To ask the Secretary of State for Transport what is his policy on allowing British Rail to borrow money from the private sector.

My right hon. Friend is concerned that British Rail should finance its operations in the most cost-effective manner possible: BR has the objective of increasing further the contribution to its business of the private sector, where this enables more cost-effective and competitive services to be provided. BR is normally required to take its loan finance from the national loans fund (NLF), which charges lower interest rates than those generally available in the private sector. BR is permitted to borrow on a temporary basis from financial institutions authorised to take deposits under the Banking Act 1987.