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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
It is an honour to serve under your chairmanship, Mr Crausby. I am grateful to Mr Speaker for granting this timely debate.
The all-party group on ticket abuse, which I am pleased to chair with my friend, the hon. Member for Hove (Mike Weatherley), ably assisted by the hon. Members for High Peak (Andrew Bingham) and for Selby and Ainsty (Nigel Adams) and my hon. Friends the Members for Bristol East (Kerry McCarthy) and for Liverpool, Walton (Steve Rotheram), who are vice-chairs, was set up shortly before the Christmas recess. Our short inquiry into the state of the secondary ticketing market was due to start next week, so this debate is very much intended as being, I hope, the first of many in Parliament over the coming months.
Our inquiry had been due to start next week, but unfortunately we have had to cancel our first sitting, in which we were to hear evidence from the major players in the secondary ticketing industry. It was a shame that none was able to attend, however, including the boss of Seatwave, who sits on the Minister’s departmental board. None the less, the inquiry will go on, and over the coming months we will hear from the live events industry and consumers, as well as those who do whatever they can to design out, or otherwise prevent, the exploitation of events by resellers.
Mr Christopher Chope (Christchurch) (Con)
The hon. Lady says that her all-party group—an organisation that has already made up its mind that something is wrong—will be carrying out a non-independent inquiry that will be addressed by a select group of people. How will it ever be able to produce an objective response?
Mrs Hodgson
We have not already made up our mind—obviously that is the purpose of the inquiry—but we have already received evidence from the Metropolitan police that has proved that abuses are taking place. We are looking for solutions, as Ministers asked us to do when we met them. I hope that the inquiry will uncover solutions to some problems that have already been identified. We are not self-selecting, and if the hon. Gentleman wants to come to give evidence, we will be happy to hear from him.
The Minister and hon. Members are no doubt aware of where I come from on this issue. In 2010, I promoted a private Member’s Bill, the Sale of Tickets (Sporting and Cultural Events) Bill, which was debated on Second Reading on 21 January 2011. I will try not to repeat the speech I made that day, because it was around an hour in length, but many of the points I raised then are as true and as worthy of being made today. Other hon. Members who attended that debate are present today, and I hope that they do not use the same arguments—they might have come up with some new ones. Perhaps this debate will convince them to change their minds.
I am going to go through what has happened since that debate and what should happen in the future. It is worth restating first, however, why I embarked on this campaign all those years ago and what has sustained me, despite the continued stonewalling of the current Minister’s predecessors. My daughter is a second-generation Take That fan—I being the first generation—and I was alerted to this scandalous practice by her sense of great unfairness that she had not been able to acquire Take That tickets for us, despite being ready to buy them online the minute the tickets went on sale, only to see them moments later on other websites for many times the original price.
I looked into the practice further and found that neither my daughter nor Take That were alone. In fact, that day I found just the tip of the iceberg, because this happens week in, week out with music, comedy, sport and theatrical events up and down the country. The same situation affects not only Wembley arena gigs and international matches, but small and medium-capacity concerts in provincial towns and cities throughout the country. It even affects art exhibitions; someone would have been very lucky to pay face value to see the recent David Bowie exhibition at the Victoria and Albert museum at a convenient time or, similarly, the da Vinci exhibition at the National Gallery last year. The Chelsea flower show regularly makes the news when its tickets hit many times face value on secondary sites. The most recent example to hit the headlines and inspire columns and features about the secondary market was the Monty Python reunion, probably because lots of journalists and editors wanted to go themselves.
My daughter’s experience started me on this crusade, but I have kept fighting in the light of the experiences of countless other fans of all kinds of events who are disgusted by this practice. I thank all those people who have e-mailed and tweeted me over the past few years for their support.
This is not just an emotive issue, however, although that is often the case—bear in mind that famous line about football being not a matter of life and death, but more important than that. As I did my research and more people supported my campaign, I met more stakeholders in the live events industry and became increasingly aware of the real concern that this kind of parasitical practice is detrimental to our creative industries. It stands to reason that if someone is creaming off money from the sector without putting anything in, the industry will suffer. In the case of the creative and live events sector, it would make sense for the Government to do everything possible to protect and support it, given that it sustains more than 1 million jobs and accounts for a significant proportion of our exports to the rest of the world, especially with regard to music.
Tourism is important to the UK economy as well, and our creative industries are particularly important to tourism. How many tourists come to the UK to see a show in the west end, to attend one of our many excellent festivals or to see a gig at one of our growing network of regional stadiums, such as the Stadium of Light in Sunderland? According to a UK Music’s recent report “Music Tourism: Wish You Were Here”, music tourism is worth £2.2 billion to the economy, with each overseas tourist spending on average more than £650. Those tourists will not come over here to spend all that money in our service and retail sectors if they cannot get a ticket for a fair price.
In the same vein, domestic event goers with limited funds are not likely to go to other events, or to spend a great deal at or around an event for which they do have a ticket, if their ticket has cost them many times what it should have. Even worse, if people are priced out of going to a gig, game or comedy show, that could be the end of their relationship with the band, sport or comedian that they were planning to go and see, thus harming long-term sustainability. Ticket touting is bad for not only fans, but the live events business, which was why the fifth recommendation in the UK Music report was that the Government address the issue, including through legislation if necessary, to ensure that the sector keeps going from strength to strength.
Many within the industry have had to adapt their business models to fit the market following what I would call the green light that the secondary market got from the previous Government—I am sorry to say—and the Culture, Media and Sport Committee back in 2008. Both said that the secondary market served a purpose for fans and that it could regulate itself.
Kerry McCarthy (Bristol East) (Lab)
I congratulate my hon. Friend on her work, about which I know that she is absolutely passionate. She highlights a point that is made over and over again by people who seek to defend the practice. Yes, there is a value to secondary ticketing when people want to offload tickets because they happen not to be able to make an event, or if people are able to snap up tickets at the last minute after thinking that they would not be able to attend. However, there is a big difference between those practices and the market manipulation that is taking place on a huge scale, and that is what my hon. Friend is talking about.
Mrs Hodgson
That is exactly the point that I want to expand on. We all agree that the secondary market can serve a purpose—if we have tickets to an event that we thought we could go to, but then find that we cannot attend because of a change in work patterns or whatever—but the exponential growth in online resale that we have seen since 2008, with major players coming from America to get a slice of the growing pie, proves my “green light” point. If the brakes were on before 2008, while we were waiting for the decisions, they were certainly smashed to pieces afterwards, and people in the industry have seen touts making more and more money from their work and investment without putting anything in. After all, when a ticket sells for double its face value, the tout makes more money than everyone involved in putting on the show.
People in the industry tried unsuccessfully to convince the Government and Parliament to do something about the situation. Having failed in that attempt, they decided—reluctantly, in my opinion—that if someone was going to make that money, it might as well be them. Some are doing so openly by selling premium packages or appointing a secondary website as an official partner, as Jessie J did recently. Some, however, are doing it through back channels because they do not want their fans to know that they are effectively being ripped off by the artiste they admire, as that would inevitably hurt their relationship.
The practice of allocating blocks of tickets directly to the secondary market was exposed by a “Dispatches” documentary in 2012, which I took part in. I hope the Minister watched it—I have a copy in my office that I can pass on to her if she did not. Such under the table dealing is a direct consequence of successive Governments failing to do anything to protect fans. At the very least we need to bring those dealings out into the open.
It is not as if there is no precedent for protecting fans, as we protected Olympic tickets from being exploited by touts. I am aware that doing so was a condition of being granted the games by the International Olympic Committee, but I would like to think that that would have happened anyway, given the national significance of the games and the obvious security considerations.
I note from the excellent Library debate pack—I put on record my thanks to our exceptional Library researchers for putting it together in such a short space of time—that the Scottish Parliament has passed legislation protecting tickets for the Commonwealth games, which is welcome. Colleagues will know that the unit set up to monitor Olympic touting and other crimes associated with the games, Operation Podium, also looked at the wider secondary market in the years it was in operation—from 2005 to 2013. It estimated that that market was worth £1 billion, and its initial findings resulted in the fine for touting Olympic tickets being quadrupled. I sat on the Public Bill Committee that considered the legislation that put that in place, and during our proceedings, a representative from the Metropolitan police told us that the people they were tracking who were trying to tout Olympic tickets were the same players who control most of the inventory on sale on a day-to-day basis. During our questioning, I nearly coaxed him into agreeing that action was needed to regulate the wider secondary market, but he stuck to his brief very professionally.
I might not have been successful on that occasion, but the recommendations in the report on ticket crime that Operation Podium published shortly before it was disbanded last year could not have been clearer. “Ticket Crime: Problem Profile” found:
“Due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”
Its findings led the unit to conclude:
“The lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticket market encourages unscrupulous practices, a lack of transparency and fraud.”
The unit therefore recommended:
“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets. The lack of legislation in this area enables fraud and places the public at risk of economic crime…The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”
The Minister’s predecessor, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), told me repeatedly that if we provided evidence of market failure he would reconsider his position; I refer Members to Hansard, volume 551, column 997W from 25 October 2012, and volume 542, column 66WH from 13 March 2012. The latter refers to the long-awaited report from the Office of Fair Trading, which I hope we will see later this year.
Even given the damning report from Operation Podium, the Government have still refused to engage on how to protect fans. I hope that the new Minister will differ on that and agree with me and other colleagues that, when the police say that a market needs to be cleaned up because it is acting as a front for organised crime and fraud, we should probably listen to them.
If we needed confirmation that the secondary market is allowing fraud to be perpetrated, we got it in July last year, when it emerged through an investigation by Radio 4’s “You and Yours” programme, working with security expert Reg Walker, that thousands of counterfeit tickets had been sold through the major secondary market platforms. Those platforms tell people that tickets are guaranteed because sellers receive their money for a ticket only once the buyer has been to the event without incident. That would be the case if someone were to try to shift a few tickets for an event they could not attend or if they were small-time casual touts. However, the fraud could be perpetrated because the restriction does not apply to the big players, otherwise known as power sellers or brokers—although I would call them industrial touts.
The secondary platforms compete for inventory from those major players and the commissions from their sales, so they bend over backwards to win their business. That means preferential rates and premium services, and even the odd party, with drinks and networking opportunities; but importantly it also evidently means disbursing money paid for tickets before those tickets have been verified by the end user.
Unscrupulous individuals—they would be called “gangsters” or “organised criminal networks” in common parlance—were able to establish themselves as power sellers by selling large amounts of genuine stock, although we do not know from where they got it. When they then carpet-bombed the market with false tickets, they had ensured that they got their money within days of the sale. By the time the reported thousands of fans were knocked back from concerts by the likes of Beyoncé and One Direction, those criminals were long gone.
I am not saying that the four major secondary platforms that were stung by that fraud were complicit in any way, although my understanding is that they did not exactly run to the police about that criminal activity, probably because it would harm their reputation; it was an issue of damage limitation. However, the fact that their processes allowed the fraud to happen shows that the market is not foolproof—or gangster-proof—and desperately needs reform and transparency. I have heard it argued that if those websites did not exist, all those fans would be out of pocket, whereas now they will be reimbursed eventually, if they are tenacious. However, without those websites, with their aggressive marketing and their promise of safe transactions, the criminals or criminal organisations would not have been able to sell nearly as many counterfeit tickets in the first place.
The Minister will be well aware of the trouble that rugby union has had with the resale of tickets for high-profile games. Some have credited the Rugby Football Union with driving viagogo out of the country to the safety of Switzerland, after it won a High Court battle to be told the identities of people who had broken its terms and conditions by reselling tickets to high-profile games. Of course, it is only the company address that has moved abroad; the business retains an operation in London and trades here as before. However, we have to ask ourselves, why did viagogo run away if it has nothing to hide?
Like many national sport governing bodies, the RFU is conscious of the need continually to feed the grassroots and drive participation at every level of the game. That is not all altruistic; if the grassroots are neglected, every level of the game suffers very quickly—gate receipts fall and talent does not come through, meaning that our clubs and national teams are not as competitive. That then feeds back again, damaging interest in the sport.
For that reason, the RFU ensures that a significant number of tickets for high-profile games are distributed to the 2,000 or so rugby clubs across the country. Indeed, it even announced before Christmas that that would include at least one ticket per club for the rugby world cup final in 2015. The RFU knows that it could get much more for those tickets—indeed, for all the tournament tickets—on the open market, but that is simply not the point. It wants to ensure that not just wealthy individuals and corporate buyers can afford to see the best rugby teams and players in the world.
The RFU wanted the identity of those reselling tickets to be known to ensure that they contribute to the long-term fostering of grass-roots participation, instead of making some individual a nice wad of cash. That is why the RFU and England Rugby 2015 have continually asked the Government to legislate to protect tickets for the 2015 rugby world cup from being touted. It is disappointing that, so far, the Government have refused to do that.
I hope that when the World cup comes around, our streets will not be littered with counterfeit tickets bought innocently from people who were selling them all over the place, or because they were available from unofficial outlets and fans could not tell the difference from legitimate tickets. The World cup organisers must do as much as they can to limit the number of tickets that fall into the hands of touts and to educate consumers about the official resale mechanism through which they will be guaranteed genuine tickets, as happened for the Olympics.
I am sure the Minister will be aware that touts cannot be blocked completely. She will be aware, from the last Department for Communities and Local Government questions, that if someone is desperate to secure a ticket now for the World cup final, they could do so today, on at least one of the secondary websites, for around 10 times the face value of one of the lowest priced seats. Some of the posh seats in the west lower tier would set them back almost £18,000 a pair, and that is despite the tickets not yet having gone on sale to the public; that will not happen for a further eight months. The touts obviously know that they will be able to obtain tickets, so they are selling them in advance at huge profits.
Does the Minister recognise that the situation is a direct consequence of her Department’s choosing not to get involved? The problem does not apply only to rugby; the governing bodies and major event holders in cricket and tennis have been at pains to try to enforce the non-resale clauses that they put on their tickets, for much the same reason. Alienating fans with ordinary means from prestigious events means risking the loss of their continued involvement with and patronage of the sport.
Top-flight football is the one sport in which there has historically been some protection for fans, but legislation introduced in 1994 to tackle hooliganism is increasingly being circumvented by people doing deals and accepting money from the secondary websites to authorise them to resell their tickets. That loophole must obviously be closed immediately, and there are growing calls from fans—including Spurs fans, as reported in local papers yesterday—in favour of that happening.
The websites are always at pains to point out that it is individuals, not them, who are selling the tickets. In that case, is it all right for someone to buy a season ticket for a premiership club, never to attend a match, and to make a fortune reselling their 19 home tickets on an “authorised” secondary market, when it would be illegal for a genuine fan who cannot go to one match to sell a single ticket at face value to their mate?
I asked in a written question a few months ago what conversations the Department had had with the football world about this issue, and the answer was “none”. I hope that the issue is now on the Minister’s radar, that she will give us her opinion on the practice and that she will have conversations with the football world. Does she think what is happening is in the spirit of the original legislation and will she close the loophole?
When the hon. Member for Hove secured a short Westminster Hall debate on this issue back in March 2012, the hon. Member for Chatham and Aylesford (Tracey Crouch) intervened on him and perfectly distilled the problems in the market. She asked:
“Does my hon. Friend agree that we should be putting the fan, not the salesman, at the centre of the ticketing process for live music and other events?”— [Official Report, 13 March 2012; Vol. 542, c. 59WH.]
That is exactly what we should be doing. We should put our constituents first, closely followed by the legitimate and important businesses that employ them and generate wealth for the UK. We should put last those who seek only to exploit. We can do that by legislating to make the secondary market more transparent and making people who profit from it more accountable to both the end consumer and those who own the intellectual property, on the back of which they are getting rich.
The all-party group will hear evidence on the best way of doing that. The intention is to table new clauses to the Consumer Rights Bill when it comes before the House later in the year. I will not prejudge the results of that process and the ideas that it will no doubt turn up. However, I suggest that the following is the minimum the Government can do to shut me and others up. Websites facilitating the unauthorised resale of event tickets should be made to reimburse a buyer for all costs incurred when tickets purchased through their service are found to be fraudulent. That should include all fees involved in purchasing the ticket, travel to and from the venue, and any accommodation and subsistence costs when evidence can be provided.
Mr David Nuttall (Bury North) (Con)
Does the hon. Lady fear that if she introduced that proposal it would just send those websites offshore?
Mrs Hodgson
They are already on the internet. Viagogo’s head office is in Switzerland, so they are offshore.
Mrs Hodgson
It should be enforced in the same way as we enforced the regulations on Olympics ticketing. Tickets could be sold abroad under different rules, but the number of tickets held here that had to go to UK fans had to follow UK legislation and the laws that we made.
Clive Efford (Eltham) (Lab)
Does my hon. Friend agree that if the details of tickets were provided to the organising body and they were being sold illegally, it could then cancel them? That information would be important in enforcing the proposal.
Mrs Hodgson
My hon. Friend is right. That already happens with some events, including those at the O2. If a ticket is found to have been resold illegally and can be traced, it can be cancelled. That is one mechanism that can be used. My proposal would give consumers the peace of mind that they will not be left out of pocket if they are the victim of ticket fraud. The websites that make money facilitating ticket touting say they currently aim to make that happen now, so I hope that my proposal will not be considered too much of a stretch.
To bring to the market the much-needed transparency that the police and many others say is needed, the websites should ensure that all ticket listings display the face value and seat number, where appropriate, of the tickets being purchased. That would prove that the tickets were real and already in existence. Websites selling tickets they have acquired themselves, or through direct allocations from an event holder, should disclose that clearly to buyers, and individuals selling tickets via these websites should be able to provide proof that they own the ticket they are selling.
EBay was probably the original platform for web-based touts. The main websites these days could learn a lot from the information about a seller that it allows to be seen. EBay no longer allows tickets to be sold; that part of its activity has been moved to StubHub, through which it makes commission from the buyer and seller. However, providing information could still apply to other listings, so that the number of tickets sold to other events, the number currently for sale, feedback from previous purchasers, and the record of any previous accounts held by the individual when possible could be detailed. That would allow consumers to make an informed choice about whether to buy from a tout who sells hundreds of tickets, or from a genuine fan who is selling tickets because they cannot go to the gig or event.
There is a serious problem with how some touts acquire tickets through the use of botnets and sophisticated software programmes to circumvent restrictions placed on sales by primary ticketing websites, but that is arguably more a case of detection and properly enforcing existing laws and regulations, rather than making new ones.
The secondary websites have a role to play in questioning the legality of the methods employed by their power sellers to acquire the vast inventories that some of them have. I hope that that will be explored more during the APPG’s inquiry.
I have given the Minister and the other Members here a lot to think about this afternoon, but I hope she will try to respond to as many of the different points as possible. If she cannot, I hope she will simply tell the House whether she thinks her Government should carry on entrenching and exacerbating the situation. Even the chair of the Association of Secondary Ticketing Agents admits that
“the ordinary fan is screwed. The decks are stacked against them.”
Please do not say that the previous Government and the Select Committee looked at this issue years ago, so it is all okay. I have spent the past 30 minutes explaining why that just does not wash any more and why everything that has happened in the past six years shows that the wrong decisions were made.
I could have spent much longer speaking, but I will not. I have had lots of material sent to me over the past few years, which I will present to Parliament in due course to back up the case. If, as I hope, the Minister does not want her Government to reach the end of their tenure having made the same mistakes, I will be delighted to work with her and colleagues from all parts of the House to come up with a solution that tips the balance back in favour of the fans.
As I have said before in debates on this subject, tickets give access to an experience—sometimes, a once-in-a-lifetime experience—and the normal market rules of supply and demand do not apply. The tickets should not go just to those with the deepest pockets, access to back-channel deals or criminal methods of acquiring them, unless that is what the person putting on the event wants. The Government’s job is to legislate to prevent such market failure and to ensure as far as possible that everyone has a fair and equal chance of purchasing a ticket to their dream event, at the price those putting on the event intended.
Philip Davies (Shipley) (Con)
It is a pleasure to serve under your chairmanship, Mr Crausby, and to follow the hon. Member for Washington and Sunderland West (Mrs Hodgson). I admire her persistence; she comes back time after time on the same issue, but I am afraid that time after time she is wrong about it.
I also commend the hon. Lady’s ingenuity. This matter, as she rightly said, has been extensively considered by the Culture, Media and Sport Committee, on which I serve. We found that the secondary market was perfectly legitimate and worked, on the whole, in the best interests of the consumer. The Office of Fair Trading has looked into the subject as well; it also found that the market worked in the best interests of the consumer.
The hon. Lady has decided to set up her own inquiry, from which she can at least guarantee the answer she wants. I commend her for doing that, because none of the objective looks at this issue have ever fallen on her side of the argument. I also commend her for persuading the shadow Minister, her hon. Friend the Member for Eltham (Clive Efford), that this is another populist bandwagon on which he must jump. It seems that there is not one he is not prepared to jump on at the moment. He has added this one to the list.
The premise that the hon. Lady starts from is false. She believes that, by definition, all ticket touting and all reselling of tickets must be done at a profit, but ticket touts can make a loss—some 50% of the tickets sold on viagogo are sold at face value or below. When she and, I hope, the Minister go back over the Select Committee reports and the Office of Fair Trading reports, they will note the excellent contribution to our Select Committee inquiry made by the right hon. Member for Barking (Margaret Hodge), who gave evidence as a Government Minister. We all know she does a fantastic job as Chair of the Public Accounts Committee. She was robust in her defence of the secondary market and explained the reasons why we should not intervene and why it works in the best interests of consumers. I hope everyone will look over the evidence that she gave.
I see my hon. Friend the Member for Hove (Mike Weatherley) in his place, and I have no doubt he will be looking to trouble the scorers as well. He speaks consistently about intellectual property rights for event promoters, but I take a different view. My belief is straightforward: if someone sells something to somebody, they have sold it on for that person to do as they wish with it. It happens all the time in the world of retail, which is where I came from.
When I was at Asda, we sold products, people bought them and whatever they did with the products was up to them. We used to get lots of letters from people saying that our Asda-branded whatever had been spotted being sold in a corner shop down the road. Our view was that that was fine, because it was their product. If they wanted to sell it on at a higher price than they paid, that was fine, because that is how the free market operates.
My advice is that if someone does not want a person to sell a product on, they should not sell it to that person in the first place. The first rule of the free market is that if a product is sold to someone, the product belongs to them and they can do with it as they please. That happens in all walks of life. People buy stamps off other people as an investment and hope that one day they can sell the stamps on to someone else at a profit. People do it with gold. I am sure that the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), would have loved, when he sold the gold off at a ridiculously low price, to have said, “By the way, you cannot sell it on again at a price higher than what I have sold it to you at.” All that would have done was emphasise what a ridiculous mistake he made in the first place.
Kerry McCarthy
In a way, I am reluctant to intervene on the hon. Gentleman, because I know that is simply rising to his bait, but the difference surely is that in his examples—they are faintly ridiculous—the secondary market does not in any way, shape or form distort the primary market. The sort of secondary market that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) is talking about completely and utterly distorts the primary market. The hon. Gentleman says that people can walk into Asda and buy whatever they like at the price that is charged to everyone, but they cannot do that with ticket prices these days.
Philip Davies
I do not agree with the hon. Lady. For example, when a new designer handbag comes on to the market and gets a lot of hype, there are massive queues in department stores of people hoping to buy one of the first 25 to go on sale. When new gadgets come out at Christmas time, there are massive queues of people hoping to be one of the few to get the few in stock.
The same happens with toys. I remember that a few years ago there was a massive craving for Buzz Lightyear toys and people queued up to get one. We all knew that the first 20 or 30 people, or however many could buy one, would resell the toys at a massively inflated price, in much the same way as happens with tickets. That is exactly what happened. Is anyone suggesting that the Government should intervene in the law to stop people reselling their Buzz Lightyears or their designer handbags, or whatever goes on sale in department stores with a lot of hype, at a higher price? If they do not want the Government to intervene to stop that—Lord help us if people want us to intervene in the market in that way—I do not see why they would want the Government to intervene with tickets. I do not see how tickets are a different commodity from designer handbags, toys or anything else.
Mrs Hodgson
The difference is that these are tickets to an experience. To use the Buzz Lightyear example, the situation would be like someone buying all the toys from the shop’s stock room so that other people never even had the opportunity to buy them off the shelves. That is what is going on. Customers have not even got a chance to buy them, because they have been bought out of the stock room.
Philip Davies
That might apply anyway. I do not know how shops operate, but it might well be that the shops say to staff, “If you want one, you can have one.” By the time any real punter gets in there, the items have all gone to members of staff. Does the hon. Lady really think that the Government should legislate to stop that from happening? That would be nonsensical. I do not see tickets as being different from anything else that people choose to buy and sell on at a higher price.
Mike Weatherley (Hove) (Con)
I also hesitate to rise to the bait, but is the point not about who owns the product? If someone buys a newly released iPad from someone else, it becomes their property to own and sell on, as would happen with baked beans. With tickets, the creative owner might prefer them to be sold in a particular way. For example, sports facilities might want a children’s area to build up support. The facilities could sell those tickets at much higher prices, but they prefer to sell them for a different reason than to be sold on again. It is the facilities’ products to do what they want with.
Philip Davies
My hon. Friend is right. It is the facilities’ product to do as they want with. If they want to go from house to house, picking the individual they want to sell those tickets to in a private transaction, they are free to do so. They choose to sell them in the public domain for anyone to apply for them. They sell them as they have chosen to sell them, and people are purchasing them as they have been invited to purchase them, so I am not sure what point my hon. Friend is making.
Mike Weatherley
That is an interesting point. If the owner of the ticket—the creative holder—wanted to restrict the people to whom it could be sold, does my hon. Friend agree that they should be able to?
Philip Davies
If the creator wants to sell the ticket in a particular way that to him or her guarantees that it goes to a particular person, they are free to do so. If they want to put it on the open market, the chances are that it will be purchased on the open market, and that is what happens. It is no good people bellyaching when people buy their tickets on the open market—presumably that is why they were put on the open market in the first place.
The idea that ticket touting negatively affects the artist or the person who is setting up the event is for the birds. If somebody is selling 50,000 tickets at £20 each, they have decided that they want to rake in £1 million in ticket sales from the event. It seems to me that the ticket touts are helping by buying up the tickets, because when the 50,000 tickets are sold, the event organiser and the artist have reached the amount—£1 million—that they were hoping to gain from ticket sales.
Whatever happens on the secondary market has no impact on the income that the event organiser has received from fixing up the event. It is still £1 million. If the event is not as popular as some people might have anticipated, the tout may well have done a favour by buying up tickets that they are not able to resell. They did not really want to go to the event, so they have helped the event organiser and the artist. The idea that reselling works is against the interests of the organiser and the artist is absolute nonsense. I hope that the Minister appreciates that and that we can nail the point for now.
My hon. Friend the Member for Hove is right: the event organiser can do lots of things to try to discourage people from selling tickets on. For example, for an event in, say, four months’ time, instead of selling all the tickets in one go the moment the gates open—therefore encouraging the secondary market—the event organiser could sell a few tickets week by week, including up to the final week before the event. In that case, the secondary market would not be quite as attractive because tickets were still going to be available the week before in the primary market.
If the issue is so massive for event promoters and organisers, why do they not take the steps within their capability to try and deter the market? As far as I can see, it is all crocodile tears. If such a terrible thing is happening, which is against the rules, and if people put on the tickets that they are not for resale, it is open for ticket sellers, event organisers and artists to take people who resell the tickets to court. If they are so sure of their ground on the issue, why not do that? Perhaps it is because they fear that the courts will decide that what they are trying to impose is an unfair condition on the selling of tickets. I suspect that they shy away from doing so because it will be exposed for the world to see that what they are trying to argue for is anti-competitive and an unfair thing to impose on somebody whom they are selling to. I suspect that is why we get all the hot air in places such as this, but why no one stumps up the money to take the case to court.
On looking after the interests of the consumer, I should mention the net book agreement. I was at Asda when we bust that agreement. What used to happen in years gone by was that publishers—I am sure my hon. Friend would have supported publishers at the time—produced a book and set its price, and nobody else could sell it at any other price. Asda, when I was there, felt that that was terrible for the consumer. We wanted to sell it for less and thought that our customers wanted to buy it for a lower price, so we decided, “Blow it, we’re going to sell them at a lower price anyway”. Of course, the publishers took Asda to court and what happened? The courts found in Asda’s favour and book prices collapsed, to the massive advantage of the consumer.
Presumably everybody here who is arguing against the secondary market for tickets are the sort of luddites who would have kept the net book agreement in place, thinking that publishers should have the right to charge whatever they like for a book and that retailers should not be able to sell it at a lower price. I think that was a nonsense then and it is a nonsense now, and there is absolutely no difference between the arguments. Saying that the event organiser should be able to charge what they like for a ticket and not allowing anyone to sell it for any other price is the same as saying that publishers should be able to sell a book at a price they set, and that nobody should be able to sell it on at a lower price themselves. I hope that the Minister accepts that argument as well.
The hon. Member for Washington and Sunderland West mentioned the rugby world cup. It seems to me that for that tournament, the secondary ticket market should not only be allowed to happen, but is desirable. As I mentioned to the Minister, people in New Zealand may well be very confident that their team will get to the final, so they might buy up tickets for the final in huge quantities. However, their team might get knocked out in the semi-final. We need some mechanism for allowing fans of South Africa, for example, who may have beaten New Zealand in the semi-final, to get hold of the tickets that all the New Zealanders have bought.
It seems to me that the secondary sale of tickets works to the advantage, rather than the disadvantage, of the consumer. It would be a bit of a sickener if someone bought the ticket for their country’s game, but could not sell it on because of some well meaning legislation that the hon. Lady is trying to impose.
We then hear the typical argument that real fans suffer. I have no idea how one defines a real fan, but I will hazard a guess that if someone is prepared to stump up £2,000 or £5,000 for a ticket to see a concert or a sporting occasion, they are a real fan. No real fan would stump up such a huge quantity of money to go and see something that they were not really interested in. It seems to me that the resale of tickets is more likely to guarantee that real fans turn up than any other mechanism.
The Labour party used to believe in the redistribution of wealth, but that is obviously long gone from its DNA. The chances are that the person wanting to buy a ticket for £5,000 is wealthier than the person wanting to sell it for £5,000. If somebody who is relatively poor wants to sell off their ticket at a huge profit, that seems a rather good redistribution of wealth from the rich to the poor. Obviously, however, the Labour party has given up on the redistribution of wealth. I am sure that many of its members and supporters would like to know that.
Nobody loses out at all with the resale of tickets. The event organiser gets the income that they had budgeted to get from the event, so they certainly do not lose out, nor does the artiste, who is guaranteed to perform before a packed audience. If I want to go to an event but am not sure whether I can, because of work commitments, when I finally decide that I can, I have only one mechanism through which to buy a ticket—the secondary market, which gives me an opportunity to go. If that market was not allowed, I would have no chance of going at all.
If I do not want to pay the inflated price that is being asked for the tickets, I do not have to. Nobody is forcing me to, so I have not lost out through the secondary market. I have been given a choice and an offer that otherwise I would not get. I am not entirely sure who loses out with the resale of tickets. I do not see who the loser is, to be perfectly honest, because for many occasions, the tickets will sell out in five minutes flat, so many legitimate people would not be able to go. The secondary market gives them a chance that they would not otherwise get.
The hon. Lady mentioned people selling on tickets that do not exist. That is called fraud. It is already illegal; I am not entirely sure why she wants to make it more illegal, but we cannot make something more illegal that is already illegal, so we can easily dismiss that.
Finally, the hon. Lady seems to think that the public are on her side on the issue, but I have no idea on what basis. ICM conducted opinion polls on the issue and asked people about this premise:
“If I had a ticket to a sporting event, concert or other event that I could no longer use, then I should be allowed to resell it.”
Some 86% agreed with that. Some 83% agreed with this premise:
“Once I’ve bought a ticket it is my property and I should be able to sell it just as I can any other private property”.
The enthusiasm of the hon. Member for Eltham appears to have wilted at that point, but that is not the case for 83% of the population. Some 86% of people polled agreed that
“It shouldn’t be against the law for people to resell tickets that they no longer want or can’t use.”
The same opinion poll showed that a clear majority thought that the price of a ticket should be determined only by what they were willing to pay. That seems to fly in the face of all the arguments that we have heard today.
I hope that I have instilled some balance into the debate, and that the Minister will bear in mind the Select Committee and Office of Fair Trading reports, as well as the excellent evidence given by the right hon. Member for Barking to the Select Committee, to the effect that what we are debating is the free market in operation. We should not try to outlaw it, but encourage it, because it works in the best interests of the consumer. That is what the Select Committee and the OFT found when they looked into the matter.
Mike Weatherley (Hove) (Con)
It is with trepidation that I follow my hon. Friend the Member for Shipley (Philip Davies). I enjoyed his speech very much.
Music, theatre, comedy and sport are vital to British society and the British economy. Our creative industries are worth more than £36 billion a year. They generate £70,000 a minute for the UK economy and employ 1.5 million people in the UK. I have consistently been a champion of the free market and I want to make it clear that I do not have a problem with artists or sports teams charging whatever prices they want for the services that they offer. That is their prerogative and they should be allowed to set the prices of their tickets or, if they choose, to sell them through secondary ticketing or auction websites. However, as the online marketplace has become quicker and easier to use, a large number of unsavoury and illegal practices have sprung up surrounding ticket reselling websites. That is why I, along with colleagues, have set up the all-party group on ticket abuse.
One of the key aspects of an honest and transparent ticket purchasing process is the intention of the buyer at the time of purchase. No one would begrudge a Rolling Stones fan who has become ill the day before the show the opportunity to sell their ticket on to someone else. However, an increasing number of people are buying tickets with no intention of going to the event. Furthermore, the situation does not affect only those fans who waited too long to buy tickets. With internet selling becoming more streamlined, touts are able to use sophisticated computer systems to buy large volumes of tickets automatically, mere seconds or minutes after they go online. It can often be practically impossible for the target fans to access the event, so they are forced to rely on an artificially created secondary market, and the content creators—and the Treasury—are deprived of revenue from the event. That is unacceptable.
Mr Nuttall
My hon. Friend said that the creators would be deprived of income, but surely a sell-out is a sell-out, and they have got as much as they expected to.
Mike Weatherley
The argument goes that the creator will still get the same sort of money, but that is not true, especially if there is an audience that they want to target. Taking away control from performers also takes away control of how money is distributed. I have no problem with a band giving a promoter tickets to sell on the secondary ticket market, if they want to generate additional income. However, the process should be transparent.
My hon. Friend did not mention the fact that the Treasury is disadvantaged by the practice. There are people who do not pay VAT or tax on their secondary ticketing sales, and that is wrong. If they make a profit from someone else’s activity, I do not see how he can disagree about their paying that.
In 2011, I supported the private Member’s Bill on ticket touting promoted by the hon. Member for Washington and Sunderland West (Mrs Hodgson). The sensible suggestion that profits from re-selling should be limited to 10% more than the face value of the ticket has already been adopted in some Australian states. We can argue about whether 10% is the correct amount, as there could be ticket fees and so on in addition.
Andrew Bingham (High Peak) (Con)
That would not work, because it would drive certain people to the underground market, as they would have to get more than 10%. Surely it would be back to blokes outside concert venues shouting “Tickets, tickets, tickets.”
Mike Weatherley
I tend to agree. I am not that worried about the odd ticket tout outside a venue, but I am worried about people making money from a bank of about 1,000 computers in a room the size of this one automatically buying tickets, when they have no intention of going to the gig. Those are not touts as we know them. Things have substantially changed since 2006-07. We are in a completely different sphere of ticket purchasing. Those people do not buy tickets for any other reason. The solution of a 10% limit on reselling would stop the people who buy purely intending to resell, rather than to go to the gig, who take rights away from the intellectual property creator.
Even for those who have not personally had experience of ticket touts, the extent of the problem is illustrated by the lengths to which they go to subvert ticketing controls. A potential solution to touting, which has been adopted by some venues already, is credit card verification, and many other methods are available. Nevertheless, touts often generate such large profits from many events that even that method is ineffective.
That does not, of course, address the issue of completely fraudulent tickets. When people buy, or are driven to buy, from a ticket reseller, they expose themselves to a greater risk. It is not uncommon for someone to buy tickets through a website that looks genuine, and make travel and accommodation plans to attend the event, only to discover when they arrive at the venue that their tickets are fakes. I take the point made by my hon. Friend the Member for Shipley that such activity is already illegal, but secondary ticketing makes such illegal activity easier.
The Metropolitan police published a comprehensive report on fraudulent ticketing and the danger it posed to the Olympics that specifically cited ticket fraud, touting and ticket reselling websites as areas of concern. Among several issues, the Met noted that websites with their servers based overseas were causing serious problems by advertising fraudulent tickets and then making it difficult for law enforcement agencies to track the offenders or shut down illegal sites. That is an irrefutable fact, and the Culture, Media and Sport Committee did not address it in 2007.
The Met’s report stressed, as I do, the need for an open and transparent system for ticket reselling, with clear and appropriate regulations. Transparency is the key to protecting not just content creators but ticket buyers from dubious and misleading transactions. It is common in the entertainment industries for all or part of the fee for professionals involved in an event to be paid in tickets. The venue might be paid in tickets to a corporate box, or a promoter or manager might be given them as part of their fee. That is done with the tacit understanding that the recipients of those tickets will subsequently be able to sell them on for significantly more than their face value. It is, of course, the prerogative of the content creators to do that if they want to, but it should be done transparently.
Some of my colleagues, including my hon. Friend, have suggested that trying to regulate ticket touting represents an interference in the natural free market. However, that is a misunderstanding of one of the key principles of the free market—the ability of a market to respond to demand by increasing supply. That is one of the five conditions of a free market. In the case of sports matches or live music, there is no way to increase supply. There are only so many games in the season and bands can only play so many dates.
Mike Weatherley
I have no problem with someone doing that if they want to. My point is that someone who does not want to do that, but wants to sell to a particular sector of society, such as young fans or particular fans in certain areas, should be allowed to apply to do so. I see nothing wrong with the people who provide the content suggesting how much they should get for it. If they want the free market to decide the price, I would be the first to say that that is right. If they want to give tickets to the promoter to sell on for whatever price they can get, as part of the deal, that is fine. Let us not, however, say that there should be no transparency about it, and that it should be under the table. We should bear in mind the police’s comments about secondary sites driving illegality.
Philip Davies
Obviously the event organisers do not care very much about it. I know that my hon. Friend has influence with people in the music industry. If they want to sell tickets to a young target audience, I am happy to use my good offices to try to distribute them around schools in my constituency—I hope that he will tell them so. However, they choose not to. They put them on the open market for anyone to get them, as they choose. If they are that bothered, perhaps they will take up my offer to distribute them in such a way.
Mike Weatherley
I would be delighted if my hon. Friend would meet me and some of the people from the industry. In fact, it would be fantastic if he was able to come along to some of the meetings of our all-party group at which we could hear from band managers and promoters about some of the problems that they experience. They tell me that this is a huge problem and that their fan bases, to whom they would like to distribute the tickets, also find that it is a problem. That is not me saying it, but the people who are in control of these things. They are looking to the Government to help them with sensible and fair regulation.
The proposals from the hon. Member for Washington and Sunderland West are measured and sensible. This would be not a huge leap forward, but a gentle nudge in the right direction that would assist the process of tickets being provided at the price that people or performers would want. I see nothing wrong with the proposals. The free market can still operate in situations in which performers would like it to operate. All we are saying is that there should be some sense in the whole thing.
Andrew Bingham (High Peak) (Con)
I did not intend to make a speech, because I just wanted to hear Members’ arguments—both sides of the argument have been put with great passion. My view is that we must take a pragmatic approach. There is a market for secondary tickets. If people cannot go to a concert, they have to get rid of their tickets. We live in a new world in which we have the internet, and we need to harness it. I think that what has been suggested is trying to preserve in aspic for a new world the way in which tickets used to be dealt with. I have looked into the secondary market and how people operate and, quite honestly, I think it works. I think it is a good system. People can offer their tickets for sale for the price that they want, and if other people want them, they can buy them. I hear the argument, “Oh, well, the ticket prices will be inflated,” but as my hon. Friend the Member for Shipley (Philip Davies) will know from his days at Asda, if people overprice things, no one will buy them. The market will dictate what price tickets will sell at, and we should let the market do that. I do not think that we need to be wrapping things in legislation at every turn.
Many of us will remember the days when there seemed to be people outside sporting events and musical events with fistfuls of tickets. I have never bought a ticket from a tout and I would not do so, but if someone does buy a ticket from a tout outside a stadium, they do not know whether it is genuine, and if an honest person is trying to get rid of a ticket because a member of their family cannot go to the event, they do not know whether the person buying it is paying them in forged money—we hear tales about forged £5 and £10 notes.
The secondary ticketing market, of which I was unaware until I looked into the issue in greater depth, provides a secure way for people to dispose of a ticket that they cannot use. There is a guarantee that they will be paid for the ticket and that the person buying it will get the ticket that they want. With regard to the price being driven up, let us say that there is a surplus of tickets to see the Rolling Stones, Motörhead or whoever my hon. Friend the Member for Hove (Mike Weatherley) would like to go and watch. I do not know what my hon. Friend the Member for Shipley likes to watch, but we will have a punt on Barbra Streisand or someone like that. If there is a market for the tickets, that will dictate the price. As has been said, many tickets go for a price below their face value, because that is what the market will allow.
Philip Davies
I will not go through my tastes in music with my hon. Friend, but I just want to point something out. Does he agree that many events do not even allow people to get a refund, and that if we do not allow people who cannot go to events to sell their tickets, we are in a completely ludicrous situation? If event organisers are so busy, perhaps a good place to start would be to force them all to allow people to receive full cash refunds if they cannot go to an event, which does not happen at the moment.
Andrew Bingham
Yes, and that practice has a knock-on effect because people think, “Actually, I’m not going to buy a ticket, because I don’t know whether I can go. I don’t want to pay out however much for a ticket because if I can’t use it, I’ve lost the money.” My hon. Friend makes a valid point.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) made a point about corporate responsibility. I think that legitimate companies with secondary ticket websites will be concerned about their corporate responsibility. I have looked into the issue and held discussions with them. I have talked about the internet and how the world is different, and there is a different way of dealing with tickets. I hear the argument about bots—roomfuls of computers just harvesting tickets. As far as I can see, however, such legitimate companies are aware of their corporate reputation and, as a result, are making every effort to prevent that sort of thing from happening. That is the way in which the secondary market and the systems seem to work. We are in a brave new world in which we are dealing with the internet. When tickets came out many years ago, I remember that we would sit there on the phone, pressing redial, redial, redial. Now we are on the internet, although sometimes it seems somewhat the same—we just hit refresh, refresh, refresh. Learning to deal with the secondary market is about using the internet, not abusing it.
I heard what was said about previous inquiries. My hon. Friend the Member for Christchurch (Mr Chope) said that the all-party group had made its mind up, but I am a vice-chairman of that group and I can assure him that I might not fit the template that he seems to imagine for the group, although that might disappoint one or two people. Let us carry out an open and honest inquiry. I have my views, and I will listen to all aspects of the argument, as I am sure that we all will. However, I note that the inquiries in previous Parliaments found nothing wrong with the current system, and I do not think that Government legislation is especially necessary at the moment. The system seems to work, but by all means let us have another look at it. The world has moved on but, as I said, my view is that at the moment it seems okay.
Mr David Nuttall (Bury North) (Con)
It is a pleasure to follow my hon. Friend the Member for High Peak (Andrew Bingham). This has been an interesting debate. As we have heard, we have perhaps been round this course before in Parliament—no doubt we will do so again—but the debate is no less enjoyable for that. The hon. Member for Washington and Sunderland West (Mrs Hodgson), who opened the debate, said that some hon. Members might have new arguments. I do not have any new arguments, because my belief in the free market is the same today as it was three years ago. It was on 21 January 2011—three years ago to the day—that we debated the hon. Lady’s private Member’s Bill, and my view today is the same as it was then. When someone buys a ticket, whether they are an individual or a large corporate entity, it is up to them what they do with it. It is not the job of the Government—it is not the job of the Houses of Parliament—to try to legislate to control in any way what they should do with it.
I agree that it is up to the original owner of the ticket—the band, promoter, sporting team or whoever—what they do with it. If they want to sell it, to whomever they want, I am happy to go along with that idea. It is perfectly sensible and right that they should do that. I do not accept that it is the job of Parliament to try to say to anyone that they cannot sell their ticket at a given price, whether that is 10% more than face value, 15% more, 20% more or whatever. Of course, the problem with introducing the 10% rule that was proposed in the private Member’s Bill is that if it is okay for the first person to sell the ticket for 10% more, what about the owner who has already paid 10% more for it? Are they then stuck with being able to sell it only at that price, or can they sell it for an additional 10%? The idea is just ridiculous.
My hon. Friend the Member for Hove (Mike Weatherley) made a point about bands wanting to target a certain sector. Let us not beat about the bush. What the proponents of controlling the secondary market seem to be suggesting is that that target audience is somehow those who are of lesser means—those who cannot afford to pay for a ticket in the open market. If bands are really committed to helping those of lesser means, there are many ways they can do so. What is to stop bands, on the day of the concert, from letting a certain number of people—the genuine fans—in for free? Those fans would be the people who were prepared to queue to see the band for free. The top bands, and middle-level and lower bands, could still get their money by selling the rest of the tickets at higher prices. They would still get as much as they ever would have, and they would be able to reward those fans of lesser means. I will not call those people “real” fans, however, because if someone is prepared to pay an inflated price, they are just as much of a real fan as someone who is prepared to queue throughout the night to see a particular band. I look forward to hearing what my hon. Friend the Minister has to say.
Clive Efford (Eltham) (Lab)
It is a pleasure to take part in this debate under your chairmanship, Mr Crausby. I start by paying tribute to my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). She has been a tireless campaigner on the matter and is determined to protect the consumer, who is frequently ripped off by people exploiting the secondary ticketing market.
We need to get one or two things clear at the start. No one is suggesting that people should not be able to resell their tickets if they have a legitimate reason to do so, such as if they are unable to attend an event. We have all been in similar situations. The viagogo figure of 50% of tickets being sold for their face value or less arises because many people use the secondary ticketing market to try to minimise their losses when they cannot attend events. They did not necessarily buy tickets with the intention of making a profit and fail to sell them on.
We must have a robust secondary ticketing market that is properly regulated and that gives consumers protection. The secondary ticketing market must also allow organisers to monitor what is going on. The hon. Member for Shipley (Philip Davies) said that if somebody buys a ticket, they own the rights to it and can do what they like with it, but that is not true. When someone buys a ticket, they enter into a contract with the organiser. In many instances, the organiser makes stipulations regarding the selling on of tickets, which must be honoured. The ticketing market must be regulated and provide that information so that organisers can check ticket details at the point of sale. Let us face it; there is no other form of retail in which a consumer cannot examine the full details of a product. Rugby union made a challenge against viagogo on that basis, to try to secure access to such information.
We must protect the consumer against organised gangs of touts. The hon. Members for High Peak (Andrew Bingham), for Bury North (Mr Nuttall) and for Shipley made passionate speeches in favour of the free market. I have had various descriptions of redistribution of wealth thrust at me, but that given by the hon. Member for Shipley was a new one on me. He did not mention the link between crime and many instances in which people hoover up large numbers of tickets and sell them on. Presumably, he sees bank robbery as a form of redistribution of wealth and considers any form of crime that takes from the rich and gives to the poor to be justifiable in terms of the free market.
At the moment, 14 sets of tickets for the rugby world cup are available on the viagogo site. Tickets for that event will not even go on sale until autumn of next year, and the tournament will take place a year after that. When people do not even own those tickets yet, how can they be offering them for sale? The tickets on offer range from £86 to £10,000, and the two £10,000 tickets carry a £3,000 surcharge to cover the ticket guarantee and customer service. I would have thought that that was well and truly covered in the £10,000 price. What sort of extra cover could anyone need from viagogo to get a ticket guarantee? I would expect that to be part of the deal, but it is obviously not. People who use such sites are subject to some dubious additional charges, which is another area of concern.
The police inform us that touts are often linked to criminal gangs, and touting is estimated to raise some £40 million a year for organised criminal networks. The report “Ticket Crime: Problem Profile” published by the Metropolitan police in February 2013 states:
“Intelligence suggests that OCNs engaged in ticket crime have links to other organised crime, including the importation and production of drugs, as well as the smuggling of firearms and money laundering.”
We have heard impassioned pleas for a free market that facilitates such criminal activity, which is totally irresponsible and unjustifiable. Criminal gangs are well equipped, as my hon. Friend has set out, to hoover up tickets through networks of computers, botnets and so on ahead of genuine fans—the hon. Member for Shipley is no doubt wriggling in his seat at the mention of those words—whom they will force to pay extortionately high prices for those tickets.
I wrote to the Minister to ask that the rugby world cup, like the 2012 Olympics and Paralympics, be given a specific designation as an event of national significance to protect rugby fans. The organisers of the rugby world cup have priced their tickets to make them accessible to a range of fans, and they want to be able to resell returned tickets at face value through their own ticketing regime and reimburse the original purchasers. They want fans to be able to buy tickets at affordable prices so that a good cross-section of our communities and sports fans attend the events. What is wrong with that? Inevitably, however, criminal organisations and people who, even if they are not involved in criminal gangs, attempt to avoid paying tax on the profits that they earn from reselling tickets will buy tickets from under the noses of the fans. In so doing, they will completely undermine the ticketing policy that we, as politicians, have demanded of the England rugby world cup 2015 to try to ensure that tickets are accessible.
In my letter to the Minister, I asked for co-operation across the House to pass legislation to protect rugby fans from such exploitation. In her response, she mentions a consultation by the previous Government on ticketing. She states that the responses were broadly in line with the findings of the report by the Culture, Media and Sport Committee in 2008, and says that the consultation found that the biggest issue with regard to ticket resale concerned the practice of purchasing large numbers of tickets with the sole intention of releasing them back into the secondary market. That is exactly the point that we were raising, and we did not need it to be reiterated. She went on to say that the Department had looked at the Select Committee findings and the conclusions of the previous Government, and that it was broadly in agreement.
Time has moved on, and the Metropolitan police report that I have referred to states:
“The absence of a regulatory or legislative framework (apart from designated football matches) enables fraud, unscrupulous practices and a lack of transparency. This clearly places the public at risk. This matter was last considered by a Culture, Media and Sport select committee report in 2007.”
I think that report was actually in 2008. The Metropolitan police report continues:
“It is noted that, since then, the Internet has grown exponentially providing even more opportunities for fraudsters and unauthorised sellers to exploit.”
The Metropolitan police force has conducted a serious study into this area of operation since the 2012 Olympics and since the Select Committee’s report, and it has reached the conclusion that something needs to happen. The Metropolitan police report later states that there is a “lack of legislation outlawing” the practice.
In 2005, the then shadow Minister, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), who became the Minister for Sport and the Olympics, said that ticket touting had a “knock-on effect” on the availability of tickets for real fans, and that
“ticket touting is now part of a vast organised criminal business.”—[Official Report, Standing Committee D, 18 October 2005; c. 101.]
When the Government were in opposition, they put forward exactly the same arguments as we are making today. Those arguments apply even more so now with the advancement of the secondary ticketing market on the internet.
I welcome the Minister’s offer of a meeting to discuss the issue. We can wait for legislation—I am sure that we will have detailed discussions about secondary ticketing market regulation when the consumer protection Bill is introduced—but when we meet, will the Minister guarantee that we will sit down and talk about how we will designate the rugby union world cup 2015 in order to protect fans from being exploited in the secondary ticketing market on the internet?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
It is a great pleasure to serve under your chairmanship, Mr Crausby. I would like to start by telling the hon. Member for Washington and Sunderland West (Mrs Hodgson) that I too was a Take That fan, although perhaps not first generation. I congratulate her on her very good musical taste and thank her for securing this debate. I also thank my hon. Friends the Members for Shipley (Philip Davies), for Hove (Mike Weatherley), for High Peak (Andrew Bingham) and for Bury North (Mr Nuttall), as well as the shadow Minister, the hon. Member for Eltham (Clive Efford), for their important contributions, which I have listened to carefully.
I welcome the opportunity to discuss ticket abuse, which is important to my Department, and I would like to assure the hon. Lady that the Government take the issue seriously and keep it under review. My officials have had lengthy discussions with the organisers of the rugby world cup—who have been repeatedly mentioned by Members today—and with other organisers of various events. We are aware of the concerns that the hon. Lady and others have highlighted today.
Although the Government have no plans to introduce new regulations on the ticketing and events market, we continue to encourage improvements so that all customers have an opportunity to purchase tickets and can do so in a secure, safe and proper environment. We believe that it is for event organisers, together with the professional ticketing organisations, to determine suitable arrangements for ticket sales to their various events. That is why my officials have had extensive discussions with both the event organisers and the ticketing organisations such as Ticketmaster.
Where the Government differ from some of the opinions expressed today is in the belief that the best way to achieve improvements is through legislation. Our view is that the best way to do that is by building effective safeguards into the ticketing processes. For example, at a meeting last month with Ticketmaster, which is the ticketing partner for the rugby world cup, officials had a detailed briefing on the options available to event organisers. Options include using barcoding, having named tickets, staggering the release of tickets, and rewarding fans with a history of support. I note that tickets for the ever-popular Glastonbury festival, for example, are managed very effectively in that way. I am pleased to learn that the rugby world cup organisers have already decided to sell 500,000 of the 2.3 million tickets to members and clubs through the Rugby Football Union. That will ensure that tickets really do go into the hands of genuine fans.
The question of ticket re-sale is interesting and important. There are, of course, genuine reasons why someone might wish to re-sell their ticket—for example, if their team does not qualify for the finals. In such an instance, we would look to the event organisers to offer an official platform to return or re-sell the ticket. That would have the added benefit, which I believe was mentioned by my hon. Friend the Member for Shipley, of offering to fans a last minute opportunity to buy tickets at face value. That proved to be a successful way of ensuring that fans could safely buy and sell tickets for the 2012 Olympic and Paralympic games. I understand that the rugby world cup will also have an official re-sale mechanism in place—the shadow Minister asked about that a few moments ago.
We must recognise above all that there is a legitimate market. People are willing to pay above the market value of a ticket to attend an event. Others have genuine reasons to sell their tickets. I have listened carefully to everyone, but we do not want to criminalise fans, and we must not. Successive Governments and Select Committees have looked into the market in great detail and concluded that events organisers, promoters and ticket agents need to find solutions to ticketing and access to their events. Members will be aware that the Government made an exception in producing legislation for the London 2012 Olympic and Paralympic games because that was a requirement of the bid. The hon. Lady conceded that point.
Operation Podium has also been mentioned. The report on that operation clearly sets out that, even where legislation exists—such as for the re-sale of football tickets—it does not necessarily prevent the secondary market from operating. The hon. Lady raised the issue of the football tickets loophole. I will certainly raise that issue with the football authorities. I know that many season tickets take the form of electronic cards that are quite difficult to sell on for individual matches, which I think helps. I am happy to take that issue further. The Home Office is in charge of the legislation, so it would decide whether there is any risk to public order. I am sure that it will keep an eye on the issue and act accordingly.
Although further regulations might act as a deterrent for some, the regulatory burden imposed by stronger regulations is one that local authorities and police forces can ill afford to bear. The Government have made a commitment to reduce regulation and will only introduce new regulation as a last resort. We believe that the lightest practical regulatory burden is the right approach, particularly as powers exist to prevent criminal activity and unauthorised re-sale. Local authorities have powers to prevent unlicensed trading in the streets around venues under the Local Government (Miscellaneous Provisions) Act 1982, and fraudulent activity is already a criminal offence under the Fraud Act 2006. The police have had some successes in tackling such activity, but some of it occurs abroad where our powers of enforcement do not extend, unfortunately.
The key aim must be to reduce fraud by carefully educating consumers about the risks they take in using unofficial marketplaces. Removing the ability for consumers to buy tickets legitimately will ultimately drive demand to unauthorised websites, which are much harder to police. The Government have previously stated that unless there is proper evidence of market failure, there is no need for us to take action. We still believe that to be the case, but we will keep the position under careful review.