Diners will pay for the minimum wage

TIPPING could become a thing of the past, with an automatic service charge added to all restaurant bills, in response to plans being considered by the Low Pay Commission, writes Andrew Yates.

It is working on how to implement the national minimum wage, and last night restaurateurs predicted the proposals would increase the cost of eating out. Whitbread, with chains such as TGI Friday's, Cafe Rouge and Bella Pasta, fears the commission plans to exclude tips in calculating minimum pay for restaurant workers.

Many workers rely on tips to top up their salary. Average pay in the sector is well below the minimum likely to be introduced by the Government. If restaurateurs have to raise wages it will cost the industry millions of pounds. They are planning to claw the money back by levying an automatic service charge which will go to them rather than employees, or raising the price of meals.

Simon Ward, government affairs director at Whitbread, said: "We are considering introducing a standard service charge but that would have the effect of reducing incentives for staff to provide good service."

David Potts, human-resources director at City Centre Restaurants, Britain's largest quoted independent restaurant group, which runs Deep Pan Pizza, Garfunkels and Cafe Uno, said: "We don't levy a service charge at the moment ... but we would have to give it serious consideration if this policy is adopted. Companies must do something to maintain their profits."

Tips of the trade, page 4