§ 8. Mr. Foulkesasked the Secretary of State for Scotland if he will increase rate support grant cash limits to Scottish local authorities to finance salary settlements which at least keep up with the level of inflation.
§ Mr. RifkindThe cash limit of £194 million represents the maximum amount of additional rate support grant which may be paid towards pay and price increases affecting local authority expenditure after November 1979, and will not be increased.
§ Mr. FoulkesAs the Minister has said that the cash limit allows for an increase of only 13 per cent., and as all other local authority costs—interest charges, fuel costs and so on—are rising more rapidly than that, will he confirm that it is the Government's policy to reduce the living standards of local authority employees?
§ Mr. RifkindI shall not confirm that, because our objective is to ensure that local authority expenditure is confined to a level that the country can afford. Local authority employees have as much interest as others in ensuring that local authorities act in a responsible way about expenditure.
§ Mr. LangDoes my hon. Friend agree that the whole point of cash limits is that they are limits? Will he reassure the House that the Government will stand by the discipline that they impose on local authority expenditure, as part of the fight against inflation?
§ Mr. RifkindI confirm that. We impose no cash limit obligations on local authorities that the Government are not prepared to accept for themselves.
§ Mr. MaclennanHow much lower than the going rate of inflation should the salaries of local government employees be?
§ Mr. RifkindThe hon. Gentleman seems to assume that the going rate of inflation is a scientific fact. However, it depends on the amount that employers choose to pay their employees as a result of wage negotiations. Local authority employees are the concern of local authorities, because they are the employers.