asked the Chancellor of the Exchequer what was the expenditure on re-armament in the financial years ended 31st March, 1951, and 31st March, 1952, respectively; and what was the average percentage of profit allowed on re-armament contracts.
Defence expenditure (as defined in Annex II to the annual Statements on Defence) amounted to £795 million in 1950–51 and is provisionally computed at £1,118 million in 1951–52. It is not possible to arrive at an average rate of profit on defence contracts. Wherever possible contracts are placed by competition. When competition is not available, the aim is to negotiate prices giving a fair return on capital employed, with special regard to the criteria approved by the 14th Report of the Select Committee on National Expenditure 1942–43 (House of Commons Paper No. 126 of 1943).