The Transport Act of 1962 abolished the British Transport Commission and replaced it with the British Railways Board, which administered a number of local boards. The railways were given complete freedom on commercial policy and five years' relief from the repayment of debt. Dr Richard Beeching was appointed to implement the reorganisation. His mandate was essentially to make the railways pay.
In 1963, Beeching produced a report entitled 'The Reshaping of British Railways'. The report identified profitable and unprofitable services and revealed great unevenness in the use and profitability of railways. It recommended the widespread closure of uneconomic routes
Initially, Harold Wilson's Labour government continued with the policy of closing uneconomic lines, although it came under increasing pressure from backbenchers. In 1966, a White Paper on Transport Policy identified economic utility, rather than commercial viability, as the major objective of railway policy. This resulted in a revised railway network plan with 3,000 miles of additional track surviving Beecham's scheme.
Following a policy review in 1967, the Transport Act of 1968 made provision for major capital reconstruction on the railways and deficit relief. Certain routes that fulfilled an important function but were not financially viable were subsidised. The carriage of freight by road and rail was to integrate under the National Freight Corporation.