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.
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?
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?
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.
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 to||6,695,577|
|From this amount there is a liability to refund to the Government:|
|*For profit margins on sales of goods forming part of the ration||862,921|
|In repayment of the share of the cost of N.A.A.F.L/E.N.S.A. entertainments borne by the Government||160,715|
|Leaving a balance of||5,671,041|
|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. entertainments||1,054,374|
|Amenities for troops overseas||88,980|
|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.|
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?
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.
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?
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?
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.