asked the Minister of Labour whether he is aware that Remploy have been compelled to accept Government contracts at unremunerative prices in order to obtain certain contracts; and what steps, under the circumstances, he will take to prevent the worsening of their economic position.
§ Sir W. Monckton:
All work done by Remploy is unremunerative in the sense that the full cost of production exceeds the price at which the goods will be sold. Prices for Government contracts are always severely competitive and will sometimes involve a heavier loss than commercial sales. The Government Departments concerned are being most helpful, and I hope that an expansion in the number of long-term contracts will enable Remploy to produce goods more economically.
asked the Minister of Labour to what extent commercial sales of Remploy products have increased in the current financial year; how far there 207W has been a reduction in the sales personnel; and what plans there are in hand further to reduce commercial sales costs.
§ Sir W. Monckton
I understand that during the current financial year commercial sales of Remploy have increased by £724,000, which amounts to some 60 per cent. During the same period the financial saving resulting from a reduction in sales costs (due in part to reduction in personnel) has amounted to about £5,000. No further reductions in sales personnel are contemplated at present, but Remploy will keep their number under review.
asked the Minister of Labour whether Remploy are selling lines which show a reasonable sales margin; and what increase there has been in the overall sales margin earned during the past nine months.
§ Sir W. Monckton
Yes. It is estimated that the sales margin (i.e., the difference between the cost of production in normal trade conditions and the Remploy sales price) has increased by about 4 per cent. over the last nine months.