ABSTRACT
By the autumn of 1958 it was clear that the railways’ financial position was diverging from the estimates in the 1956 white paper. ‘No one’, Sir Thomas Padmore told the Chancellor, ‘knows what to do’.1 In fact Whitehall was already on the way to working out how it would deal with the problem in the long term (in the short term it was addressed by increasing the amount the BTC could borrow under the 1957 Act). The action taken in response to the railways’ slide into bankruptcy was shaped by wider policy developments relating to public expenditure and the nationalized industries discussed in this chapter; but just as those developments influenced policy towards the railways, they were themselves shaped by the growing realization that all was not well with the nationalized industries, of which the railways’ problems were greatest. By 1959 the National Coal Board (NCB) had joined the BTC on the sick-list and the Treasury was also concerned about the Gas Council and the North of Scotland HydroElectric Board.2 In terms of financial disaster, however, the BTC was in a league of its own. At the end of 1959, its revenue and unallocated reserves showed a negative balance of £350.6 million. The next worst figure was that for the NCB, with a negative balance of a mere £52 million.3 The developments discussed in this chapter took place as the extent of the BTC’s financial failure was emerging.
