Employment (Allocation of Tips) Bill

Selaine Saxby Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

It is a pleasure to follow my hon. Friend the Member for Wantage (David Johnston), who made many important points. I pay thanks to my hon. Friends the Members for Ynys Môn (Virginia Crosbie) and for Watford (Dean Russell) for their Bill relay to get us to this point and for the work that has gone on behind the scenes. I welcome the Bill’s progress through the House.

Along with many others, I am disappointed by reports of companies keeping tips or portions of tips for themselves instead of passing them on to their staff as they should. I am confident that this will be a welcome piece of legislation for the 19% of people in North Devon employed by the hospitality sector.

North Devon is home to fantastic hospitality businesses. Each year, we welcome over 6 million visitors who come to enjoy our beautiful coastline and countryside. We love visitors coming to our area, and take pride in showing off our stunning scenery, beaches and delicious local produce. The hospitality sector is vital to our local economy, bringing in £560 million a year and supporting 11,100 local jobs—in fact, it is difficult to find a business that is not in some way reliant on tourism. The hospitality sector is key in enabling residents of North Devon to benefit financially from our visitors, and subsequently protect our world-class natural environment. Without functioning businesses, from our brilliant Brend Hotels to the Lynmouth Bay Café and the Glorious Oyster in Instow, as well as all the other fantastic hospitality businesses in North Devon that I do not have time to mention today, it would be unfeasible for our communities to continue protecting our natural world. The hospitality sector is working hard to ensure that North Devon remains a world-class destination.

Reliable staffing is key to a successful hospitality business, and the majority of businesses in the hospitality sector support their staff by distributing any tips appropriately. However, median hourly pay in hospitality is the lowest of all sectors in the UK. It is estimated that the average daily value of tips is £29 outside of London for a full-time worker, which adds up to roughly £6,500 a year. That pay is crucial to many, and in popular areas such as mine, it is a welcome addition for people facing higher house prices and rents as a result of North Devon’s popularity as a tourism destination, which is driving our current housing crisis. It is also unfair to other hospitality businesses, especially at a time of rising energy and food costs, that some unscrupulous operators are able to gain a competitive advantage by keeping a portion of tips or service charges for the business, rather than giving them to the staff, as customers clearly intended.

Given the rise of automatically added 12.5% service charges, the Bill brings welcome clarification that tips are for the staff, not the business. Tips are there to thank staff for their top-quality service; it is important that conscientious waiters, bartenders and chefs, and everyone who works to put delicious food and drinks in front of us, are recognised. Customers are quite rightly horrified at reports of businesses taking that money for themselves. The decline of cash has also made it easier for businesses to claim tip money as their own. As more people use cards for the majority of their transactions, tips are tied into the same receipt and have to be processed either at the till, or as part of regular accounts. Unlike with cash, cards take tips away from the staff on the floor and reduce transparency. Even this week, in what I had previously considered a reputable pizza chain near this House, a waiter asked for a cash tip.

As I have already said, hospitality is essential to our economy back home in North Devon, and unfortunately, many hospitality businesses are struggling to find staff. That has significant knock-on effects on the level of service businesses can provide and, ultimately, how much money they can make. Making jobs in hospitality more attractive is vital to my local businesses, and protecting workers’ rights to the tips left by customers will make the sector a more viable option. I welcome the Bill and the reassurance it gives to people working in the hospitality sector, and hope it will encourage more people to enter that vital sector. I once again thank my hon. Friends the Members for Watford and for Ynys Môn, and I am delighted to be supporting this Bill today.