Rail policy in Britain — What next?

Abstract

The 1974 Railways Act set British Rail (BR) the rather vague objective of providing a passenger service broadly comparable with that then existing within a given level of support. For the first few years under the Act, BR succeeded in operating within the financial constraints imposed, but only by considerable increases in charges and by negotiating wage settlements which implied declining real wages. From 1978 on, rising labour costs and reduction in traffic led to a rapidly developing crisis in BR's financial position.

The position of each section of BR's business is discussed briefly. It is shown that the designation of some sectors as being purely commercial is inappropriate, since this means that benefits to users and to the community at large are ignored in decision-making. Similarly, the direction to maintain “social” passenger services at a given level means that finance and investment are concentrated unduly on preservation of the existing pattern of service, rather than on providing value for money. In both sectors, the likelihood is that in general fares are too high and services too frequent.

At an operational level, the criterion of maximising the (weighted) volume of traffic carried is advocated as a practical way of choosing between alternative fare and service-level packages. More broadly based strategic studies would be needed to decide on the weights to be adopted, the level of finance to be made available, and the overall strategy.