§ Mr. Severasked the Chancellor of the Exchequer what adjustments are to be made to cash limits on account of the 1½ per cent. increase in the national insurance surcharge.
§ Mr. Joel BarnettThe Government have examined the position as it affects the 1978–79 cash limits and concluded that for rate support grant purposes the increased cost should be treated as eligible for grant at the normal rate at increase order stage and the cash limits will be adjusted accordingly. The cash limits relating to the health authorities in England, Scotland and Wales will also be raised to cover the extra cost. Details of the changes this involves on individual cash limits will be published in due course in the normal way.
It is not proposed to amend the remaining central Government cash limits and the cash limits covering local authority capital expenditure on account of the increase in the surcharge.
The cash limits on nationalised industries' external borrowing have always been seen as different in kind from those on other types of public expenditure. In these circumstances, and as the amounts involved are relatively small in relation to all the uncertainties that already face the industries, it is not appropriate to increase these cash limits. In general, 319W nationalised industries should treat it as a cost and, like any commercial firm, take it into account along with other costs in their pricing policies.