Retail Store Closure: Boxing Day

Andrew Smith Excerpts

Monday 12th December 2016 Westminster Hall

[Drew Hendry]

The petitioners are quite right to look to protect the rights of workers. We heard compelling words from the hon. Member for Warrington North about the pressures that the petitioners feel need to be addressed. I am of the opinion that holidays should be respected; for example, in Scotland, traditionally, on new year’s day, shops are closed. I am unsure how we could make that work across the business sector, for small businesses and large retailers, through legislation. I have described the moves by the Scottish Government to improve the working lives of workers across Scotland through a different approach to working with businesses and organisations. In Scotland, the proper living wage, which is higher than the living wage that the UK Government have stipulated, has been adopted by a great many businesses. Encouraging good behaviour by businesses, including retailers, can and does work when we can get the message of positive change across.

[Mr Andrew Smith (Oxford East) (Lab)]

I am interested in the hon. Gentleman’s answer to the question asked by the hon. Member for Kettering (Mr Hollobone). Am I right in thinking the Scottish Government do not favour stopping large stores from opening on Boxing day?

[Drew Hendry]

I have clearly given my own view: I see this as challenging. I do not think there has been a proposition from the Scottish Government on this issue, and I would not presume to speak for them, so I gave my own answer to the question.

The way forward needs to be innovative and to include a different approach from the Government. We should adopt a model whereby retailers in particular—but other businesses as well—are encouraged to act. I gave the example of the living wage being adopted at a much higher level in Scotland. The Scottish business pledge has been signed up to, and employers have been encouraged to provide much better working conditions for their employees. There is measurable evidence that when businesses adopt those practices—when they are more considerate towards their employees and introduce measures to improve the situation for employees—they see increased productivity, increased profit and better sustainability. Staff are more likely to be retained and to stick with those jobs, and to be able to achieve a more effective work-life balance. We are discussing Boxing day, but the core of the issue is surely not just one day in the year, no matter how important that day is, or how stressful people might find it to miss out on it. This must be about making working conditions better for people across the entire year, so that they can all benefit from a better work-life balance from the beginning of January through to the end of December.

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[Bill Esterson]

The hon. Gentleman is nodding; so we both had grandparents who ran cornershops.

[Mr Andrew Smith]

You’re not cousins, are you?

[Bill Esterson]

I am struggling to make progress, Mrs Moon, because I am being given all sorts of interesting suggestions.

My grandad told me that if people cannot afford to pay decent wages, they should not open a shop. That is a good piece of advice about being a responsible employer. He might have amended that, in the context of this debate, to say that if employers cannot give decent time off over Christmas, they should not be opening a shop, especially on Christmas day and Boxing day. The hon. Member for Kettering is suggesting one option. Only 1.5% of the thousands of staff surveyed by USDAW said they wanted to work on Boxing day, so something needs to be done and it needs to be addressed. One option, undoubtedly, would be to amend the Christmas Day (Trading) Act 2004; another would be to have a Boxing day trading Act. I wait to see what the Minister has to say on that score. I suggest to the hon. Gentleman that if nothing is done through that piece of legislation, there should be action to ensure—this goes back to his earlier comments—that staff who do not want to work on Boxing day will not be under pressure to do so.

The hon. Gentleman reminded us that he voted against the Government’s attempt to include relaxation of Sunday trading in the Enterprise Bill in Committee and on Report. He will remember from that debate that points were put forward very forcefully and that extremely strong evidence was presented to us that many staff are simply unable to take time off on Sundays because of concerns and pressure, and the same applies to Boxing day, even though the legislation is different unless Boxing day is on a Sunday. We have to find some way of addressing the issue. I do not think the answer is necessarily for the Opposition to be prescriptive, but we need to get to a point where no one has to work in a large store on Boxing day unless they want to. Like the rest of us, they want to enjoy Christmas. They want to travel, see family and enjoy Christmas eve, not to feel under pressure through to Boxing day.

USDAW’s view is that the only staff who should be available to those large retailers at that time are volunteers. I suppose the point it is making is that if a store could manage purely with volunteers, there would be no objection in principle to that store opening. However, if stores are relying on only the 1.5% of staff who are prepared to work and the 5.5% of staff—I think that was the figure —who are non-committal, most stores would struggle to open without forcing staff to work.

Let me turn to the points about online trading. Things have changed since 2004. The nature and scale of online trading is very different. A number of hon. Members have made points about the impact of online trading on high street and, indeed, out-of-town stores. Perhaps the time has come to look at the needs of staff working in the warehouses such as those that the hon. Member for Kettering described in his constituency. Perhaps it is time to look at what the Government’s responsibility is towards staff who work in warehouses or for internet retailers, and the way in which they are treated. Those staff have a right to a Christmas day and at the moment they are not covered by the Christmas Day (Trading) Act, let alone by what we are talking about for Boxing day. The time has come to consider how that might be addressed and how we might get the kind of fairness that we would all expect for our own families.

Points have been made about the level of trading over Christmas. One estimate is that more than £77 billion will be spent in the Christmas period in the retail sector. Most of the people who work in retail, of course, are very low paid. As we have heard, premium pay is now a thing of the past in most businesses. In that context, is it too much to ask of the major retailers to do more to support their staff by not trading on Boxing day? Remember that those major retailers all have their own internet retail presences, so it is not as if they cannot trade online. By the way, plenty of people go online on Christmas day. It is not just Boxing day, is it?

Some online retailers do not necessarily fulfil orders. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) made the point from his own experience in the internet retail sector—he may want to intervene to set me straight on this—that there are plenty of opportunities to delay fulfilment of orders. There are plenty of retailers that do just that, so they are not open 24/7.

Exiting the EU: Higher Education

Andrew Smith Excerpts

Wednesday 23rd November 2016 Westminster Hall

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I beg to move,

That this House has considered the effect of exiting the EU on higher education.

It is a pleasure to serve under your chairmanship, Mr Davies. My delight at securing this debate is slightly tempered with disappointment, because I originally submitted it to the Brexit Department but it was passed over to the Department for Education. Much as I like and respect the Universities Minister, especially since he campaigned on the same side as most of my hon. Friends and me in the EU referendum, I wish that the people responsible for this mess were answering these questions. But never mind; we are where we are.

For a matter of such crucial importance, the future of universities barely featured in the debates before 23 June; it was completely absent from the notorious leaflet, it was not on the side of any bus and it was not in any of the TV debates. However, it seems that some catching up is under way. The other day I opened my alumni magazine from its polythene wrap to find a long essay about it from the vice-chancellor of Cambridge University —or should I say a long lament? A Prime Minister’s question and a parliamentary question were asked on the subject last week, and I recently turned on the TV and found that the House of Lords was debating it. In her answer to the PMQ, the Prime Minister affirmed the need to continue to attract the brightest and best, but I am afraid that many in the sector fear that the opposite could happen because of the decision to leave. The damage must be limited now.

Brexit in general raises all sorts of questions of uncertainty and unpredictability, from macro stuff, such as the freedom of movement and the single market, to micro issues that people can get their heads around, such as the size of a Toblerone or the price of Marmite. Universities too have macro and micro issues, all refracted through the academic prism; this debate is almost a microcosm of all such debates. I will raise some of those issues before seeking some assurances and listing some asks of the Minister.

In the Times Higher Education’s ranking of 800 universities according to a range of indicators, UK institutions were three of the top 10. We should all be proud of that, but it is now imperilled. I see a parallel with how the leave campaigners kept saying, “We are the fifth largest economy; we’ll be okay”, but now, soon afterwards, it looks as if we are slipping down to sixth place. Most of the rest of those 10 universities are in the United States, so we should be under no illusions: our placing is a result of the all-important English language, but it is also buttressed by our access to European networks and by our intellectual climate. We need to do all we can to indemnify our universities now.

On macro issues, it is arguably the role of a university to be about global reach and collaboration. Many speakers in the Lords debate spoke about soft power. Other people like the phrase “bridges, not walls”—although the chief advocate for building literal walls has found that the reputation of his own university, Trump University, has not fared that well recently, given the court case that was settled on Friday. Leaving that aside, concrete examples of research projects that have benefited from EU funds include the hadron collider space research that captivated the world.

EU students on campuses have also benefited. I taught in universities for many years before I came to this place in May 2015, and I know that many of our courses are populated by EU students—particularly STEM subjects and business studies, which are less popular with home students. When I talk to my friends in the sector, they say that a lot of masters courses would completely collapse without those students. We need some assurances on the fee code that will apply to them; we know that there are assurances up to 2018-19, but what will happen after that?

We also know that the Treasury will underwrite research funds obtained while we are in the EU, but such research streams often go hand in hand with EU structural funds—I think Portsmouth has had a medical campus out of it. Structural funds related to EU funding fluctuate yearly but can be between £50 million and £100 million.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does she agree that universities and their research and spin-offs have a crucial role post-Brexit, but that to make the most of it they need to be assured that lost EU funding will be totally reinstated, that collaborative research with researchers and institutions in the EU will be enabled to continue and that restrictions on overseas students’ post-study opportunities must be relaxed?

[Dr Huq]

As always, my right hon. Friend makes an excellent point. He has anticipated my speech very well, because EU students and their migration totals are on my list of asks, which I am coming to.

The Prime Minister’s much quoted Downing Street speech advocated

“an economy that works for everyone”.

Universities are often the biggest employers in their cities. There are lots of figures on this; in 2014-15, 125,000 EU students generated some £4 billion for the UK economy, and there is off-campus spending as well. We must not ignore all that. We need to bust the myth that universities are merely insular communities up an ivory tower with their heads in a book and provide no wider public benefit. In addition, there is the £836 million of research funds—15% of the total. Universities provide good economic value.

Universities are also changing. My constituency is home to the University of West London, but also to a distance learning and blended learning institution, Arden University. People felt that there were already pressures on the sector, but Brexit is exacerbating everything.

As well as statistics, we should also consider a wider set of philosophies. In my alumni magazine, the vice-chancellor of Cambridge wrote that

“the University has a duty of leadership that it will not forsake…Our commitment to Europe…is…to a shared cultural and intellectual heritage”.

In the ’90s, as a twentysomething, I did a stint at Strasbourg II, one of Strasbourg’s many universities. I want others to have the same opportunities. After I finished my degrees, I worked as a university staffer; the Russell Group, where I was employed early in my career, has had to lay on hotlines to provide not only emotional counselling but legal help for its institutions to get indefinite leave to remain for academics who are completely traumatised by what has happened.

I know from friends in the research community that British researchers are already being snubbed for Horizon 2020 funding or are being told, “You can’t be the lead partner institution any more because you will be gone soon”, and we have not even left the EU yet.

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[Hywel Williams (Arfon) (PC)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate. She should be more forthright in her demands of the Government; I give her some encouragement in that direction.

The terms of Brexit are clearly still to be decided. My priority, and that of my party, is to campaign for the least bad option for the Welsh economy. That includes getting the best possible outcome for higher education and putting in place every possible safety net to mitigate the potentially catastrophic effects of leaving the European Union in a hard-line way.

[Mr Andrew Smith]

Has the hon. Gentleman had cause to reflect on why Wales voted so strongly to leave the European Union?

[Hywel Williams]

The right hon. Gentleman asks a very interesting question, but given the shortness of time I shall not go too far in discussing it. The research that I and other respected academics in Wales have conducted shows that deprivation was an important factor. The constituency that received the most money from Europe—that of the hon. Member for Blaenau Gwent (Nick Smith), who is not here today—voted most heavily to leave. It is something to do with deprivation and being left behind, but it is also, of course, much more complicated than that. I should say that my constituency voted 60:40 in favour of staying in.

Plaid Cymru has been united in its determination to maintain membership of the single market and the customs union, at least, because that would be by far the least damaging option for the Welsh economy—first, because of the wide-reaching benefits of being in the single market and customs union for Wales; and secondly, because it will enable Wales to qualify for the cross-border and transnational programmes and research and innovation funding from which our higher education sector derives such benefit.

Higher education is a major economic actor in Wales. It generates around £2.4 billion of Welsh gross value added and sustains almost 50,000 jobs. As for structural funding, I once worked at Bangor University, which alone has benefited from around £100 million of EU funding over the past 10 years. That investment supports jobs as well as capital projects. Swansea University’s campus on the bay was backed by £40 million of structural funds, plus a finance package worth £60 million from the European Investment Bank. These are huge sums of money. If we are to continue our success, the UK Government need to match the commitment of the EU to the principle of regional equalisation. That is why we call for a UK convergence strategy to replace EU funding, and on a needs basis.

I opposed, and still oppose, leaving the EU for many reasons: philosophical; historical; educational; the EU’s promotion of peace on our continent; and most importantly for me, at least, the EU’s cultural and linguistic diversity, and the normality of multilingualism, which is sadly not matched in this member state and certainly not in its Parliament.

Higher education has been a central feature of Welsh policy for many centuries. When we were last independent—a little matter of some six hundred years ago—there were three main planks of Government policy in Wales, one of which was the establishment of a university to join Padua and Oxford, which were already up and running. That ambition was not realised until the 19th century; it took us four or five hundred years to get our act together. Nevertheless, it is indicative of the importance that we place on higher education in Wales, and of the need to defend what we already have, that there are now seven higher education institutions in Wales.

I do not ignore the material benefit that we also derive from membership of the EU. It is no source of pride to me that we get convergence funding because our economy is on a par with some parts of the former communist states in eastern Europe. We get that money because we are a poor country with some extremely poor regions, one of which I represent. At least the EU has a policy of convergence funding for which Wales qualifies—alas—and our institutions derive great benefits from that funding.

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[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is a pleasure to be here under your chairmanship, Mr Davies. Happily, it falls to me to congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate. I am glad that it falls to me rather than a colleague in another Department, because this is an important issue on which I am happy to represent the entire Government’s position.

The debate is timely, because the UK’s withdrawal from the European Union and its possible effects on higher education affect all Members in the Chamber and institutions across the country. This matter is of great importance, and the Government are giving considerable thought to its management, as hon. Members would expect. Higher education is clearly one of our great national assets. Hon. Members who served on the Higher Education and Research Bill Committee will be aware of how keenly the Government feel about this question and how strongly we want to help the sector through these times so we can move to calmer waters and continue to strengthen what is undoubtedly a world-class system.

In global league tables, four UK universities are in the world’s top 10 and 18 are in the world’s top 100. Those universities are home to world-class teaching and research, and we want that to continue in the years ahead. I am sure that hon. Members will have welcomed the Prime Minister’s announcement at the CBI conference on Monday that the Government plan to commit an extra £2 billion a year by 2020 to support research activities across the country in our university system. I hope that hon. Members will acknowledge that that underscores this Government’s determination to put science and innovation at the forefront of the new industrial strategy. We promised that we would do that, and we are delivering on that. I hope that in his speech this afternoon, the Chancellor will provide further details that will give hon. Members even greater confidence that the Government are clearly putting their money where their mouth is—behind our universities.

Research and innovation are key drivers of this country’s global competitiveness and key sources of economic advantage for us. Our HE sector can be proud not only of UK science: the universities across our nations are also leaders in social sciences and the arts and humanities. But we are not complacent about our success. We recognise that the EU referendum has brought uncertainty for our universities and their students and staff, particularly the non-UK EU nationals among them. We have taken steps to mitigate that uncertainty where we can, be it in relation to the terms on which EU students can access finance or the terms on which we can underwrite research funding.

I will come back to those points shortly, but I want first to reflect on the UK’s knowledge landscape. As I said, our science system is one of the very best in the world. It is highly efficient, competitive and internationally successful. Among the G7 countries, we have stand-out impact rates; ours is perhaps the most productive science base when measured by papers or citations per unit of GDP. We punch well above our weight, and we want that to continue. We recognise that our universities’ world-class academic staff are central to that outperformance and our extraordinary bang per buck.

[Mr Andrew Smith]

Is the Minister in a position to confirm reports that the Home Secretary is reviewing and revising her previously proposed limits on universities’ visa powers in relation to students who want to stay to work?

[Joseph Johnson]

In her party conference speech, the Home Secretary announced that she was conducting a review and would be consulting on arrangements for non-European economic area migration, including the study route. The process leading up to that consultation is still under way.

Small Shops Regulation

Andrew Smith Excerpts

Wednesday 2nd November 2016 Westminster Hall

[Craig Mackinlay]

There is a ratchet effect. One at a time does not seem too bad, and individually these regulations are often imposed for good reasons, but when they are put together as a framework for how small businesses and retailers have to operate, they become a true minefield of problems.

Adding to that minefield, small retailers face the new burden of pension auto-enrolment for their staff. I have no criticism of the Government’s great ambition: auto-enrolment is essential so that people can build their own retirement funds in excess of the state pension. The roll-out thus far for larger business has been successful—I am a member of the Select Committee on Work and Pensions, which has looked at that—but for the smaller employer, and notably the smaller retailer, I have asked for a free software tool that overlays the freely available real-time information software for payroll management, and HMRC has steadfastly refused.

It is good to note that the latest figures, published just last week, show the greatest ever increase in the salaries of the lowest paid due to the rise in the minimum wage. However, for smaller shops there are concerns that as hourly rates increase ahead of inflation in the years to come, the owners of these businesses might earn less than the staff they employ.

Of all tax and regulatory reforms, business rates relief has been the most welcome among smaller businesses. There has been small business rate relief, charitable rate relief, rural rate relief and enterprise zone relief. However, because of the high value of business premises in London and the south-east, new valuation assessments are in some cases creating huge increases to the business rates of businesses that are already paying higher salaries.

A real problem on the horizon that is causing much concern to the Institute of Chartered Accountants in England and Wales, the Chartered Institute of Taxation—I am a member of both—and, I am sure, the other accountancy institutes is the proposed roll-out of Making Tax Digital. If the underlying desire is to advance tax cash flows to quarterly, the Government should simply say so. People go into small business to run a business and earn a profit. They do so for aspiration and lifestyle reasons, not to spend time complying with additional administrative burdens. The Making Tax Digital programme should simply be scrapped until HMRC can prove itself capable of dealing with existing workloads to an acceptable standard. It should at least start with bigger businesses—those above the VAT threshold—that are more able to cope.

Adding together the last few years of real-time information, in which businesses have to provide monthly returns for payroll, and the software costs of auto-enrolment, and now Making Tax Digital, the Federation of Small Businesses estimates the compliance cost in software and professional support to be £3,600 per business per year. That is some way in excess of the well received employment allowance of £3,000 a year that every business can claim against its national insurance contributions.

Finance raising continues to cause difficulties. We have seen the welcome expansion of new forms of lending driven by the internet, such as peer-to-peer, but banks remain cautious, requiring guarantees and often over-zealous security coverage requirements. The reality is that family and friends are still often the primary source of seed financing. In February I obtained a written answer from the then Financial Secretary to the Treasury, my right hon. Friend the Member for South West Hertfordshire (Mr Gauke), about the take-up of the seed enterprise investment scheme. I learned that the amounts raised nationwide were extremely and worryingly low: just £168 million for 2013-14. I will not go into the flaws in the seed EIS application process or HMRC’s labyrinthine rules on getting such applications approved, but it is clear to me as a chartered accountant and chartered tax adviser that we need a lighter-touch regime to encourage more of the “friends and family” type of investment.

For many of our shops, which are often located in historic town centres, planning regulations can prove a barrier to sensible growth and plans for the future. We have the rather daft situation in which a conservation officer in one local authority will have an entirely different view from a conservation officer in the authority next door. That adds to uncertainty and costs.

Government Departments and local authorities have large procurement budgets, but bureaucratic rules still exist, particularly on contracts over a certain size and when EU procurement rules come into play. Those rules make it close to impossible for smaller retailers and businesses to even consider facing the cost and complexity of applying for lucrative bids.

My hon. Friend the Member for Bury North (Mr Nuttall) mentioned cigarettes. I have been working closely with the Tobacco Retailers Alliance and the National Federation of Retail Newsagents on the issue of illicit tobacco. For many shops, tobacco sales drive footfall and lead to other sales, but the Tobacco Manufacturers Association suggests that because of the increasingly draconian rules on tobacco sales, plain packaging, hidden counters and the tobacco taxation escalator, 30% of UK smokers now buy from illicit sources. That is hardly surprising when a packet of cigarettes costs 50p in the Ukraine and still hovers around the £2.50 mark in much of eastern Europe. Local retailers are losing not only turnover from tobacco sales, despite the low margins, but other turnover through lost footfall.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate the hon. Gentleman on securing this important debate. I agree with the thrust of his argument and with his specific point on illicit tobacco sales. Is he aware that his debate is well timed because it coincides with the excellent “Freedom from Fear” campaign by the Union of Shop, Distributive and Allied Workers, which is aimed at protecting shop workers from abuse and assault? Does he agree that small shopkeepers and their staff are all too often in the frontline of such attacks and that stronger deterrent sentences are needed to protect them?

[Craig Mackinlay]

Just last week in Ramsgate, I invited the Kent police and crime commissioner to a retail crime forum to address that very point. It was quite worrying how many small shopkeepers in the room had suffered attacks in the last year or burglaries of what is often very high-value stock. Consideration could be given to tax incentives to encourage small shopkeepers to beef up their security, not only for themselves but for their stock. The right hon. Gentleman’s point is very well made.

A Ramsgate newsagent who came to my crime forum last week estimated that his turnover is down £150,000 per year because of illicit tobacco sales. That is happening on every shop on every high street. It means less taxation on what is an entirely legally derived profit, and it means a vast cash windfall for illicit tobacco traders. HMRC estimates that the loss to the Exchequer is £1.8 billion per year; the TMA estimates that it is closer to £2.4 billion. We need a grown-up debate about the taxation of tobacco, because we have reached a tipping point that is promoting unregulated, potentially dangerous purchases of unknown tobacco products. That completely flies in the face of what are sensible anti-smoking public health measures.

I will finish a little off-key, on the issue of insolvency, on which I have listened to many smaller businesses, including retailers. Hon. Members may have to listen carefully, because the chain is quite complex. When a primary contractor in a supply chain fails, having not been paid by the head client, the insolvency practitioner who is appointed will seek to recover the contract value from the head client, but that usually comes with a negotiated settlement of contracted amounts. That leaves the smaller participants down the supply chain unpaid, and we often see a domino effect of failure and insolvency through that supply chain.

There is a sizeable business in Broadstairs called Blaze Signs. Members can guess what it makes: yes, signs. It is a substantial local employer with a substantial local workforce. It makes 20-foot high signs for Marks and Spencer, Sainsbury’s and McDonald’s—huge signs that can be seen from a few hundred yards away. On the failure of the primary contractor in the chain, Blaze Signs has been left completely unpaid, despite its signs having being delivered and erected, because the insolvency practitioner has sought payment from Sainsbury’s, M&S or whichever company is at the top of the chain.

We need to give some consideration to a technical change to Insolvency Act 1986 rules. In the instance of unpaid bills at the top of a supply chain, where there are identifiable elements further down the supply chain supplied by participants who have been part of that final unpaid contract, the rules should be changed so that the payment bypasses the failed company in the chain and the smaller participants receive their money for goods properly supplied. That would almost be akin to putting a Romalpa-type clause on a statutory footing.

I am confident that the Government fully understand the challenges that smaller retailers and businesses face. I seek the Minister’s reassurance that the commitment to deregulation will continue and that the old mantra of “one in, two out” is realised. I will be pleased to hear from her how we can improve the business environment in this country still further.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for South Thanet (Craig Mackinlay) on securing this debate on small shops regulation. He has brought his detailed knowledge of and passion for retailers in his constituency to the attention of the House, and they are fortunate to have such a champion.

As someone with a business background, I am acutely aware of the impact of regulation, which not only imposes costs on businesses but often diverts resources from more productive activity. As we heard from my hon. Friend, small shops play a unique role in the fabric of British social and economic life; he cited several statistics from the “Local Shop Report” organised by the Association of Convenience Stores that really explain the benefit shops bring to our high streets. Small shops are the lifeblood of any community.

I agree with my hon. Friend that it is easier to regulate than to deregulate. I am finding that in my new role, and I might add that I am constantly vigilant against that instinct. We are recognised as a world leader in deregulation. Over the last Parliament we delivered savings to business worth more than £10 billion through what was then the one in, two out initiative. That made a real practical difference for small shopkeepers through, for example, reduced audit requirements and the simplification of health and safety requirements.

We are committed to delivering a further £10 billion of savings in this Parliament through deregulation. For the first time, that target will include changes in national regulators’ policies, as well as laws. For instance, we are working with the Financial Conduct Authority to review the way we combat money laundering. I hope that that will deliver more effective controls on criminals and simpler financial services for small businesses, including retailers. We are making good progress against our new target, and have made almost £900 million-worth of net savings through the measures already implemented since the last election.

Deregulation is of course only one part of easing the burden on shopkeepers. We are trying to create one of the most internationally competitive tax systems, which is why we have complemented the national living wage with radical tax reforms to boost the take-home pay of the lowest-income workers. But, of course, we need to help employers to put all this into action, so we are cutting taxes and employer national insurance by increasing the employment allowance and reducing corporation tax. The increase in the employer allowance from £2,000 to £3,000 will benefit up to half a million employers and mean that a business, such as a small retailer, will be able to employ up to four people full time on the new national living wage without paying national insurance contributions.

As well as earning a proper wage now, it is vital that people save for their retirement. My hon. Friend mentioned the issues relating to auto-enrolment. So far, more than 6.7 million people have been automatically enrolled into a workplace pension by more than 250,000 employers. We understand that small employers may find complying with automatic enrolment challenging, which is why the Department for Work and Pensions and the Pensions Regulator are working to make automatic enrolment as straightforward as possible for them. For example, as part of that work, the Pensions Regulator has launched an interactive step by step guide on its website—I think my hon. Friend mentioned it.

[Mr Andrew Smith]

Will the Minister respond to the very sensible proposal made by the hon. Member for South Thanet (Craig Mackinlay) about software that will help small shops to cope with auto-enrolment?

[Margot James]

I thought that was a good idea. I am obviously not a DWP Minister, but I shall write to the Minister responsible, mentioning the idea proposed by my hon. Friend the Member for South Thanet. It seems like one of those simple steps that the Government could take to facilitate an improvement.

My hon. Friend spoke about insolvency. Of course, sometimes, no matter how hard people try, businesses unfortunately fail. That can be very difficult to live with, particularly when a small business fails as a result of the ripple effect from an insolvency further up the supply chain. The law already allows for retention clauses to be enforced in the event that a customer to whom goods have been supplied fails and those goods can be recovered. My hon. Friend suggested that any money subsequently recovered from the “head client” by an insolvency practitioner should be shared down the supply chain to particular suppliers. It is, though, a basic principle of insolvency law that unsecured creditors should be treated equally.

There is a narrow range of exceptions to that principle, but any extension to those exceptions could prejudice the interests of other creditors in an insolvency, who may also be small businesses. The regime has to balance the interests of many different stakeholders, including lenders, employees and suppliers. Returns to creditors can be improved by ensuring that the insolvency process is as efficient and cost-effective as possible. To that end, I am pleased to say that a new set of insolvency rules for England and Wales will come into force next April, which will further reduce the costs of insolvency by removing some of the unnecessary regulations and driving the increased use of technology.

On the business environment and tax, I reassure my hon. Friend that the Government are committed to creating one of the most internationally competitive tax systems for small businesses. Earlier this year, Her Majesty’s Treasury made the Office of Tax Simplification permanent. The OTS will advise the Treasury on how to further simplify the tax system. This year has seen the biggest ever cut in business rates in England, worth £6.7 billion. Some 600,000 of the smallest businesses, many of which are retailers, will not have to pay business rates again. Although there have been fluctuations in the annual investment allowance, it is now at its highest ever permanent level. We have announced that we will cut the rate of corporation tax to 17% by the end of the Parliament.

My hon. Friend said that there was a great deal of disquiet among small retailers in his constituency about the programme to make tax digital. I have heard such disquiet in my meetings with the Federation of Small Businesses and discussed it with the Financial Secretary to the Treasury. There are some signs of progress. There is no chance of the programme being rowed back or changed radically, but the Treasury is consulting on changing the threshold and removing unincorporated businesses entirely. It is also consulting on delaying its introduction for one year for businesses of a certain size, and there is even the possibility of some financial support for very small businesses. So the Treasury is listening. I think the consultation deadline is fast approaching, so I urge my hon. Friend to make haste in contributing his views on behalf of his local retailers.[Official Report, 3 November 2016, Vol. 616, c. 1-2MC.]

As we have heard, the trade in illicit tobacco robs small shops of the income they deserve, in addition to causing a tax loss for Government. In 2015-16 we lost £2.4 billion-worth of revenue because of that illicit trade, so I thank my hon. Friend for his work to counter it. In March last year, the Government published a refreshed strategy called “Tackling illicit tobacco: From leaf to light”, which outlines how we will continue to target, catch and punish those involved in the illicit tobacco trade. By joining up all interested parties throughout the Government and leading the way in the international fight against illicit tobacco, more than 3.5 billion illicit cigarettes and more than 599 tonnes of hand-rolling tobacco have been seized in the past two years alone.

In conclusion, I thank all the right hon. and hon. Members present for their excellent contributions to the debate. Small shops remain a crucial part of our local and regional economies, creating jobs and injecting billions of pounds into our economy. I am passionate about supporting the sector—indeed, I am chairing a round-table of retailers this afternoon—and want to see it flourish. I thank my hon. Friend the Member for South Thanet again for securing this important debate.

Question put and agreed to.