An Act to provide for the reorganisation and further regulation of Railways and the discharge of liabilities arising in connection with the possession of Railways, and otherwise to amend the Law relating to Railways, and to extend the duration of the Rates Advisory Committee.
The Railways Act 1921 (11 & 12 Geo. 5. c. 55),[1] also known as the Grouping Act, was an act of Parliament enacted by the British government, and was intended to stem the losses being made by many of the country's 120 railway companies, by "grouping" them into four large companies, dubbed the "Big Four". The intention was to reduce inefficient internal competition between railway companies, and retain some of the benefits which the country had derived from a government-controlled railway system during and after the Great War of 1914–1918. The provisions of the act took effect from the start of 1923.
The British railway system had been built up by more than a hundred railway companies, large and small, and often, particularly locally, in competition with each other. The parallel railways of the East Midlands, and the rivalry between the South Eastern Railway and the London, Brighton and South Coast Railway at Hastings, were two examples of such local competition.
During the First World War the railways were under state control, which continued until 1921. Complete nationalisation had been considered, and the Railways Act 1921 is sometimes seen as a precursor to that,[2] but the concept was rejected, and nationalisation was subsequently carried out after the Second World War, under the Transport Act 1947.
The form of the act was developed by the Minister of Transport, Eric Geddes, who was a former North Eastern Railway executive. Geddes favoured using amalgamations to create privately owned regional monopolies, and suggested increased worker participation from pre-war levels. Geddes viewed the pre-war competition as wasteful, but was opposed to nationalisation, on the grounds that it led to poor management, as well as a mutually corrupting influence between railway and political interests. In his 9 March 1920 Cabinet paper, "Future Transport Policy", he proposed five English groups (Southern, Western, North Western, Eastern and North Eastern), a London passenger group, and separate single groupings for Scotland and Ireland.[3][4]
Geddes' proposals became the 1920 white paper, Outline of Proposals as to the Future Organisation of Transport Undertakings in Great Britain and their Relation to the State (Cmd. 787). That suggested the formation of six or seven regional companies, and suggested worker participation on the board of directors of the company.[5][6] The white paper was opposed by the Railway Companies' Association (RCA) and by MPs representing railway companies' interests. The move to greater worker participation was strongly opposed by the RCA, but supported by the Labour Party.[3] Worker-directors were not included in the final act, being replaced by agreed negotiating mechanisms.[6]
In 1921, the white paper, Memorandum on Railways Bill (Cmd. 1292), suggested four English regional groups and two Scottish groups.[7] Scottish railway companies wanted to be incorporated into British groupings, and the RCA proposed five British regional monopolies including the Scottish businesses.[4]
After consideration of the Railways Bill, it was decided that the Scottish companies, originally destined to be a separate group, would be included with the Midland/North Western and Eastern groups respectively, in order that the three main Anglo-Scottish trunk routes should each be owned by one company for their full length: the West Coast Main Line and the Midland Main Line by the former group, and the East Coast Main Line by the latter.[citation needed]
The act
The opening paragraph of the Railways Act 1921 states:
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.
Part 1 of the act dealt with the terms and procedure of the amalgamations of railway companies. The constituents and subsidiaries of the four groups were set out in the first schedule of the act. Companies that had not formed an amalgamation scheme by 1923 would be amalgamated under terms decided by a tribunal.[1]
Part 2 dealt with powers and regulation of the railway companies by the Railway and Canal Commission, part 3 dealt with railway rates, charges and conditions of carriage with powers given to a Railway Rates Tribunal, and part 4 with employee wages and conditions.[1]
Parts 5 and 6 dealt with light railways and general clauses respectively, with the general clauses of part 6 including the requirement of the railway companies to provide the Minister of Transport with statistic and financial reports.[1]
The third reading of the act in the House of Commons took place on 9 August 1921, and was passed with a majority of 237 to 62. The House of Lords made various amendments, which were accepted by the Commons on 19 August, and royal assent was given. The state control of the railways which began under war conditions during World War I was to continue for a further two years under the Ministry of Transport Act 1919.[8]
The act took effect on 1 January 1923. On that date most of the mergers took place, although some had taken place during the previous year. The February 1923 issue of The Railway Magazine dubbed the new companies as "The Big Four of the New Railway Era".
Other exempted railways were light railways authorised under the Light Railways Act 1896, and similar lines, although some of those lines still chose to join the groups. The lines which remained independent were principally those under the influence of Colonel Stephens, who had been instrumental in securing the necessary exemption.[citation needed]
↑ Wolmar, Christian (2007). Fire and Steam: A New History of the Railways in Britain. London: Atlantic. pp.231–232.
1 2 Grieves, Keith (1989), Sir Eric Geddes: Business and Government in War and Peace, Manchester University Press, pp.88–90, ISBN0719023459
1 2 Lodge, Martin (2002), On Different Tracks: Designing Railway Regulation in Britain and Germany, Greenwood Publishing Group, pp.40-42, also Note 40. p.50, ISBN0-275-97601-7
↑ E McGaughey, 'Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’ (2018) 47(1) Industrial Law Journal 76
1 2 Brodie, Douglas (2003), A History of British Labour Law, 1867-1945, Hart Publishing, pp.177–180, ISBN1-84113-015-X
↑ "August: The Railways Act, 1921", The Engineer, 132: 231, 2 September 1921
↑ Dyckhoff, Nigel (1999). Portrait of the Cheshire Lines Committee. Ian Allan Limited. p.7. ISBN0-7110-2521-5.
↑ aniels, P.W.; Warnes, A.M., Movement in Cities, Routledge, pp.233–5
Related Research Articles
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The London, Midland and Scottish Railway (LMS) was a British railway company. It was formed on 1 January 1923 under the Railways Act 1921, which required the grouping of over 120 separate railways into four. The companies merged into the LMS included the London and North Western Railway, the Midland Railway, the Lancashire and Yorkshire Railway, several Scottish railway companies, and numerous other, smaller ventures.
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The London and North Eastern Railway (LNER) was the second largest of the "Big Four" railway companies created by the Railways Act 1921 in Britain. It operated from 1 January 1923 until nationalisation on 1 January 1948. At that time, it was divided into the new British Railways' Eastern Region, North Eastern Region, and partially the Scottish Region.
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The history of rail transport in Great Britain 1830–1922 covers the period between the opening of the Liverpool and Manchester Railway (L&MR), and the Grouping, the amalgamation of almost all of Britain's many railway companies into the Big Four by the Railways Act 1921.
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The "Big Four" was a name used to describe the four largest railway companies in the United Kingdom in the period 1923–1947. The name was coined by The Railway Magazine in its issue of February 1923: "The Big Four of the New Railway Era".
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References
Brodie, Douglas (2003), A History of British Labour Law, 1867-1945, Hart Publishing, ISBN1-84113-015-X
E McGaughey, 'Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’ (2018) 47(1) Industrial Law Journal 76
External links
Institute of Railway Studies and Transport History (University of York) (February 2003), "The Railways Act and the Grouping, 1920-1923", IRS&TH: Railway Readings, www.york.ac.uk, retrospective on Railway Gazette articles relating to the grouping
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