Edinburgh Festivals: Cultural and Economic Contribution

Caroline Dinenage Excerpts

Tuesday 8th October 2024 Westminster Hall

[Dame Caroline Dinenage (Gosport) (Con)]

It is a huge pleasure to serve under your chairmanship, Mr Efford. I congratulate the hon. Member for Edinburgh East and Musselburgh (Chris Murray) on securing the debate and on the excellent way in which he championed his city. As someone who has visited the festivals during August many, many times over the years, he has made a fine case for the value of them and makes me want to go back again.

Anyone who has visited Edinburgh at any time of the year will say what a wonderful, vibrant and historic city it is. I was not at all surprised to find out that of all the cities in the UK, Edinburgh receives the highest proportion of international visitors to the UK: 68% of the total. The challenge for policymakers is how to grasp the strong pull factors and turn them into gold dust that benefits not only Edinburgh but the rest of Scotland and indeed the rest of the UK. The festivals play a massive part in that.

How can we best use our cultural heritage to further our soft power abroad and promote prosperity at home? The 11 major festivals that comprise the Edinburgh festival are a perfect tool to do it. The international festival, the Fringe and the tattoo always get the limelight, but of course 11 festivals make up the complement. The Edinburgh international book festival, which the hon. Gentleman mentioned, remains the biggest in the world, with more than 900 authors in attendance.

However, the reports that have been released by the festivals lay bare some of the significant challenges, including the rise in the cost of living accommodation and security expenses, and the costs are being exacerbated by the frustrating, restrictive and punitive bureaucracy that has been imposed on Edinburgh’s landlords by the Scottish Government. I also have concerns about the future of funding for acts at festivals such as the Fringe. Both those issues tie into the all-important question of how and why the Government should and could be stimulating cultural activity, specifically to develop artists, actors and creators.

This issue is too big for Edinburgh council to deal with alone: it has an impact on the whole of Scotland and the whole of the UK. In short, it is for all of us to work out how the various festivals can continue to play a role as the incubator—a sort of research and development department for world-class artistic talent—and a role in tourism, expanding the horizons of those who come along and see them. That is why, despite the fact that both culture and tourism are devolved, the previous Government spent £1 million supporting the festivals with their digital offer.

It is the talent that brings visitors in their hundreds of thousands. There were 700,000 unique visitors last year alone, and that number does not account for the many artists who require somewhere to live. They are the up-and-comers who are looking for their big break. They are young, not well off and looking for somewhere cheap to stay, but for many the heavy-handed licensing and prohibitive legislation around short-term lets is destroying any chance of their being put up for the night. Gone are those days when a well-meaning, friendly person who wanted to support aspiring artists could just give over their spare bedroom for a few weeks.

New regulations require landlords to be compliant with rigorous safety rules, fit and proper person tests and assurances that the let will not adversely affect the community. The measures have adversely impacted the availability of short-term lets, which is especially ironic considering the fact that 72% of locals say that the festivals make Edinburgh a better place to live. If my local city was inundated with people every year and I could not find a table to go out and eat, I am not sure whether I would feel the same way, but people do feel the benefit of the festivals.

I urge anyone with a stake in the future of Edinburgh festivals to engage with Edinburgh council’s consultation on the scheme, which closes on Monday. The Scottish Government would do well to review the 2022 regulation and ask themselves why they have decided to restrict access to one of our most successful cities and festival programmes at a time when the events are inevitably finding it more expensive and difficult to operate.

I hope the Minister will have a conversation with his counterpart in Holyrood and emphasise the benefits not just to Scotland but to the nation as a whole, and the need to cut through the bureaucracy and enable the market to work a lot more effectively. I am worried about the effect of the Scottish Government’s budget cut to Creative Scotland. The almost £700,000 fund was a vital resource for participants in the festivals. It was already extremely over-subscribed, so it is difficult to rationalise the decision by both the Scottish Government and Creative Scotland. Artists cannot rely on pots of money such as Phoebe Waller-Bridge’s “Keep it Fringe” fund. We need artists whose careers have started at the festivals to pay into support to help others coming up behind them, but we also need all the authorities to feed in and support them.

Festivals such as the Fringe are often the first big test for an emerging artist. They are a way for people to have the most amazing experiences, and the cultural contribution is second to none. They also bring the world and its cultural wonders to Scotland, whether that is through the Tattoo or the international festival. It is vital that the Scottish Government recognise the part that they can play, and I hope the Minister will do his bit to encourage co-operation with the festivals in future years.

Dynamic Ticket Pricing

Caroline Dinenage Excerpts

Tuesday 10th September 2024 Commons Chamber

[Dame Caroline Dinenage (Gosport) (Con)]

I welcome the Minister to his place and very much look forward to working with him to promote our world-class creative industries, including our music industry and all the other fantastic sectors that his Department promotes.

Today, I want to talk about music ticketing and recognise the remarkable circumstances that have provoked this debate. News of the Oasis reunion has dominated the news cycle for the last week or so, but some might say for all the wrong reasons. What should have been a moment to celebrate one of the UK’s most significant cultural exports—and the chance to revisit the music that, for many, me included, was the soundtrack to our youth—has morphed into a conversation about exploitative practices in the music industry that hurt fans and the grassroots sector. Some of the issues have been rumbling away for years. In fact, earlier this year, the Select Committee on Culture, Media and Sport published a report on grassroots music that outlined some of the major challenges facing the live music ecosystem and suggested some ways forward.

The Minister knows the facts. On 31 August, some 14 million people from 158 countries logged on to a digital queue to buy tickets to the Oasis Live 25 reunion tour, 15 years after the band broke up and 30 years on from their seminal first album, “Definitely Maybe”. Fans were locked in an online queue for up to 10 hours and, when many of them, it seemed almost at random, made it to the front of the queue, the tickets were in many cases more than double the price that had been advertised. The dynamic pricing mechanism employed by Oasis, their promoters and management via Ticketmaster served to increase the price of tickets in line with demand, but in reality it resulted in a kind of lucky dip game in which the price got worse and worse by no clear mechanism except the secret and opaque rules of a computer algorithm in the hands of Ticketmaster.

I should declare an interest: after four hours of queuing, I had become wistful about the halcyon days of real-life physical box offices, where we queued almost overnight to get our tickets, but at least we could see the queue in front of us and we knew how long we would have to wait.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Member for bringing this debate. She is right and many of my constituents experienced the issue that she mentions. We understand the economic principles of supply and demand, but we also understand the principle of price gouging. For those who believed they would be charged one price to have just a few moments to decide whether they would be prepared to pay double is unfair pressure. We must always encourage free trade, but we must also be mindful of consumer protection in Strangford, Gosport or any part of this United Kingdom of Great Britain and Northern Ireland.

[Dame Caroline Dinenage]

I could not have said it better myself—that is exactly what it is. We understand the laws of supply and demand, but we also understand the laws of transparency and fairness. What is more, once ticket purchasers were through to the payment screen, fans realised that they only had a very limited time to decide whether the hugely inflated prices were worth paying. Someone compared the ticket purchase after such a long wait to the dopamine rush of a gambler. The £150 to £400 price increase meant that the transaction was no longer a choice, but more of an impulse buy.

I have heard many people say that the dynamic pricing method is used effectively in other sectors, and that the technology is a perfect demonstration of the dynamism of a free market. Even within the music industry itself, there is dispute as to whether dynamic pricing has a place and is an acceptable way forward.

[Pete Wishart (Perth and Kinross-shire) (SNP)]

I congratulate the hon. Lady on securing the debate. I was hoping to secure a debate on the subject myself but she beat me to it. There seems to be an issue about who is to blame for all of this—no one is taking responsibility for the issue of dynamic pricing. Ticketmaster is blaming the management and artists, and they are blaming those who were promoting the events. As she is now the Chair of the Culture, Media and Sport Committee, will she look into this on behalf of the House and find out exactly why this has happened, with a view to having it stopped and outlawed entirely?

[Dame Caroline Dinenage]

I am very fortunate to have been re-elected as the Chair of the Culture, Media and Sport Committee, but we do not have any members of the Committee yet. Any decisions about what the Committee will look at will very much be a group decision jointly taken, but this is certainly something I will be putting forward. I know the Minister has already announced some consultation of his own.

To return to dynamic pricing and the laws of supply and demand, mentioned by the hon. Member for Strangford (Jim Shannon), this is something that is used across different marketplaces. Uber employs a smart dynamic pricing mechanism that adjusts the cost of journeys in line with changing variables, such as traffic and current rider-to-driver demand. Hotels and airlines are another market that uses dynamic pricing, but they are very different. If people are stuck at Waterloo station, as I sometimes am, an Uber is not the only option of travel and, when people go on holiday, multiple airlines offer flights to the same city and different hotel options, but when it comes to live music, particularly in cases such as this one, there is one artist and one opportunity to buy a ticket.

The imperfections of the dynamic pricing mechanism were obvious to anybody who attempted to buy a ticket on this occasion, but whatever the rights and wrongs of its suitability for music ticketing and this market place, the most important issue is that fans were not warned about the use of dynamic pricing before they entered the digital queue. Those are the faults that led the Competition and Markets Authority to open its investigation into this debacle. It meant that people had no idea how much a ticket would cost when they logged in. Many fans ended up paying at least double the original listing price of £148, so four standing tickets could cost an eye-watering £1,400 once service and order processing fees were included. The CMA says that it will investigate whether fans were given “clear and timely information”.

Any free market economist would call this a classic case of information asymmetry. There was certainly a lack of clarity over how high ticket prices might eventually go, with the additional chaos of a time limit putting pressure on fans to make an imminent decision about whether they were going to buy.

Ticketmaster claims that the dynamic pricing mechanism is the best way to deter ticket touts, the logic being that any tout buying tickets in bulk would increase demand and therefore see his or her prices and margins slashed. The Guardian has already said that secondary ticketing platforms are advertising more than 4,500 tickets for this tour already, including from one tout who claims to have at least 33 tickets for Cardiff, Wembley and Murrayfield listed, for a combined price of over £26,000.

I am glad that this summer the Government announced a consultation on the secondary ticketing market, where tickets are sold in bulk by touts who often use bots to scout for tickets at face value and sell them well beyond the market value, but will the Minister set out the parameters and timescales for the work? When will it happen and what is it likely to include? He has now announced that the investigation will be widened to consider dynamic pricing and what happened in the Oasis situation, so can we have a reassurance that the eye will not be taken off the ball of the original consultation that he announced in the summer?

There are so many aspects at play. This method of resale is also the culprit for a large amount of money lost to fraud, with Lloyd’s estimating that £1 million was lost to scammers during Taylor Swift’s Eras tour alone. Will the Minister tell me whether the secondary market consultation will include conversations with digital search engines that are signposting customers into the hands of touts and not doing enough to get them direct to principal sales sites?

There is scope for an entire primary market review and for ticketing to be reviewed on a much wider scale. The Oasis episode has opened the eyes of fans to potential anti-competitiveness within the industry. As complaints about the ticketing process began to flood in, Oasis said it was their management and promoters who had agreed a dynamic pricing strategy with Ticketmaster. But, of course, their three tour promoters all have links to Live Nation, Ticketmaster’s parent company and, in effect, they are all the same party. So that party is making money hand over fist through the system, which keeps everything under the Live Nation umbrella.

For a typical tour, a Live Nation subsidiary promoter might take 10% of the face value of a ticket. A service charge of perhaps a quarter of that face value will then be applied, and some of that money will be going to Live Nation-owned Ticketmaster. The venue will take a cut at this stage, which, in all likelihood, will be a Live Nation-owned venue, too, as it owns 28 festivals and venues UK-wide. The process is repeated at resale, if people go through Ticketmaster at a higher cost than before, leaving Live Nation with an even greater cut.

The Minister does not need to be a public intellectual to see that there is a real perverse incentive for Ticketmaster to see tickets in the hands of touts. He will know that the US Department of Justice has slapped Live Nation with a lawsuit, citing anti-competitive conduct, while it is now well established that the company has a near monopoly in the UK.

Dynamic pricing is quite an effective way of rewarding a near-monopoly, with no upper limit on ticket prices, meaning a greater cut for the parent company. The great sadness of all this is not only that the system is punishing the fans—in this case, those Oasis fans for whom the music was so totemic, so life changing back in the ‘90s—but that, to add insult to injury, there is no trickle down to the live music ecosystem, like the grassroots music venues that Oasis first played in while honing their skills, the venues that made them, such the Boardwalk in Manchester and King Tut’s in Glasgow.

Although Oasis have since announced further tour dates, tickets to new dates will be sold at face value via invitation-only ballot. I cannot help feeling that the fans who paid through the nose via dynamic pricing are going to feel very hard done by.

I encourage the Minister to look at ways to amplify fans’ voices within the live music ecosystem. He might start by responding to the Culture, Media and Sport Committee’s report into grassroots music, which I have already mentioned. It was published in May. I know that we have had the small matter of a general election since then, but I would like to know when the response is likely to be forthcoming and whether the Government are minded to accept its recommendations. The recommendations include one for a fan-led review of music—something like the fan-led review of football that was led by my still friend, my former hon. Friend, the former Member for Chatham and Aylesford, Tracey Crouch—to look at how the music pyramid functions and how the money trickles down from the big players to those small venues and fledgling songwriters and artists.

The recommendations included a targeted VAT cut, which to grassroots venues would have represented a final hour of salvation in a sector that is widely accepted to be in crisis, and a live music levy, which would take a small proportion of the service fee from the pockets of the big venues and bring them right down to the struggling businesses at the grassroots. What is most pertinent to me about all this is that, while many of the 28 venues and festivals in which Live Nation owns a stake are flourishing, grassroots music venues are closing at a rate of two a week.

I am sure that the Minister is aware that, of the 34 music venues in which Oasis played on their first tour back in 1994, only 11 are still open today. And those venues are so crucial. They are absolutely fundamental to incubate our world-renowned talent. They are the R&D department for the music industry. They are a massive feeder into something that is fundamental to the UK economy and crucial to our soft power around the world. In a ticketing market gone wrong, there might have been a gram of comfort to some of the fans paying through the nose for their ticket if they knew that, in paying it, some of the money was protecting grassroots music venues in their communities and germinating the Oasis of the future.

I know that, like me, the Minister wants nothing more than to see our musical talent continue to thrill fans both at home and around the world, but behind every great act is a chance performance at a low-capacity venue that is struggling to keep the lights on, that is at financial breaking point, and that is a hair’s breadth away from closing its doors.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Minister.