Employment (Allocation of Tips) Bill

Kerry McCarthy Excerpts

2nd reading
Friday 15th July 2022 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate the hon. Member for Watford (Dean Russell) on bringing the Bill forward and on securing a place in the ballot so that it stands a chance of becoming law. I also thank the hon. Members for Kensington (Felicity Buchan), for Broxtowe (Darren Henry), for Hartlepool (Jill Mortimer), for Charnwood (Edward Argar) and for Meriden (Saqib Bhatti) for their contributions. They all have very simple, one-word constituency names, which is quite a relief after the previous debate.

There was a common theme in all those speeches: customers want to do the right thing by the serving staff and other people who deserve tips—hairdressers, people in nail bars or whatever—but it is sometimes difficult to be sure that the money we give because we want to reward the person who served us will go to that person. This is very much a question of fairness and wanting to treat people right.

In the previous debate, we talked about how all employers would probably want to do the right thing by a member of staff whose child was born prematurely or was sick, but that they might not be in a position financially to do so. I think this is a slightly different situation, because there is not really an excuse for not passing tips on to staff, even if a hospitality business is struggling. We know there are pressures on them from business rates, the impact of covid closures and staff shortages. Speaking to people in the restaurant trade, another pressure is the cost of some of the basic ingredients and such things as fuel bills. We know that they are under pressure, but no matter what, that is not an excuse for holding on to tips that deserve to go to the people who are being tipped.

The issue affects so many people. About 2.5 million people work in the hospitality sector, representing more than 7% of the workforce. As we have heard, often they are younger people, and it tends to be an ethnically diverse workforce. Because of the turnover in the sector—in some ways it is a casual job, often on zero-hours contracts, and there is often illegal working as well, and there is a job to be done in trying to stamp that out—the workforce are particularly vulnerable to exploitation and not being able to assert their rights.

I pay tribute to Unite the union in particular. It is a difficult sector to organise in, because it is not like one big factory with a workforce who tend to be there long term, who all identify with each other and who are in the same place. It can be difficult to fight for people’s rights in this sector, but Unite has done a good job. There was a case recently where Pizza Express was found to be deducting 50% of card tips from its staff who were on minimum wage. That was reducing their incomes by about £2,000 a year. Thanks to Unite taking action, the policy was scrapped and the company has now returned to a more equitable system where front of house staff keep 70% of the tips they make. Anyone going to Pizza Express would not have been expecting that sort of practice to be going on, and it is good that that changed. It was reported that some workers cried in relief when the change was made, because having those tips makes the difference between them being able to get by and not.

I think it was the hon. Member for Kensington who talked about the national minimum wage, which was introduced by the Labour Government, and in 2009 we had to make it illegal for tips to contribute to the national minimum wage. That was the right thing to do, and I am proud that we did that when we were in government, just as I am proud that we introduced the national minimum wage to begin with. As we are all being consensual and working cross-party today, I will not dwell on how difficult it was to get the national minimum wage through. You were probably here at the time, Mr Deputy Speaker, but it was before I was elected. I gather that the debates went all through the night, people had to sleep in their offices and it was difficult, but I am glad that we have converted those on the Government Benches and they now accept it. I genuinely mean that. The fact that Conservatives are now boasting about support for the living wage shows that we won the argument, and I welcome their support for Labour policies. I hope that after the next election, they will be on this side of the House supporting everything that we do.

As I have said, so many people work in the hospitality and tourism sectors, and many of them are vulnerable to being exploited. The Resolution Foundation reported that in 2019, 52% of workers in the hospitality sector were low paid compared with 15% of all workers. The sectors are hard-hit by the pandemic, and tips can make a huge difference. It is disappointing, as with the previous Bill we considered today, that this issue has not been addressed as part of the employment Bill we were expecting from the Government, but that was shelved ahead of the Queen’s Speech. The hon. Member for Watford shelved his previous attempt to get a Bill on this issue through because he was expecting it to be covered in the employment Bill. There is so much that we could legislate for. The Government promised action in 2016, and again in 2018, and it was in the 2019 manifesto.

I remember that after my hon. Friend the Member for Bristol North West (Darren Jones), who cannot be here today, was first elected in 2017, he had a Westminster Hall debate on this subject. It was he who first introduced me to the word “tronc”. Every time we were in the Tea Room, he seemed to want to talk to me about troncs. This debate has brought back memories. He did very well in coming near the top of the private Member’s Bills ballot a few years ago and wanted to introduce a Bill on tips, but he also wanted to introduce a Bill that would become law, because that does not happen often: I have been here 17 years and I have never managed to get a place in the ballot. When he spoke to the Department, it would not support his Bill, so he introduced something else that was very worthy but would not get much attention, because he wanted to do something the Government would support.

I think it was 2020 when my hon. Friend introduced his other Bill, so it is excellent that something has moved since then, and I am glad the Government have now managed to find a working arrangement with the hon. Member for Watford. He detailed some of the concerns that will have to be addressed in Committee, as did other hon. Members. There are some things still to be thrashed out, but I hope that Labour members of that Committee will be able to be part of a constructive working relationship and that we will get this Bill into law as soon as possible, so that the people on the receiving end of the tips can start to see the benefit.