Transport Act 1962
Encyclopedia
The Transport Act 1962 is an Act
of the Parliament of the United Kingdom
. Described as the "most momentous piece of legislation in the field of railway law to have been enacted since the Railway and Canal Traffic Act 1854
", it was passed by Harold Macmillan
's Conservative
government to dissolve the British Transport Commission
(BTC), which had been established by Clement Attlee
's Labour
government in 1947 to oversee railways, canals and road freight transport. The Act established the British Railways Board
, which took over the BTC's railway responsibilities from 1 January 1963 until the passing of the Railways Act 1993
.
The Act put in place measures which were to enable the closure of around 1/3 of British railways the following year as a result of the Beeching report
, as the Act simplified the process of closing railways removing the need for pros and cons of each case to be heard in detail.
ways had accumulated a deficit of some £500 million and the annual rate of deficit was estimated to be in the region of £100 million. The Transport Act 1962 sought primarily to remedy this situation by putting public transport operators on the same footing as privately-run companies, thereby reversing the policy which had been in place since the earliest days of transport law, namely that the carrier was a monopolist
to be controlled and regulated by the State for the benefit of the public.
, i.e. the taxpayer. Furthermore, the Board of British Railways was now directed, under Section 22, to run the railways so that its operating profits were "not less than sufficient" for meeting the running costs.
This last obligation to make the railways self-sufficient is a novel departure in UK railway legislation and marks an important turning point. From now onwards, each railway service should pay for itself or at least have the prospect of doing so. The days of subsidisation of the railways was now clearly over. The change of policy was brought about by the Select Committee of the House of Commons on Nationalised Industries which concluded that the British Transport Commission should make its decisions exclusively on considerations of "direct profitability". Where decisions based "on grounds of the national economy or of social needs" needed to be taken, the Minister of Transport
would be responsible, having sought the approval of Parliament
.
In future, the railways would now be operated on the principles applicable to any other private entrepreneur in a competitive marketplace. In that respect, Section 3(1) provides that it is the duty of the British Railways Board to provide railway services "in Great Britain" (not 'for') with regard to "efficiency, economy and safety of operation".
The four Boards inherited the property, liabilities and functions of the BTC, but importantly their activities were to be co-ordinated by the Minister of Transport, rather than a body separate from the government. The Boards needed the consent of the Minister to borrow and would need his approval for projects involving large sums of money (Sections 19 and 27).
and was intended as a consumer body to represent users of the railway. In addition, Area Transport Users Consultative Committees were established to cover individual areas of the country.
The role of the Committees was to make recommendations relating to the services provided by the four Boards, although their remit did not include the charges and fares set by the Boards. The Minister was not bound to follow any recommendations.
Rail users affected by a closure could also send their objections to the Area Committee (this was not required to be specified in the Closure Notice) who would then report to the Minister of Transport. The Area Committee would consider the "hardship" which it considered would be caused as a result of the closure, and recommend measures to ease that hardship. The closure would not then be proceeded with until the Committee had reported to the Minister and he had given his consent to the closure. Based on the report, the Minister could subject his consent to closure to certain conditions, such as the provision of alternative transport services.
transporting persons and goods for the public benefit, but were now simple bailees
transporting goods and people like any other private operator.
The main effect of this change was that the Boards were no longer "absolutely liable" for their operations, i.e. bearing responsibility for loss even in the absence of negligence or fault on their part. Now they could restrict their liabilities in a similar fashion to private operateurs.
Another consequence of their new status was that from now on could they not only reject passenger and goods consignments and limit the exposure of their liability, but also were free to "demand, take and recover such charges for their services and facilities, and to make the use of those services and facilities subject to such terms and conditions as they think fit" (Section 43), i.e. benefit from total freedom of contract
to sell their services, rather than operate via the medium of a statutory process. An exception was made for the London Passenger Transport Area where fares were still fixed by the Transport Tribunal.
In effect, as one commentator noted, "the Act goes much further in giving effect to laissez-faire
in the law of transport than English law has ever done at any time since the seventeenth century".
recognised the principle that a defendant in criminal proceedings, in this case the defendant was fined £10 for smoking on a train in violation of a railway byelaw, could challenge the validity of the rule before a court, save where Parliament has indicated that such a challenge is not possible.
].
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
. Described as the "most momentous piece of legislation in the field of railway law to have been enacted since the Railway and Canal Traffic Act 1854
Railway and Canal Traffic Act 1854
The Railway and Canal Traffic Act 1854, also known as Cardwell's Act, was an Act of the United Kingdom Parliament regulating the operation of railways. It designated the railway companies as common carriers transporting goods and persons for the public benefit...
", it was passed by Harold Macmillan
Harold Macmillan
Maurice Harold Macmillan, 1st Earl of Stockton, OM, PC was Conservative Prime Minister of the United Kingdom from 10 January 1957 to 18 October 1963....
's Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
government to dissolve the British Transport Commission
British Transport Commission
The British Transport Commission was created by Clement Attlee's post-war Labour government as a part of its nationalisation programme, to oversee railways, canals and road freight transport in Great Britain...
(BTC), which had been established by Clement Attlee
Clement Attlee
Clement Richard Attlee, 1st Earl Attlee, KG, OM, CH, PC, FRS was a British Labour politician who served as the Prime Minister of the United Kingdom from 1945 to 1951, and as the Leader of the Labour Party from 1935 to 1955...
's Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
government in 1947 to oversee railways, canals and road freight transport. The Act established the British Railways Board
British Railways Board
The British Railways Board was a nationalised industry in the United Kingdom that existed from 1962 to 2001. From its foundation until 1997, it was responsible for most railway services in Great Britain, trading under the brand names British Railways and, from 1965, British Rail...
, which took over the BTC's railway responsibilities from 1 January 1963 until the passing of the Railways Act 1993
Railways Act 1993
The Railways Act 1993 was introduced by John Major's Conservative government and passed on 5 November 1993. It provided for the restructuring of the British Railways Board , the public corporation that owned and operated the national railway system...
.
The Act put in place measures which were to enable the closure of around 1/3 of British railways the following year as a result of the Beeching report
Beeching Axe
The Beeching Axe or the Beeching Cuts are informal names for the British Government's attempt in the 1960s to reduce the cost of running British Railways, the nationalised railway system in the United Kingdom. The name is that of the main author of The Reshaping of British Railways, Dr Richard...
, as the Act simplified the process of closing railways removing the need for pros and cons of each case to be heard in detail.
Historical context
By the end of 1960, British RailBritish Rail
British Railways , which from 1965 traded as British Rail, was the operator of most of the rail transport in Great Britain between 1948 and 1997. It was formed from the nationalisation of the "Big Four" British railway companies and lasted until the gradual privatisation of British Rail, in stages...
ways had accumulated a deficit of some £500 million and the annual rate of deficit was estimated to be in the region of £100 million. The Transport Act 1962 sought primarily to remedy this situation by putting public transport operators on the same footing as privately-run companies, thereby reversing the policy which had been in place since the earliest days of transport law, namely that the carrier was a monopolist
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
to be controlled and regulated by the State for the benefit of the public.
New financial management obligations
By virtue of Sections 36 and 38 of the Act, some of the debts of the British Transport Commission, including the funds invested in the failed 1955 Modernisation Plan, were either written off or transferred to the TreasuryHM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
, i.e. the taxpayer. Furthermore, the Board of British Railways was now directed, under Section 22, to run the railways so that its operating profits were "not less than sufficient" for meeting the running costs.
This last obligation to make the railways self-sufficient is a novel departure in UK railway legislation and marks an important turning point. From now onwards, each railway service should pay for itself or at least have the prospect of doing so. The days of subsidisation of the railways was now clearly over. The change of policy was brought about by the Select Committee of the House of Commons on Nationalised Industries which concluded that the British Transport Commission should make its decisions exclusively on considerations of "direct profitability". Where decisions based "on grounds of the national economy or of social needs" needed to be taken, the Minister of Transport
Secretary of State for Transport
The Secretary of State for Transport is the member of the cabinet responsible for the British Department for Transport. The role has had a high turnover as new appointments are blamed for the failures of decades of their predecessors...
would be responsible, having sought the approval of Parliament
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
.
In future, the railways would now be operated on the principles applicable to any other private entrepreneur in a competitive marketplace. In that respect, Section 3(1) provides that it is the duty of the British Railways Board to provide railway services "in Great Britain" (not 'for') with regard to "efficiency, economy and safety of operation".
Break-up of the British Transport Commission
To facilitate the new policy, the British Transport Commission was replaced by five new public corporations:- the British Railways BoardBritish Railways BoardThe British Railways Board was a nationalised industry in the United Kingdom that existed from 1962 to 2001. From its foundation until 1997, it was responsible for most railway services in Great Britain, trading under the brand names British Railways and, from 1965, British Rail...
- the London Transport BoardLondon Transport BoardThe London Transport Board was the organisation responsible for public transport in London, UK, and its environs from 1963-1969. In common with all London transport authorities from 1933 to 2000, the public name and operational brand of the organisation was London Transport.-History:The...
- the British Transport Docks BoardAssociated British Ports HoldingsAssociated British Ports Holdings Ltd owns and operates 21 ports in the United Kingdom, managing around 25 per cent of the UK's sea-borne trade...
- the British Waterways BoardBritish WaterwaysBritish Waterways is a statutory corporation wholly owned by the government of the United Kingdom, serving as the navigation authority in England, Scotland and Wales for the vast majority of the canals as well as a number of rivers and docks...
- the Transport Holding CompanyTransport Holding CompanyThe Transport Holding Company was a British Government owned company created by the Transport Act 1962 to administer a range of state-owned transport, travel and engineering companies that were previously managed by the British Transport Commission ; it came into existence on 1 January...
(holding the shares of companies belonging to BTC, including Thomas Cook and Son LtdThomas Cook AGThis article contains historical information about Thomas Cook AG until its merger with My Travel - for the new company see - Thomas Cook Group...
)
The four Boards inherited the property, liabilities and functions of the BTC, but importantly their activities were to be co-ordinated by the Minister of Transport, rather than a body separate from the government. The Boards needed the consent of the Minister to borrow and would need his approval for projects involving large sums of money (Sections 19 and 27).
Nationalised Transport Advisory Council
Section 55 of the Act created a new body, the Nationalised Transport Advisory Council, which was set up to "advise" the Minister of Transport on the activities of the five corporations resulting from BTC's break-up. The corporations would all be represented on the Council.Transport consultative committees
The Central Transport Consultative Committee took the place of a similar body that had been created under the Transport Act 1947Transport Act 1947
The Transport Act 1947 is an Act of the Parliament of the United Kingdom. Under it the railways, long-distance road haulage and various other types of transport were acquired by the state and handed over to a new British Transport Commission for operation...
and was intended as a consumer body to represent users of the railway. In addition, Area Transport Users Consultative Committees were established to cover individual areas of the country.
The role of the Committees was to make recommendations relating to the services provided by the four Boards, although their remit did not include the charges and fares set by the Boards. The Minister was not bound to follow any recommendations.
Procedure for closure of railway lines
A new procedure was set out for the closure of railway lines, Section 56(7) requiring that British Railways gave at least six weeks notice of their intention to close a line and to publish this proposal in two successive weeks in two local newspapers in the area affected. The notice would give the proposed closure dates, details of alternative transport services (including services which BR was to lay on as a result of closure) and inviting objections within the six week period to a specified address. A copy of the notice was also to be sent to the relevant Area Committee.Rail users affected by a closure could also send their objections to the Area Committee (this was not required to be specified in the Closure Notice) who would then report to the Minister of Transport. The Area Committee would consider the "hardship" which it considered would be caused as a result of the closure, and recommend measures to ease that hardship. The closure would not then be proceeded with until the Committee had reported to the Minister and he had given his consent to the closure. Based on the report, the Minister could subject his consent to closure to certain conditions, such as the provision of alternative transport services.
Reform of the law of transport
The four Boards created after the break-up of the BTC were also placed in the position of private companies in respect of their commercial activities. They no longer had the status of common carrierCommon carrier
A common carrier in common-law countries is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport...
transporting persons and goods for the public benefit, but were now simple bailees
Bailment
Bailment describes a legal relationship in common law where physical possession of personal property, or chattel, is transferred from one person to another person who subsequently has possession of the property...
transporting goods and people like any other private operator.
The main effect of this change was that the Boards were no longer "absolutely liable" for their operations, i.e. bearing responsibility for loss even in the absence of negligence or fault on their part. Now they could restrict their liabilities in a similar fashion to private operateurs.
Another consequence of their new status was that from now on could they not only reject passenger and goods consignments and limit the exposure of their liability, but also were free to "demand, take and recover such charges for their services and facilities, and to make the use of those services and facilities subject to such terms and conditions as they think fit" (Section 43), i.e. benefit from total freedom of contract
Freedom of contract
Freedom of contract is the freedom of individuals and corporations to form contracts without government restrictions. This is opposed to government restrictions such as minimum wage, competition law, or price fixing...
to sell their services, rather than operate via the medium of a statutory process. An exception was made for the London Passenger Transport Area where fares were still fixed by the Transport Tribunal.
In effect, as one commentator noted, "the Act goes much further in giving effect to laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
in the law of transport than English law has ever done at any time since the seventeenth century".
Railway byelaws
Section 67 of the Act enables byelaws regulating the use of the railways to be issued. This provision featured in the important case of Boddington v British Transport Police (1998) where the House of LordsJudicial functions of the House of Lords
The House of Lords, in addition to having a legislative function, historically also had a judicial function. It functioned as a court of first instance for the trials of peers, for impeachment cases, and as a court of last resort within the United Kingdom. In the latter case the House's...
recognised the principle that a defendant in criminal proceedings, in this case the defendant was fined £10 for smoking on a train in violation of a railway byelaw, could challenge the validity of the rule before a court, save where Parliament has indicated that such a challenge is not possible.
Current status
Much of the Act has now been repealed and updated as a consequence of a broad range of later acts, further information can be found by searching for the act in the http://www.legislation.gov.ukUK Statute Law DatabaseUK Statute Law Database
The UK Statute Law Database is the official web-accessible database of the statute law of the United Kingdom, hosted by The National Archives. It contains all primary legislation in force as of 1991, and all primary and secondary legislation since that date; it does not include legislation which...
].
See also
- Canals of the United KingdomCanals of the United KingdomThe canals of the United Kingdom are a major part of the network of inland waterways in the United Kingdom. They have a colourful history, from use for irrigation and transport, through becoming the focus of the Industrial Revolution, to today's role for recreational boating...
- History of the British canal systemHistory of the British canal systemThe British canal system of water transport played a vital role in the United Kingdom's Industrial Revolution at a time when roads were only just emerging from the medieval mud and long trains of pack horses were the only means of "mass" transit by road of raw materials and finished products The...