I have read that prior to the Blair Government, local authorities were not permitted to use planning procedures at all to safeguard trackbeds for future rail use, unless they already had funded plans for reopening them. They WERE, however, allowed to protect routes for unfunded new road aspirations. The rules were undoubtedly formulated specifically to scupper future rail reopenings, as in built up areas once a vital station site is blocked by a just a dozen executive detached homes, costs and politics often mean the route is thence forever blocked for all but a major scheme of national importance with bottomless pockets, even if 95% of the rest of the alignment remains clear. In many towns, there is simply no other viable route around such an obstruction. The danger for councils was that if they attempted to refuse a development to protect an alignment, on appeal the rules would be applied strictly by a Government inspector to overturn the decision and allow the development, with the authority then incurring legal costs and often having to pay compensation to the developer. So much for local democracy, their hands were tied in this respect.
Agreed. Having been a 'plonker' myself, in my experience, it's perhaps just a little more involved, in the matter of funding. One could only refuse planning consent for dwellings if the site concerned was reserved in the Local Plan for something else. If a road scheme was mooted and land reserved, it would be protected, regardless of available funding at that point, as you point out. The difference lies in the Local Plan process. If someone put forward a scheme for a rail reopening or a road scheme, to a Local Plan Inquiry (and anyone could and can), the Inspector would require evidence that there was a realistic chance of it being constructed. In the case of roads, since the 1960s, support for such schemes has been present in every local council, most of whose Members drive to meetings, as indeed I did. Thus an Inspector would report that the road scheme enjoyed support at District and County level (perhaps National too) and would recommend it be shewn on the Local Plan, as it would be possible to envisage that funding would eventually be found in the queue for funding.
Now contrast with the rail scheme. The only proponents until recently would have been from the enthusiast circles or environmentally conscious people; certainly not from BR or its successors. Their evidence would find no support from the local authorities other than perhaps a parish council where often one person can dominate proceedings (easily done at that level). The evidence would be poorly prepared and come over as a hand-waving rant. That, unfortunately is still often the case, although the Inspectors themselves have become more environmentally conscious, as the rest of society has.
I think it is possible that the 'Thatcher years' did indeed have a down on rail, but that wasn't difficult, as it reflected the majority of society, when the car was king. In most local councils outside city areas, the car still
is king.