Hey Eric. RAF as the maker's initials is certainly a chance, but before I throw in the towel I would make two comments. First, the IWM is housed in the infamous (former) insane asylum of Bedlam, made famous by Charles Dickens, among others, and from which the modern word "bedlam" is derived. Are the current occupants really wholly above suspicion? Secondly, I would submit this picture:
RAF Sergeant 2.jpg
What we have here is a Sergeant in the new RAF blue uniform with, as you can see, what looks like the badge on this embroidery. Immediately behind him is a naval nco with what looks like the top badge from the embroidery.
At this point I might want to beat my chest and stomp around like the king of the jungle, but if I were to do so, someone else would probably tell me "not so fast Kong, what about this other
Naval NCO's hat badge??"
Naval hat badge.jpg
To which I would say "darn".
The problem is that when the RAF was formed out of the RFC and the RNAS they not only combined operations, they combined a lot of elements of the uniforms. The RAF adopted some of the RNAS eagle insignia forms and, apparently, the form of the NCO hat badge as well. Frankly, there may be a difference between the RNAS and RAF hat badges, but I don't know what it is. If it is an RAF badge (only, meaning they weren't used by both the RAF and the RNAS), then that would suggest the RAF on the embroidery refers to the organization, but if everything
on this is RNAS (only), I would have to agree that we may just have an ironic coincidence. Maybe someone else out there can tell the difference between the RAF/RNAS badges, but it isn't me. The one thing I would note is the Navy's prediliction for orange. Almost all of the naval badges are in shades of orange...except the badge on the bottom. Is that because it is an RAF badge? (That is an honest question, not a rhetorical one).