MP tackles 'blackmail' over tips: Bill to outlaw 'sharp practice' of restaurants charging for service gets First Reading in the Commons

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The Independent Online
RESTAURANT service charges were condemned as 'out-dated nonsense' and 'sharp practice' yesterday by the Consumers' Association as a Private Members' Bill to abolish them received its first reading in the Commons.

But the move was quickly condemned by MPs and employment lawyers who insist that any gains for consumers would spell disaster for 'vulnerable' low-paid waiters and catering staff.

Michael Fabricant, Tory MP for Mid Staffordshire, claims his Bill to outlaw charges would end the 'blackmail' that occurs when people are presented with an open credit card slip after a meal.

Derek Prentice, assistant director of the Consumers' Association, which supports the call for new legislation, said restaurants relied on the 'embarrassment factor' forcing diners to pay unexpected service charges as high as 17 per cent. He also criticised the 'outrageous practice' of leaving credit card slips open so customers often unintentionally 'double tipped'. That the service charge was sometimes not passed on to waiters added insult to injury.

Thomas Kibling, a barrister specialising in catering industry litigation, forecast the Bill would further erode the wages of low-paid workers and do nothing to tackle the real problem of employers pocketing tips customers intended for waiters and other staff.

'If it is passed proprietors would be forced to make up the loss in income by raising prices or cutting wages,' Mr Kibling said. With the restaurant business in poor shape, they would opt for the latter. 'Since wages councils were abolished last year employers can pay as little as pounds 1 a week and it would not be illegal. They can cut wages as much as they like and there will always be vulnerable people willing to work legally or illegally for next to nothing.'

He said consumers' main concern should be 'ambiguously' worded menus which deliberately confuse gratuity and service payments so that employers can avoid paying tax - only service charges are subject - or use tips to pay basic wages.

The restaurateur Albert Roux, who ended service charging in his own establishments 15 years ago, insisted the move would benefit workers as well as consumers. 'I stopped the charges because my waiters could not get mortgages or bank loans because they were only earning the minimum wage. The service charge makes beggars of waiters because they have to rely on tips. Proprietors should pay a living wage and I think the Bill would force them to do that.'

At Gidleigh Park, Chagford, in Devon, one of the five most expensive country house hotels in Britain, service is included in the overall price. Its proprietor, Paul Henderson, claims that follows the current trend in this country.

Leading article, page 15

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