The Big Four

On 1 January 1923, almost all the railway companies were grouped into the Big Four: the Great Western Railway (GNER), the London and North Eastern Railway (LNER), the London, Midland and Scottish Railway (LMS) and the Southern Railway companies. A number of other lines, already operating as joint railways, remained separate from the Big Four; these included the Somerset and Dorset Joint Railway and the Midland and Great Northern Joint Railway. The "Big Four" were joint-stock public companies and they continued to run the railway system until 31 December 1947.

Competition and Lifestyles

The competition from road transport during the 1920s and 1930s greatly reduced the revenue available to the railways, even though the needs for maintenance on the network had never been higher, as investment had been deferred over the past decade.

 

Rail companies accused the government of favouring road haulage through the construction of roads subsidised by the ratepayer, while restricting its ability to use flexible pricing because it was held to nationally-agreed rate cards.

The government response was to commission several inconclusive reports; the Salter Report of 1933 finally recommended that road transport should be taxed directly to fund the roads and increased Vehicle Excise Duty and fuel duties were introduced. It also noted that many small lines would never be likely to compete with road haulage. Although these road pricing changes helped their survival, the railways entered a period of slow decline, owing to a lack of investment and changes in transport policy and lifestyles.

During the Second World War, the companies' managements joined together, effectively operating as one company. Assisting the country's 'war effort' put a severe strain on the railways' resources and a substantial maintenance backlog developed. After 1945, for both practical and ideological reasons, the government decided to bring the rail service into the public sector.