Employment (Allocation of Tips) Bill

Debate between Saqib Bhatti and Jill Mortimer

2nd reading
Friday 15th July 2022 Commons Chamber

[Saqib Bhatti (Meriden) (Con)]

I pay tribute to the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Loughborough (Jane Hunt). This is the first time I have had the chance to speak with her at the Dispatch Box. I worked closely with her while chairing the all-party parliamentary group for small and micro businesses. She was the vice-chair and was always a great source of support and an advocate for small and micro businesses. I wish her all the best and long may it continue.

I also pay tribute to my hon. Friend the Member for Watford (Dean Russell) for doggedly pursuing this agenda and pushing the Bill. The west midlands has been known for its great exports over many centuries. You may not know this, Mr Deputy Speaker, but my hon. Friend was born in my constituency, so I am glad to count him as one of the exports that is continuing to do great things in Parliament and for the people of Watford. I thank him for bringing the Bill forward. As my hon. Friend the Member for Charnwood (Edward Argar) said, it is about equity and fairness. My hon. Friend the Member for Watford has pursued this agenda and made sure that the Government recognise the importance of tips in the lives of hospitality workers. I must say, I am a bit surprised that we are even having to have this debate. So many times when I have experienced the great hospitality in my constituency, I have wondered whether my tips actually reach workers’ pockets, and whether a service charge goes to the employees or is for the services that the business—the employer—is providing.

I am pleased that there will be a code of practice to try to address the imbalance in equity and fairness. My hon. Friend the Member for Charnwood said that the majority of businesses do the right thing, and we should recognise that. The majority of hospitality businesses make sure that their staff are taken care of and instil equity and fairness, but clearly that is not the case right across the sector, which is why we need the Bill.

It may well be that we are not a tipping society. Across the pond in the United States, tipping is an integral part of the hospitality sector. When I or my friends have been there, we have always been told, “Please make sure that you tip, because it is part of the income of hospitality sector workers”. It would be remiss of me not to recognise the Government’s great work in getting the national living wage to where it is, but tips are a necessary add-on. Given where inflation is, the Bill is a timely way of addressing issues of equity and fairness.

I have a number of points to raise with the Minister, and I am sure she will address them. On service charges and the code of practice, when I speak to hospitality businesses, they tell me they have not had an easy time over the past few years. It has been incredibly challenging, for obvious reasons—lockdowns are not a friend to many parts of the economy, but specifically to businesses in the hospitality sector. They have had to try to survive, and many have been grateful for the support that the Government have given them, whether business rates relief, bounce back loans or the furlough scheme. Those have all been great assets. I was intrigued to learn that where businesses in the hospitality sector were able to take advantage of the furlough scheme, many of their workers ended up getting second jobs and then did not return to the original employer because they were being paid much more. That has contributed to a significant shortage of workers in the sector—a shortage that was already there pre covid. The issues with skills are of long standing, but they have been made more acute by the decisions that people have had to make during covid.

In that context, a tipping system that is in statute, supported by a code of practice, and embodies elements of fairness, equity and justice—those quintessential British values—will certainly go some way to addressing the acute skills shortage, so it could be an asset to the hospitality sector’s ability to start recruiting again. It is not the only way we need to address the issue, and I am sure the Minister will be working hard to look at that, but it will provide great support. I hope she can provide some clarity on that.

The other aspect of the Bill is service charges. I am less confrontational than my hon. Friend the Member for Workington (Mark Jenkinson), and I sometimes do pay the service charge, not knowing whether I can or should challenge it. Perhaps I should channel my inner Workington man—

[Jill Mortimer]

Or Hartlepool woman.

[Saqib Bhatti]

Indeed. However, the question still stands: if a business deems a service charge necessary for the service that it provides, how will that be addressed? What I do not want to see is an additional line with a new name, adding a new cost that consumers have to pay. That may well undermine the notion that we should tip, because we will already be subjected to another percentage fee. Perhaps that is something that the code of practice will look at.

While I have the Minister’s ear, let me reflect on a roundtable I attended in the past two to three weeks at Nailcote Hall, which is a great hospitality venue. Meriden, bordering Birmingham and Coventry in a beautiful setting in the west midlands, and with the airport and great connections, is a great place for hospitality businesses to flourish. When things are great, it is fantastic to see the hospitality sector thriving, but in the post-covid world, a lot of my inbox has been taken up trying to address the issues that those businesses face. In the early days of covid, that meant trying to get liquidity and loans to help them survive and then thrive, and now it means helping them through the issues that they currently face.

The hospitality sector wanted me to send a clear message to the Government that while they have had a reasonably good period of post-covid recovery, during which people have returned, a lot of work still needs to be done. We should not underestimate the damage that covid has done to the hospitality sector. I return to the point about having clarity in the code of practice. I think hospitality businesses would welcome that guidance.

On that note, I pay tribute again not just to hospitality workers but to the majority of businesses that recognise how important their workers are, how important retention is and how important it is to create an environment in which they are able to recruit. The staff, of course, make up and define a business, and for the businesses that do not have a good environment, their reputation gets out there. I wish we did not need this Bill. Businesses should be doing the right thing. The majority of businesses do; I understand why they do that. I would welcome a meeting with the Minister to discuss some of the issues around the hospitality sector and what more we can do.

Finally, let me reflect on something that my father always said—I say “said”; he still runs the business and adheres to this. He always says, “If you take care of your staff for even one day, they’ll take care of you for a lifetime.” That is certainly the approach that I took in business, and I hope that I can take it forward in whatever roles I have throughout my life.