To ask the Secretary of State for the Environment, Transport and the Regions what factors underlie the scale of increase in the budget of British Rail in 1999–2000.[79722]

There are several factors underlying the increase between the estimated outturn of £58 million for British Rail in 1998–99 and the planned expenditure of £93 million for British Rail in 1999£2000. The main factor is an increase in net interest charges. The long-term interest rate which British Rail pays on its debt will remain unchanged, whilst the short-term interest rate which it receives on its cash reserves is expected to fall. The differential between the two rates is therefore expected to widen, increasing net interest charges.