Restaurant chain in service charge U-turn

One of the country's leading restaurant chains has abandoned its 12.5 per cent service charge in a move that hands back control of tipping to diners.

D&D London, founded by Sir Terence Conran, said customers should be able to decide how much to leave as a reward for good service, rather than have a set amount added to their bill. It hopes the move will improve staff attentiveness.

Consumer groups, who have long likened the service charge to a stealth tax, welcomed the change. It comes into force tomorrow, on the same day as a change in the law on tipping announced in response to The Independent campaign for fair tips last year. This newspaper reported how major restaurant chains were keeping tips, and called for them to be honest about what they did with money which customers left for staff on tables or credit cards.

The Government subsequently closed a loophole allowing chains to top-up waiters' wages to the national minimum with tips or service charges, a change which comes into force tomorrow.

D&D London said it was doing away with its service charge as it was proving unpopular with diners. Instead of having 12.5 per cent added to the bill, diners will be asked to write in the amount they wish to tip. The tips will be shared among staff. Groups of eight or more will still be levied the charge.

Des Gunewardena, chairman and chief executive of D&D, whose restaurants include Quaglino's and the Coq d'Argent in London, said: "We want to change the mind-set of customers and staff. We're saying: 'If you've had great service leave a great tip, if you haven't, then don't.' It should result in better service. It is a trip into the unknown for us but that is the way they do things in America."

Despite the closure of the minimum wage loophole, unions fears restaurants will continue to keep some or all of the money left in the service charge.