Oral Answers to Questions — Navy, Army and Air Force Institutes

– in the House of Commons on 17th November 1942.

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Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

asked the Secretary of State for War whether he can provide any detailed information which will explain how the £1,500,000 trading surplus, recently announced by the Navy, Army and Air Force Institutes Board, will be utilised for the direct welfare of the men and women in the Armed Forces?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

My hon. Friend is misinformed about the trading surplus which is available for distribution. Against the trading surplus of £1,460,000 shown on the Army and Royal Air Force account in the printed accounts for the year ending 31st August, 1941, must be set the deficit of over £400,000 incurred in the previous year as well as the amounts totalling over £1,000,000 liable to be refunded to the Exchequer for profits made by N.A.A.F.I. on the goods forming part of the ration and in repayment of the share borne by the Government of the cost of E.N.S.A. entertainment. I will circulate in the OFFICIAL REPORT a simplified statement showing the financial results of N.A.A.F.I. trading with the Army and Royal Air Force at home and overseas during the first two years of war. This statement shows that all the profits, in so far as they are available for distribution, have been distributed with the exception of a small amount of £22,000.

Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

Does my right hon. Friend not feel that the enormous surplus has been created by the "Tommies" or others who are customers of the canteens, and that being so is it not very obvious that the managers of canteens who are treated as the best boys are those who can make the most profit?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

I think the hon. Member had better look at the simplified balance sheet and then see whether he is disposed to take the same view.

Colonel Arthur Evans:

When my right hon. Friend publishes the figures in the OFFICIAL REPORT will he also publish the gross amount over with the Expeditionary Force in France through no fault of N.A.A.F.I, and borne by the other ranks?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

That matter is not covered by the statement, but I will look into that question and see whether I can issue a supplementary statement. The one to which I have referred is simply a simplified statement of the balance-sheets.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Could the right hon. Gentleman furnish any estimate showing by how much this profit will be increased by the monopoly in sports goods conferred upon N.A.A.F.I. by the Board of Trade?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

No, but I should not imagine the increase would be serious.

Following is the statement:

££
The profit on trading with the Army and Royal Air Force at Home and Overseas for the first two years of the war amounted to6,695,577
From this amount there is a liability to refund to the Government:
*For profit margins on sales of goods forming part of the ration862,921
In repayment of the share of the cost of N.A.A.F.L/E.N.S.A. entertainments borne by the Government160,715
1,023,636
Leaving a balance of5,671,041
From this balance the following distributions have been made:
Discount allowed and Rebate paid out (principally to unit funds each month, to be spent for the collective benefit of the men)4,505,772
N.A.A.F.I.'s share of the cost of N.A.A.F.I./E.N.S.A. entertainments1,054,374
Amenities for troops overseas88,980
Grants1,000
Total distributions5,650,126
Leaving21,815
In arriving at the above profits no reserves whatever have been made against possible losses during the period of post-war demobilisation.
* The basis of charging for all items of the ration supplied by N.A.A.F.I. is to be delivered cost; hence the liability to refund to the Government the sum of £862,921, in respect of certain items charged at a higher price.

Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

asked the Secretary of State for War (1), whether the recommendations contained in the Fifth Report of the Select Committee on National Expenditure, which suggest that Navy, Army and Air Force Institutes' canteen prices should be reduced, have been effectively operated;

(2) whether the meals and snacks served in Navy, Army and Air Force Institutes' canteens, particularly suppers, are sold on a net cost basis, or what per cent. is added to cost price when determining selling price; and whether he is aware that some meal prices are similar to those charged by small restaurant proprietors and competitive caterers?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

The Tenth Report of the Select Committee on National Expenditure gave the views on N.A.A.F.I. price policy of the Departments concerned. The position to-day is unaltered, and in view of the danger of illicit trading, a danger which has increased considerably at the present time owing to the shortage of certain goods, the prices charged in N.A.A.F.I. canteens for goods which can be taken away, correspond to the prices charged by large retailers, and in many cases the retail price is fixed by the manufacturers and cannot be varied.

The prices of meals and snacks, consumed on the premises, are based on cost plus working expenses. Great care is taken to see that they do not exceed the prices in establishments with a similar class of trade, for example British restaurants; they are, in fact considerably lower than the prices charged in normal tea shops and restaurants. I do not therefore consider that there is any good reason to modify the price policy followed by N.A.A.F.I.

My right hon. Friends the First Lord of the Admiralty and the Secretary of State for Air and I, are satisfied that the N.A.A.F.I. board of management, consisting of four civilians of wide business experience and three Service members, who are in the closest touch with the Services themselves, are conducting the affairs of the business of the Corporation most ably, considering the difficulties to be overcome, and in the best interests of the Services; in fact, I consider that all ranks of the N.A.A.F.I. staff are to be congratulated on the way they are carrying out their duties.

Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

While thanking my right hon. Friend for his reply, may I ask whether he is aware that the prices of meals vary from canteen to canteen and that the prices of snacks, tasty bits, and suppers in particular, have gone up rather than down since the report was published? Will he not compare the prices of some of the small organisations which are providing a service similar to that of N.A.A.F.I. and introduce a maximum price order for the soldier?

Photo of Mr Walter Edwards Mr Walter Edwards , Stepney Whitechapel and St George's

asked the Secretary of State for War whether he is aware that the Navy, Army and Air Force. Institutes authorities at Beirut increased the price of cigarettes on the 1st October, 1942, when the latest increase of pay to the troops was due to begin; and will he take steps to see that advantage is not taken by the Navy, Army and Air Force Institutes of increases of pay to Service men?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

I am informed that the price of cigarettes in N.A.A.F.I. canteens at Beirut was raised by about ½d. on each packet of 20 on 1st October. This rise in price had been under consideration since June and was in no way connected with the increase in men's pay. It was fully approved by the Service authorities on the spot.

Photo of Mr Walter Edwards Mr Walter Edwards , Stepney Whitechapel and St George's

Is there any justification for N.A.A.F.I. increasing prices at all to the Services?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

Yes, Sir, because they have spread and adjusted the prices of a whole range of articles and must recoup themselves.

Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

Is not that the cause of all the dissatisfaction in the Services and of different prices in different areas?

Photo of Sir James Grigg Sir James Grigg , Cardiff East

It seems to me natural that if cigarettes, tobacco or other articles are received duty free in some places it is natural that there should be different prices.

Photo of Mr Evelyn Walkden Mr Evelyn Walkden , Doncaster

That is not the cause of the trouble.