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Short haul

Wednesday 15th October 2008

I’m guessing not many people (who read this) saw Ian Hislop’s programme about Beeching last week, or know about him from other sources (unless I’m not the only one to spend much too long reading about this sort of thing on Wikipedia…). So I’ll summarise.

In the first part of the 20th Century (up to about the 1920s), the railways in Britain were pretty damn good. The network was well used and had a pretty good coverage. However, as they started to face competition from other forms of transport such as cars, lorries, buses and planes, the rail companies found it increasingly hard to make a profit (except for in WW2, where the network was suddenly utilised again for the war effort).

In addition to the competition, the railway system in Britain grew up in the Victorian era in a pretty unmanaged way. As now, everything was privately owned, but unlike now there was much more competition, to the point of certain routes being duplicated and run by two different companies. There were a lot of railways in the country  – at the peak just before WW1, about 22,000 miles. Obviously, this is hellishly inefficient, and really needless after the railways were nationalised in 1947.

Anyway, eventually, things came to a head and the Government decided to bring in someone from a corporate environment, to try to help turn the system around. They chose Dr Richard Beeching, at the time head of ICI, to be head of the new British Railways Board. In 1963, he released a report entitled “The Reshaping of British Railways”. The report was basically an analysis of which lines were used the least (using data from a survey which took place over just one week), followed by his recommendation that if these lines were closed, the rail network would begin to show a profit again.

In the following years, 9000 miles of track (and 4000 stations) were removed. Unsurprisingly, this was fairly unpopular.

Beeching thought that the network should run as a business; i.e. should pay for itself. He neglected the idea that – especially at that time, when it was nationalised – it was a service. If you trim it down until you have a core business that returns a profit, then yes it might make sense financially, but it negates the point of a railway! Also, the report didn’t consider any alternatives to closure. There were plenty of ways that costs could have been cut without severely impacting upon the service offered, yet they were simply not looked at. Additionally, when tracks and stations were closed there was no consideration given to the future expansion of the network. In America when a line is closed, theres a practise called “Railbanking”, where the railroad right-of-way is preserved should the route become viable again in the future. This prevents the land being built on, and if that had taken place it would’ve made life hell of a lot simpler for Network Rail (or whoever) now, when they look at expanding the network.

Another brilliant thing about The Beeching Report is that it assumed that people would get the bus or drive to a station to use the train. But people are inherently lazy, so the assumption was only half right. They used their cars, but just drove where they wanted to go instead of to the station. The same sort of thing happened with freight I think, which again is hardly unpredictable.  The effect of all this is that now the main lines had fewer passengers/freight moving on them, which from a financial standpoint it probably made things worse in some areas! Certainly,  most loss-making routes made such a marginal loss that the overall net effect of the reforms was two-tenths of not a lot; the railways continued to lose money.

The point I’m trying to make – apart from lamenting the railways – is that when increased profit is the only goal, it seems incredibly easy to be incredibly short-sighted. The rail companies were in the early part of the 20th Century when they failed to adequately invest in the network and rolling stock to stay competitive, the Government and Beeching were in the 60s when they decided to close things willy-nilly, and plenty of people are still making the same mistakes. I’m pleased that one of the conditions of the RBS bailout by the Government is that in future any bonuses given to directors will be made in the form of shares (and I assume they have to hold onto them for a while). Hopefully that’ll tie their fortunes to that of the Bank, forcing them to take a longer-term approach. It’s beautifully simple; let’s just hope it’s effective.

Posted at 12:09 am | Posted In: Rant Tagged:

5 Comments:

Lucy

Wednesday 15th October 2008, 3:07 pm

Lucy

Wednesday 15th October 2008, 3:07 pm

Ah, damn, spam filters…

Lucy

Wednesday 15th October 2008, 3:28 pm

I have just spent about twenty minutes getting very enthusiastically pissed off about the railways (in the same way that I do about TWM)…

But what you are saying applies in huge numbers of contexts – and the really stupid thing is that a lot of them don’t even involve making profit. So many apparently intelligent people just can’t see past the HERE and NOW.

Dickie

Wednesday 15th October 2008, 5:02 pm

You know Network Rail is nationalised in all but name, right? Admittedly the carriers are still private, but still…

The problem isn’t just limited to private organisations either. The example I used of Beeching occured when the whole network was nationalised; it was the Government’s choice to close the lines. Admittedly, the problem seems to occur more in private companies (indeed, it arose in the example because of Beeching’s commercial viewpoint), but nationalisation does bring its own problems.

Andy Simpson

Wednesday 3rd December 2008, 2:45 pm

Hello the past, the future greets you!

I’m ashamed it’s actually taken me this long to read this, because I agree totally. It’s the kind of thing I’ve tried to tell people a lot of times – that the persuit of profit is inherently short-sighted and often leads to a sub-optimal solution.

The fault here isn’t just the persuit of profit; the man was clearly also an idiot. Using just one week to survey the usage of the railway network is a clear hole in his methodology. I’d say you’d have to look at the thing for a whole year to get a proper picture, if not longer. Just seems the system he was working in aided and abetted him being a moron.

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