The Subterranean Railway (32 page)

As a result of the new law, Ashfield managed to incorporate some of the smaller rivals into the Combine, but his main target was the LCC tram network. The new Traffic Advisory Committee, set up by the 1924 Act, recommended such a merger in a report of 1927 and early the following year the Underground Group, together with the LCC, prepared Bills which would coordinate their services and pool their income, while falling short of an outright merger. The Tories were back in government but Morrison fought a successful rearguard action to stop the Bill.

Morrison, reviving the potent symbol of the LCC tram being grabbed
by the capitalist Combine, argued that the Bill was ‘common theft, a capitalist counter offensive against public property’.
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He managed to delay the progress of the Bill by organizing a lengthy filibuster at the London County Council and through fervent opposition in Parliament held up the Bill’s progress sufficiently to prevent its third reading by the time the government went to the country in May 1929. With Labour elected, and Morrison newly installed at the Ministry of Transport, the Bill was effectively dead. Morrison had seen off Ashfield, but at the end of the bloody battle through the previous six years, the two were like a pair of tired gladiators, only strong enough to shake hands.

Morrison was clear about what he did not want, but he had failed to prepare an alternative plan, apart from a vague notion for a publicly controlled transport system. After some deliberation, he decided that the best option was a public corporation, a body which was state-owned but which had a commercial remit and consequently would not require any subsidy. That was a shift away from his previous notion of municipal socialism, whereby transport would have been under the direct control of the local authority, as the tramways already were. That change was an illustration of an enduring feature of Morrison’s political career, his fundamental pragmatism. While he always fought his corner hard, he was nevertheless ready to compromise if he could achieve most of what he wanted, which the creation of London Transport undoubtedly did. Morrison had realized that a London Transport based on local authority boundaries was a pipe dream, at least in the short term. The LCC at that time covered only central London, while the transport authority would have to stretch out in a much wider circle, at least twenty-five miles from the centre. Extending the LCC’s boundaries that far would have required a major reorganization of local government, but this was not on the agenda – indeed it would take another three decades before the expanded Greater London Council was born. Therefore Morrison accepted the inevitable compromise, despite derision from his left-wing colleagues. As his biographers put it, ‘the public corporation was the logical
extension of Morrison’s previous attitude to socialism which he always stressed had to stand the tests of being both ethically and economically sound’.
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There is no doubt that, much to the benefit of Londoners, London Transport passed those tests.

Morrison began the difficult task of selling his Bill. He was part of a minority government and had to try to keep the other parties on board. Like all brilliant politicians, Morrison was able to face different ways depending on his audience. To the Labour left, he had to show that this was socialism in action, talking up his plan by telling them it was the ‘greatest socialist scheme ever put before the House’ and that ‘real coordination means a single consolidated ownership’
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which could not be achieved in any other way. To Ashfield, and indeed the Tories, he had to downplay the socialist element and stress that a public corporation was the most efficient way of running the capital’s transport system and that the board would not be a ministerial poodle but would have genuine independence.

The strongest weapon in Morrison’s armoury was the threat – mostly implied but sometimes stated explicitly – that in the future, a more left-wing Labour would create a much stronger model of state control. While the idea of creating a public corporation might have seemed socialistic to some of the old Tory duffers sitting on the backbenches, it was similar to the measures introduced by their own governments during the 1920s in creating publicly-owned organizations such as the BBC and the Central Electricity Board which were largely free from government interference. Public opinion towards such public–private enterprises had changed from hostility to acquiescence; the
Financial News
commented that a proposal to nationalize a group of private business undertakings, which not long previously might have been treated as a ‘mild flight of collectivist fancy’, now ‘arouses very little excitement indeed’.
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It was, after all, the era of Keynesian economics. In any case, the creation of a London-wide body responsible for transport was long overdue. The concept of unifying London’s passenger transport facilities stretched back to the recommendation of
a select committee of the House of Lords which had reported in 1863, the year the Metropolitan first opened for business, and therefore it could hardly be seen as a revolutionary measure.

Morrison’s key objective, as his biographers succinctly put it, ‘was to nationalize Ashfield’.
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Morrison quickly came to admire Ashfield, immediately thinking of him as the future chairman of the board because of his spirit of public service and his friendly relations with the unions. Ashfield, the consummate charmer, clearly won over Morrison and, for his part, began to realize that the public corporation was not such a bad compromise. It delivered the unified management that was essential and stopped fruitless competition.

Morrison also needed to ‘nationalize’ Pick in order to ensure that his project was successful. Pick, though, was a tougher nut to crack. Morrison found him prickly, as indeed did much of the rest of the world. Morrison said of him – rather unfairly – that to Pick, London was just a market for transport: ‘he is without social conscience, the business is everything’. That was to misunderstand Pick’s great commitment to providing the best for Londoners, irrespective of class or status. As a London architectural historian put it, ‘whether you hailed from Stepney or South Kensington, Arnos Grove or Amersham, Pick believed you should be treated equally and well. So superb custom-designed and engineered buses and trains met Londoners and took them about their business and off to play.’
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That, in a way, was just as socialist as anything Morrison believed.

Pick and Ashfield played a Mutt and Jeff double act in their negotiations with the wily politician, whereby Pick would set out the most radical alternatives to Morrison’s plans, which would be fiercely resisted, and Ashfield would come in to thrash out a compromise. Morrison, in fact, became so impressed by Pick that he eventually recommended him to be deputy chairman of the board.

There was one big concession when the Bill was published in March 1931 (after some clever footwork by Morrison who even managed to irritate the Prime Minister, Ramsay MacDonald, in his haste to
introduce the Bill). Originally, the plan was to have included the London suburban rail services, at the time controlled by the Big Four private railway companies; but, to the long-term detriment of Londoners, that part of the scheme was considered to be over-ambitious and was shelved. Later, Pick would describe that as the main ‘flaw’ in the arrangements for London’s transport system and therefore was a historic missed opportunity.
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Once he was on side, Ashfield played a vital role in winning over two pockets of potential opposition – the House of Lords and the shareholders. Ashfield had to gain the support of the owners of the Underground Group and in May 1931, at a mass meeting of the company’s investors, he made one of the great speeches of his life in order to persuade them that amalgamation and integration were the only way forward. The shareholders had been very hostile but just before the vote was about to be taken, Ashfield made a personal appeal for them to support him. It was the kind of ‘back me or sack me’ speech favoured by today’s politicans. And they backed him. As one of the audience put it, ‘it was the power of his personality that turned the scales and secured a favourable vote’.
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The main issue had been over the compensation terms for the shareholders and Morrison had made sufficient concessions for Ashfield to win them over. Morrison had agreed a scheme to give them new, redeemable stock without voting rights but which paid a rate of interest partly dependent on the success of the new enterprise. The amount varied between the different concerns that were incorporated into the new organization but the Underground Group shareholders received the most, which included a small amount of cash. Pick later thought that the deal had been too generous, thus lumbering the new organization with a level of debt that meant it soon got into financial difficulties.

The most difficult negotiation was with the most powerful company being taken over, the Metropolitan. The death of Robert Selbie, the general manager of the Metropolitan, in 1930 had weakened the
position of the Metropolitan but the company still put up a fight, managing to increase the offer for £100 nominal of its stock from £57 10 shillings to £67 10 shillings. Most importantly, the highly profitable property interests largely stayed with the shareholders; however the valuable Chiltern Court did go to the new board because it was directly controlled by the railway, unlike most of the rest of the property which was run by the Metropolitan’s subsidiaries.

After the shareholders, it was the turn of the Lords. The following year, Ashfield – in his only speech ever to the House of Lords – played a key role in convincing peers of the benefits of the creation of London Transport. By then Morrison had gone, swept away in Labour’s humiliating performance at the 1931 election, but the Bill survived. Indeed, after Morrison’s amazing political victory over the coordination Bills, another near miracle was needed to salvage the Bill once the government collapsed. Normally, Bills automatically fall between Parliaments but this was a hybrid Bill – affecting both private and public interests – and therefore not only survived the general election, at which the Conservatives gained by far the most seats, but was also accepted by the incoming government, which was a national all-party administration. Morrison could only watch from the sidelines, having lost his seat at the election.

Ashfield used the old canard that worse might ensue from a later Labour government. His main aim was to convince his fellow Lordships that the Bill was
not
a socialistic measure and he argued, rather disingenuously, that there was little difference between the 1929 Bills which Morrison had blocked and the measure before them. Ashfield was also called upon to defend the arrangements for the shareholders. The Tory Lord Chancellor, Lord Hailsham,
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closed for the government with a remarkably sanguine statement commending the Bill to the House: ‘This measure is one which is conservative in structure, which is financially sound in its basis, which is urgently needed for the traffic of London, which is supported by the vast majority of those persons whose business is to look after the traffic
of London’.
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There had been a final significant change to Morrison’s Bill, one that ultimately benefited the nascent LT by giving it greater independence. Instead of board members being appointed by the Minister of Transport, they were to be independently selected by a committee of the great and good, a motley collection of VIPs, including the respective chairmen of the Institute of Chartered Accountants, the BBC, the Law Society and the Committee of the London Clearing Banks. Only a decade earlier, Morrison had inveighed against boards with such indirect representation – calling such organizations ‘Hole and Corner Boards’;
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but clearly he had become more emollient since subsequently he was always ready to lay claim to having given birth to a highly successful concept. Indeed, despite being separate from government in this way, London Transport would be able to benefit from the favourable borrowing terms which only state bodies, with their 100 per cent guarantee of solvency, can enjoy. London Transport was, therefore, one of the first big quangos – quasi-autonomous nongovernmental organizations – long before the term was invented. Apart from Ashfield and Pick, the other five board members were part-timers: they included the assistant general secretary of the Transport & General Workers Union, a director of the Bank of England and a couple of men with local government experience, but they were all, effectively, independent of any outside interests.

London Transport formally came into being on 1 July 1933. As seemed inevitable, Lord Ashfield became Chairman of the Board, while Pick was appointed chief executive. Melding the disparate bits it inherited was to take the next two years. Although that task was a continuation of the work of Ashfield and Pick over the past two decades, the situation was, by the early 1930s, still very confused. Pick had the job of sorting out five railway companies (the suburban services of the four mainline companies had a complex pooling arrangement with LT), fourteen council-owned tramways, three private tram companies, sixty-six omnibus and coach companies and parts of
sixty-nine others. There was much kerfuffle over compensation terms, and the smaller companies had recourse to an independent three-man tribunal to determine their entitlement.

A measure of the high feelings over the issue of what many saw as nationalization is demonstrated by a curious incident involving Pick being sued for slander by a group of independent bus companies. He had said that these companies’ selfishness was ‘unmoderated and undisguised, the only object was to secure as much profit as possible in order to stake a claim which might eventually lead to compensation’.
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That was actually a perfectly reasonable and fair statement, but it led to a lengthy legal wrangle and though this was eventually settled out of court, Pick had to agree to pay some of the bus companies’ costs.