When tipping is an issue of high ethics

Paul Vallely's Britain Villandry restaurant, London

I WOULD NOT, I decided, leave it until the end of the meal to work out the tip. Tipping is in the news this week because the Low Pay Commission has recommended that, when it comes to the new minimum wage, tips should be included in the calculation as to what makes up the minimum pounds 3.60 an hour. So at dinner on Thursday I resolved to think about it early on.

Indeed, I went further, and enlisted a bit of assistance by inviting a moral philosopher and an economist to eat with me.

At one of London's currently modish restaurants, Villandry - minimalist decor and French provincial food sprinkled with fashionable touches of Japan and Italy - I therefore arrived with Professor Len Shackleton, head of the Business School at Westminster University, and the theologian Julie Clague, currently at Jesus College, Cambridge, who teaches ethics at St Mary's University College.

We began with first principles. Why do we tip at all? I asked as we scrutinised the menu. But the others had opening questions too. How does the tipping system exactly work? asked the economist. Do the waiters, the people who actually render the service, actually get the money? asked the theologian in what she described as a "hermeneutic of suspicion".

Now facts are a dangerous basis for any discussion in either ethics or economics, let alone in a dialogue between a practitioner of each. But I took the risk, as we tucked into our starters of revealing the results of a quick telephone survey I had conducted in which I quizzed a range of restaurants on their tipping practices.

Statistics showed, I announced, that they were now fairly evenly divided between those who imposed an "optional" service charge (12.5 per cent is the norm) and those who left it for the customer to decide. In most the tips do go to the staff, though in a few the kitchen staff get a share, and in some the management take a cut.

Tips that are paid in cash tend to be shared on the day. But the vast majority are added on to credit card slips, and are generally paid through the staff's pay packets and are therefore subject to tax and national insurance.

Some restaurants pay low wages (pounds 12.50 for an eight hour shift was the meanest I encountered, with tips taking it up to pounds 30 or pounds 35). Others pay as much as pounds 7 an hour as an incentive to get staff to stay with the firm; but then the full tip does not always go to the waiter.

"Tipping is largely about one-off encounters," began the economist. "Waiters, taxi drivers and, abroad, toilet attendants. We give to people who perform personal services."

"Tipping is an anachronism," said the theologian. "A relic of the master- servant relationship. It is also a form of moral blackmail."

"So you take a high moral stance on this," said the economist. Battle had commenced.

"No, I conform to social pressure. I don't want to be thought mean. But I think the practice will eventually die out."

The economist disagreed. "If it's a relic of class why is it so big in the US and Australia? It's an exchange to smooth social intercourse in situations where relations with strangers might embarrass."

The peppered skate and butter squash risotto arrived before the issue could be resolved. We turned to the minimum wage, on which the professor was due to give a paper the next day at a conference for the right-wing think-tank, the Institute of Economic Affairs.

I had invited Bharti Patel, the director of the Low Pay Unit, to join us too. Though she was unable to come she had offered a contribution to kick off the debate. It concerned cleaners and nursery nurses who get pounds 1.50 an hour, and one employee at Burger King who effectively got 20p an hour because he had to clock off when he wasn't serving anyone. As Winston Churchill had once warned, we now ran the risk of the good employer being undercut by the bad, and the bad by the worse.

The United States, pointed out the theologian, had not been impeded by a minimum wage, which had been in force there since Roosevelt introduced it in 1938. "People here say it will destroy jobs, but they said that about equal pay for women and it didn't. In any case a minimum wage has a symbolic importance."

"Look," said the prof, "I don't want to be seen as the ogre here. There may be a case for a minimum wage. After all for a large chunk of history people thought it fitting to lay down laws about fair wages and just prices. It goes back to Babylonian days. It's in the Code of Hammurabi. All I'm saying is that it throws up practical problems and distortions which you have to deal with."

"Look," said the theologian, "work is a good. Meaningful employment is better than watching daytime television. But people need to be paid properly. Morality doesn't have to be naive. We do need to avoid economic distortions so it is not the fact of the minimum wage which is to be debated, but the level at which it's fixed."

The conversation seemed dangerously close to consensus. So, I asked, should we pay the tip in cash?

Cash, said the economist. Because it maximises the waiter's economic options.

Cash, said the theologian. Because, though in a fallen world it could encourage tax avoidance, cash would empower the staff and increase their moral choice.

But when the bill returned the credit card slip was pre-printed to include the service charge. We could ask for it to be redone, deleting the charge so we could tip in cash, I said, but that might be embarrassing.

Quite, said the theologian. Indeed, agreed the economist. Ethics were one thing, but embarrassment was quite another. So we paid, and smiled and left, in the approved English manner.