Restaurants: Service Charge

Lord Rennard Excerpts

Monday 30th November 2015 Lords Chamber

Asked by

[Lord Rennard]

To ask Her Majesty’s Government what plans they have to ensure that customers of restaurant chains are made properly aware of the company’s policy in relation to service charges and tipping.

[The Earl of Courtown (Con)]

My Lords, we are currently assessing evidence gathered from our investigation into tipping practices. We will consider all the evidence and proposals put to us, including those to improve transparency, for the treatment of tips. We will propose any further action to ensure fair and transparent practice in relation to tips, gratuities, cover and service charges in due course.

[Lord Rennard (LD)]

This Christmas, many restaurant customers may decide to be particularly generous to those who serve them well, and I hope that they will. However, does the Minister accept that many of these customers will be unaware that service charges paid by credit cards are the legal property of the employer, that the staff providing the service may not receive any of this money and that some restaurant chains deduct a proportion of it to pay other business costs? It is clear that voluntary guidelines on making restaurant policies in relation to tipping and service charges properly known to customers are not working. Now that the Government have gathered evidence on the issue, will they look at measures to ensure that these charges and companies’ policies are prominently displayed in menus and on bills?

[The Earl of Courtown]

The noble Lord is quite right that some of these tipping practices are not as they should be. The code of practice brought in in 2008 listed a number of areas where tipping practices should be adhered to, such as making sure that all members of staff and all customers are aware of those practices. We will be looking at all the issues raised in the consultation, which finished on 10 November, and in time we will come to a decision on what we should do.