The Conservatives after 1979 - Transport Policy and Planning in Great Britain - page 93

bus regulation and (delayed until the 1990s) rail privatisation (6.3 and 6.5). The
Government's response to a revival of interest in rail developments is reported in
section 6.6. This included urban light rail schemes which were conceived within a
changing environment of more commercialised development planning and efforts to
revitalise inner cities (6.7 and 6.8). We conclude with the 'Roads for Prosperity' White
Paper published at the end of the 1980s which has the distinction of being the high
water mark of unsustainable transport planning (6.9).
6.2 Testing the water: deregulation, commercialisation and
privatisation
In their first term of office the Conservative's transport reforms were relatively mild.
Under the 1980 Transport Act long-distance express coaches (services with a minimum
passenger journey length of 15 miles) were exempted from service licensing. This not
only enabled coach companies to compete with one another, but also to compete with
rail. At the same time all bus fares were removed from regulatory control . A Civil
Aviation Act in the same year made possible the introduction of competing air services
against British Airways on domestic routes .
On the railways a 'Beeching mark II' report was commissioned to identify the scope
for further closures in reducing the financial deficit . The Serpell Report (DTp 1983b)
indicated that elimination of the deficit would require closure of 86% of the network.
Not surprisingly, given that many of the rural constituencies which would have been
worst affected by such cuts were Conservative held, these ideas were shelved prior to
the 1983 election.
However the scope for efficiency savings identified in Serpell was taken up. British
Rail was reorganised internally into 'business sectors', with groups of passenger services
made financially accountable for their use of assets. Managers were encouraged to
adopt a more commercial approach in developing markets and a number of improved
cross-country services were introduced.
The Conservatives also began a programme of 'privatisation' (i.e. the selling of
publicly-owned industries) which was accelerated after 1983. There were several
strands to the argument in support of this. Private businesses were thought to operate
more efficiently without potential political interference by Ministers in management
decisions, and to be more responsive to the interests of their customers. The sale
of companies generated much-needed revenues which helped the Government
hold down the level of taxation - particularly useful at a time when social security
expenditure (because of unemployment) was very high. The industries themselves were
free to borrow money on the financial markets rather than be subject to Government
restrictions and such loans no longer contributed to the Public Sector Borrowing
Requirement (PSBR). By marketing the selling of shares to the general public the
Government hoped that privatisation would increase interest in and allegiance to
the workings of the private market as a whole. A similar attitude was fostered by the
parallel decision to give tenants of council-owned housing 'the right to buy'.
The biggest and most newsworthy privatisations were of the former nationalised
utilities - gas, water, electricity and telecommunications. In the transport field the
main privatisations were as follows:
• National Freight Corporation (1982)
• British Airways (1987)