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| Act of Parliament | |
 | |
| Long title | 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. |
|---|---|
| Citation | 11 & 12 Geo. 5. c. 55 |
| Introduced by | Eric Geddes |
| Territorial extent | Great Britain |
| Dates | |
| Royal assent | 19 August 1921 |
| Commencement | 19 August 1921[a] |
Status: Amended | |
| Text of statute as originally enacted | |
| Revised text of statute as amended | |
TheRailways Act 1921 (11 & 12 Geo. 5. c. 55),[1] also known as theGrouping Act, was anact of Parliament enacted by the British government. It 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".[2] The system of the "Big Four" lasted until the nationalisation of the railways in 1947.[3]
DuringWorld War I, the British government had taken control, although not ownership, of British railways.[3][4] The intention behind the Act 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 the war. The provisions of the act took effect from the start of 1923.[dubious –discuss]
TheBritish 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 theSouth Eastern Railway and theLondon, 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. Completenationalisation had been considered, and the Railways Act 1921 is sometimes seen as a precursor to that,[5] but the concept was rejected, and nationalisation was subsequently carried out after theSecond World War, under theTransport Act 1947.
The form of the act was developed by theMinister of Transport,Eric Geddes, who was a formerNorth Eastern Railway executive. Geddes favoured using amalgamations to create privately owned regional monopolies, and suggested increased worker participation from pre-war levels. He 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.[6][7]
Geddes' proposals became the 1920white 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.[8][9] The white paper was opposed by theRailway 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 theLabour Party.[6] Worker-directors were not included in the final act, being replaced by agreed negotiating mechanisms.[9]
In 1921, the white paper,Memorandum on Railways Bill (Cmd. 1292), suggested four English regional groups and two Scottish groups.[10] Scottish railway companies wanted to be incorporated into British groupings, and the RCA proposed five British regional monopolies including the Scottish businesses.[7]
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: theWest Coast Main Line and theMidland Main Line by the former group, and theEast Coast Main Line by the latter.[citation needed]
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 theRailway and Canal Commission, part 3 dealt with railway rates, charges and conditions of carriage with powers given to aRailway 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]
Thethird reading of the act in theHouse of Commons took place on 9 August 1921, and was passed with a majority of 237 to 62. TheHouse of Lords made various amendments, which were accepted by the Commons on 19 August, androyal 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 theMinistry of Transport Act 1919.[11]
The act took effect on 1 January 1923.[dubious –discuss] On that date most of the mergers took place, although some had taken place during the previous year. The February 1923 issue ofThe Railway Magazine dubbed the new companies as "The Big Four of the New Railway Era".
A number ofjoint railways remained outside the Big Four, continuing to be operated jointly by the successor companies. They included theMidland and Great Northern Joint Railway (M&GN), aLondon, Midland and Scottish Railway/London and North Eastern Railway joint line in eastern England, the largest of the joint railways in terms of route mileage; theCheshire Lines Committee (CLC), LMS/LNER joint line inLancashire andCheshire, largest in terms of both passenger and freight traffic;[12] and theSomerset and Dorset Joint Railway (S&DJR), a joint LMS/SR line in south-western England.
The London suburban railway companies, such as theUnderground Electric Railways Company of London and theMetropolitan Railway, were also excluded. Later, theLondon Passenger Transport Act 1933 amalgamated them, along with London area bus and tram operations, into theLondon Passenger Transport Board (seeList of transport undertakings transferred to the London Passenger Transport Board).[13]
Other exempted railways werelight railways authorised under theLight 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 ofColonel Stephens, who had been instrumental in securing the necessary exemption.[citation needed]