day to support its operations or about £3.5billion a year and this will increase the UK’s debt profile further. This will create the interesting conundrum of the DfT and NR, both Government departments, negotiating with each other with Track Access Contracts and operational performance penalty payments.

This is even more bizarre when one considers that East Coast Trains, which is operated by Directly Operated Railways another Government Department, has to negotiate penalty payments when trains are delayed for whatever reason.

The Financial Times has reported that Ministers and officials are looking at changes to accountancy rules that would mean Network Rail’s £34bn debt, technically secured against assets, not being included on the UK’s public sector debt list. But, are the assets worth that amount which is expected to rise to £50 billion in the next five years as the massive investment gets underway and is delivered?

One way could be to create a Government Agency such as a Railway Agency on similar terms to the Highways Agency which means the Office of National Statistics would not include the rail debt in its figures.

At least it is a peaceful nationalisation and not a precursor to war.

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