Posted 1st September 2008 | No Comments

The ‘bad news’ report that helped build today’s railway

Sir David Serpell became a member of the BR Board in 1974, having retired as Permanent Secretary at the Department of Environment. The map shows how Railnews illustrated Serpell’s Option A in Fe

When the Serpell report was published 25 years ago it sent shockwaves throughout the railway industry.
In a worst possible scenario the report suggested that a network consisting of just 1,630 miles was the largest considered viable without subsidy.
The report was, of course, never acted upon and the controversial plan was shunted into an administrative siding to gather dust.
But in many ways the report acted as a watershed and triggered a huge programme of railway modernisation.
Sir David Serpell, the former civil servant who drew up the report, has now died, aged 96, and in this special report Alan Marshall digs into the files to relate a critical time in railway history.

IT may seem strange to younger readers – and at a time when there is growing concern about capacity – that 25 years ago rail managers were fighting off proposals that could have seen the network slashed to only 1,630 miles.

This was an option put forward by a committee of inquiry set up by Margaret Thatcher’s government and chaired by Sir David Serpell, a retired senior civil servant appointed to the British Railways Board.

Sir David, who died recently aged 96, was aggrieved by reaction to his report in 1983 because its concern with railway finances was “in accordance with our terms of reference”.

The committee said: “Reductions in the size of the network will be required if the level of financial support for the railway is to be lowered substantially.”

A network of only 1,630 miles was the largest Serpell’s committee considered viable without subsidy. Because it was labelled Option A, it became the one that many politicians and media focused on.

Worse still, one member of the committee – known to be close to Prime Minister Thatcher’s personal economics adviser – produced his own report, causing confusion and heightening anxieties about the rail system’s future.

Serpell’s committee followed years of debate between BR and the Government and after attitudes to the railways had hardened following Margaret Thatcher’s election and the appointment of Alan Walters, a champion of monetarism, as her economics adviser.

The early years of Thatcherism were marked by a serious economic recession that caused a big decline in BR’s finances.  The situation was made worse by a major steel strike and then by disputes in the rail industry itself – culminating in a two-week virtual shutdown in July 1982, when most Aslef drivers went on strike against ‘flexible rostering’. 

That dispute alone cost BR £150 million – equal to £400 million today.

BR was working under a directive to maintain the rail system at its 1974 size, but government funding was considered inadequate and BR warned that routes at the fringes of the network faced closure because there was insufficient cash to maintain them safely.

In one of his most memorable phrases, BR’s chairman Sir Peter Parker – referring to outstanding track renewals of 800 miles and 300 miles of speed restrictions – described the crisis as “the crumbling edge of quality.”

Meanwhile, the Government felt BR should achieve greater efficiencies, notwithstanding a study by Leeds University showing BR was the most cost-efficient railway in Europe after Sweden’s.

BR was also trying to revive the Channel Tunnel project and pressing for a substantial rolling programme of mainline electrification, based on a three-year joint review with the Department of Transport. 

But in 1982 BR could not even get government approval for just 27 miles of electrification on the East Coast main line from Hitchin to Huntingdon, let alone to Leeds or to Newcastle and Edinburgh.

Against this tense background, government and BR agreed there should be a thorough review. But how – and by whom?

BR wanted a joint review, similar to the electrification study. But the Conservatives were against BR involvement – not least because of hostility to Sir Peter Parker, who had stood as a Labour parliamentary candidate in the 1950s.

Many leaders of blue chip companies such as Unilever, ICI and Bass were reportedly approached, but all turned it down. 

Eventually, Sir Peter Parker proposed Sir David Serpell, a member of the BR Board since 1974, should lead the inquiry. Serpell had eminent credentials, having retired as Permanent Secretary at the Department of the Environment and, as a younger official, had claimed to have persuaded Dr Richard Beeching to become BR chairman 1961.

Serpell resigned from his BR position to head the committee but arguments continued about membership. The Peat Marwick Mitchell company had been appointed to audit BR’s budget, so senior partner Jim Butler was chosen. 

Other members then selected were Leslie Bond, a Rank Organisation director and former Trusthouse Forte managing director, and Alfred Goldstein, senior partner of consulting engineers R. Travers Morgan.

Goldstein’s appointment raised wider concerns about the government’s motives, as he was a close friend of Alan Walters and favoured converting railways into roads.

The Butler and Goldstein appointments also provoked heavy criticism because their consultancies were awarded work worth £627,000 (£1.7 million today) on behalf of Serpell’s committee. 

The previous BR chairman, Lord Richard Marsh, said appointment of Butler and Goldstein “was like inviting the Kray family to pass judgement on the twins”.

Serpell’s Committee started work in May 1982 and presented its report, together with the minority report from Alfred Goldstein, to transport secretary David Howell on 20 December.

But HM Stationery Office did not publish the printed version until 20 January 1983 and the intervening month was filled with media reports and leaks – for which BR was largely blamed.

Many of these focused on Option A and Goldstein’s breakaway report, in which he said the “greatest area of opportunity is in altering the level of services and the size of the railway network”.

But there was huge opposition to cut-backs in the rail network, both in lengthy debates in the Houses of Parliament and in a review by the Transport Select Committee.

When Margaret Thatcher called a general election in June 1983, Serpell’s report was shunted into a siding. And after the Conservatives were re-elected, David Howell was dropped from the Government.

Tom King was then made transport secretary, lasting just long enough to see Sir Peter Parker retire after seven years and two stints as BR chairman, and to appoint BR’s chief executive Sir Robert Reid as his successor.

Before the end of 1983 Nicholas Ridley, with whom Sir Robert Reid had a good working relationship, replaced Tom King.

By summer 1984, BR had gained government approval for East Coast electrification all the way to Edinburgh and the first of many approvals for new fleets of electric and diesel rolling stock, as well as Class 90 and 91 electric locomotives and Class 60 freight locomotives – a rolling stock renewal programme that was halted only in 1993 by the John Major government’s plans to privatise BR.

And, in 1986, BR set up an organisation to plan, with French and Belgian railways, services to operate through a new Channel Tunnel.

So the Serpell report  – and more importantly the reaction to it, much of it orchestrated by BR – became the turning point in the fortunes of the national rail network, which is now busier with passengers than it has been for 50 years.

-Smaller today by 1,000 miles
Although there was always strong opposition to reducing the rail network, since the Beeching cuts of the 1960s and ’70s it has actually shrunk over 1,000 miles since Serpell’s report. In 1981 total route mileage was 10,831, but this had shrunk to 9,826 by 2007/8. Almost half of the closures – 474 miles – have occurred since privatisation in 1996/7. The closures are almost entirely accounted for by freight-only routes.