HC Deb 09 July 1980 vol 988 cc528-9
6. Mr. George Robertson

asked the Secretary of State for Scotland when next he will discuss the shortfall in cash limit cover for inflation with representatives of the Convention of Scottish Local Authorities.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)

The next meeting between my right hon. Friend the Secretary of State and the Convention of Scottish Local Authorities on local government finance is due to be held on 17 October, when there may be further discussion of the cash limit on rate support grant in 1980–81.

Mr. Robertson

The subject of cash limits will undoubtedly be one for discussion at the convention's next meeting. Will the Secretary of State be able to offer any help to local authorities, which are having to suffer an additional £90 million burden as a result of the Government's sticking to an unrealistic estimate of inflation at 14 per cent., when they are supervising and encouraging a rate of inflation in excess of 20 per cent? When will the Government accept the blame for the reduction in services and the increases in rates that are being directly caused by their policy?

Mr. Rifkind

If the hon. Gentleman considers 14 per cent. to be unrealistic, I am sure that the House would be interested to know what he thinks about the 5 per cent. set by his Government. The cash limit is not meant to be a guarantee to local authorities. It is not meant to be an insurance policy. It represents the limit that central government and the taxpayer can pay towards local authority costs. If authorities have to make savings, they should make savings in their volume expenditure.

Mr. Henderson

Does my hon. Friend agree that what is being asked of the local authorities is no more than is asked of all of us in handling our own private accounting matters, and that if local authorities spend beyond the cash limits that will simply place a greater burden on the rest of us who have to make our private financial decisions?

Mr. Rifkind

My hon. Friend is absolutely correct. The House is well aware that manpower is the major part of local authority spending. The Scottish Office, with 11,000 staff, has been able to make savings of 400. That indicates that the local authorities have so far failed to make the sort of savings that would enable them to keep within the cash limits.

Mr. Gourlay

Is the Minister aware that Rank Strand Electric in my constituency last week gave redundancy notices to 72 employees, and that 90 per cent. of its product is usually purchased by public authorities? Therefore, is the hon. Gentleman saying that he is prepared to continue with the cash limits in order to create unemployment in a major manufacturing industry?

Mr. Rifkind

The hon. Gentleman will be the first to recognise that, if public authorities, whether local government or central Government, spend more than taxpayers and ratepayers can afford to give them, that will be the short way to economic suicide for the country.