Consumer Rights Bill

Jo Swinson Excerpts

Monday 9th March 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I beg to move, That this House agrees with Lords amendment 12J.

[Mr Speaker]

With this it will be convenient to debate the following:

Lords amendments 12K to 12P.

Lords amendment 12Q and amendment (a) thereto.

Lords amendments 12R and 12S.

[Jo Swinson]

It is a veritable alphabet soup of amendments, Mr Speaker.

On 24 February in the other place, the Government agreed with amendments tabled by Lord Moynihan to introduce light-touch regulation of the online secondary ticketing market, alongside a statutory review of the market. The Bill has therefore returned to us for further consideration. It sets out a simple, modern framework of consumer rights that will promote growth through confident consumers driving innovation and more competitive markets. Consumers, knowing their rights are protected if things go wrong, will have greater confidence to take up new products and switch suppliers, which will help to create a competitive and thriving economy.

The Bill contains important new protections for consumers alongside measures to lower regulatory burdens for business. All this together will make markets work better, which is good for consumers, good for business and therefore good for growth. It will have an impact across all sectors of the economy and address many of the concerns we hear daily in our own constituencies.

Chapter 1 gives consumers a new right to a refund on faulty goods within 30 days. Chapter 2 protects consumers in law for the first time when they buy digital content, while schedule 5 means business will get more notice of routine inspections by trading standards. These represent an important package of reforms that businesses and consumer groups have been waiting for and preparing for. Once the Bill receives Royal Assent, we will alert business to the forthcoming changes well ahead of the Act coming into force.

Since December, there has been one outstanding issue to resolve before the Bill can be sent for Royal Assent—how to address issues in the online secondary ticketing market. This is the market where fans sell tickets they can no longer use to fans who missed out on tickets the first time round. It is a much safer and more convenient environment for fans to buy and sell tickets than dealing with shady individuals in the backstreets around venues.

There are some concerns, however, about how this relatively young market is working, as I explained when we last considered this issue in January. I know that many hon. Members have been following this area very closely, and I appreciate the keen interest in this issue. I know that several members of the all-party parliamentary group and of the Select Committee on Culture, Media and Sport are in their places today, and I pay tribute to their extensive work on this issue over a number of years.

The Competition and Markets Authority has also been active in this area. I warmly welcome its announcement last week that it has secured further protection for consumers. This work makes an important contribution to our parliamentary debates. To deal with them, there has been general agreement across the House on two central points: we agree on the importance of a safe and secure environment for fans to buy and sell tickets; and we agree on the need for event organisers, the marketplaces themselves and enforcers to play their part in combating fraudulent practices in the resale market.

We were not, however, able to support an amendment made by the House of Lords in November. While that amendment aimed to increase transparency in the market, we were concerned about privacy and unintended consequences for the secondary market. We did not think that that amendment would allow the secondary market to continue to thrive or to be a proportionate and appropriate response to concerns that had been raised. Since December, we have been working intensively with all the relevant stakeholders to see if a compromise could be reached—a compromise that allows fans to resell tickets they cannot use, but one that also tackles some of the known issues in the market.

[Philip Davies (Shipley) (Con)]

The Minister in the House of Lords said that the Government were accepting these amendments on the basis that people would still be able to sell on their tickets at any price they could command, and that the sports bodies concerned could not blacklist anybody who decided to do that. Will the Minister confirm that that is the Government’s position and the basis on which they are accepting the amendments?

[Jo Swinson]

I am certainly happy to confirm that position. There is already protection in the unfair trading regulations, and any unfair terms can be challenged in law, so they should not be included. There would be many circumstances in which the terms surrounding the cancellation of ticket reselling would be deemed to be unfair. My only caveat would be that, in some circumstances, such terms might be appropriate. If, for example, a particular category of ticket aimed at a particular sector such as a youth audience were sold at a discount and it was important to increase access to such events for a particular group, some restrictions on resale could be justified and the terms deemed to be fair. I hope that my hon. Friend the Member for Shipley (Philip Davies) will reassured by what I have said.

On 24 February, the other place agreed to add provisions to the Bill to protect consumers in the secondary ticket market. Those addressed the concerns I raised during our last debate and, importantly, they achieved cross-party welcome and support. The provisions cover four main issues. First, they put on a statutory basis the review that I announced here on 12 January. They also give more details on what the review will cover and how it will be conducted. It will be a full review of consumer protection measures in the secondary ticketing market.

As I explained during our last debate, this will be an independent review and it will be presented to Parliament. The review will start this summer and be presented to Parliament within a year of the duty coming into force. The review will look at the current law, including any new provisions, and assess how best to protect consumers. It will be an invaluable opportunity to gather evidence on how the market works and how consumers can best be protected when operating within it.

Secondly, there is a requirement that online ticketing marketplaces report criminal activity on their sites. Where they are aware of such activity—for example, fraud—they must report it to the police and the event organiser. This new requirement addresses an issue many hon. Members raised during the Bill’s passage. There is criminal activity and fraud in this market, as there can be in any market, and we should be concerned about that.

[Philip Davies]

The Minister is being typically kind in giving way. What measures exist to prevent people from setting up online sites offshore, and how would the law apply to an offshore internet site that was selling on tickets in a secondary market?

[Jo Swinson]

The hon. Gentleman has identified challenges that exist in regulation of all kinds that applies to the internet and to foreign sites and companies. I do not think that those challenges can be the basis for an argument against trying to make the market fairer. We have built a consensus with the key players in the industry, and have arrived at proposals that they believe to be workable. We have a secondary ticketing market that works very successfully for many consumers in this country, and because there are existing, established providers, it is unlikely that there will be a sudden exodus of tickets to sites abroad. Consumers will also be aware of the protections from which they benefit when using sites in the United Kingdom. The legislation will cover sites with which they are already familiar.

There is no benefit in making crimes “doubly” illegal, but it is important for us to improve reporting and enforcement, and the new requirement to report fraud will help in that regard.

The final two changes that we are making address the issues of transparency and consumer protection directly. To improve transparency, those who sell tickets online must give buyers some basic information. That information, when applicable, consists of the face value of the ticket, the seat number, and any restrictions relating to the person who can use the ticket. When those in the secondary market, event organisers or certain other connected persons are selling the tickets themselves, they must make that clear. The provision is complementary to, and supplements, existing law. It ensures that buyers will be given some of the most important information that they will need in order to make an informed choice.

Crucially, the list of information that must be provided does not include the name of the individual seller, so individual consumers will not have to give their names when they sell online. As was pointed out when we considered the earlier amendments in January, that is an important way of protecting sellers from identity theft. We are providing a finite list of the most important pieces of information that a consumer will need to make an informed purchasing decision, thus ensuring that there is compliance with relevant EU law.

I know that some Members—including the hon. Member for Shipley (Philip Davies)—fear that the new information will allow event organisers to cancel tickets or blacklist sellers. That might, of course, be unfair on fans, and give those event organisers unfair control of the market. We share those Members’ concern, which is why our provisions build in consumer safeguards. An event organiser will not be able to cancel a ticket or blacklist a seller merely because the ticket is resold or offered for resale, unless there is a term in the original sales contract that allows for that, and, perhaps more important, the term itself is fair. Terms that prohibit resale are not always fair, and those that are not fair do not bind the consumer. Similarly, terms that seek to prohibit resale at or above a particular price are not always fair, and not always binding on the consumer.

The combination of transparency and consumer safeguards will allow the secondary market to flourish. It will ensure that no one, including event organisers, has a monopoly on resales, or an unfettered ability to set prices in the secondary market. The new system of light-touch regulation will make buyers and sellers confident about using the market. It will make the market more dynamic, and will benefit consumers further by creating competition in relation to price and quality of service. The review that I mentioned earlier will ensure that that outcome materialises in practice. If other issues arise, or if the new legislation has any unintended consequences, the review will pick that up.

The hon. Member for Shipley has shown great interest in the Bill, and has brought a great deal of energy to our debates.

[Philip Davies]

Is that a compliment?

[Jo Swinson]

It is indeed a compliment, and I hope that the hon. Gentleman takes it as one.

If the hon. Gentleman’s amendment were passed, chapter 3B would cease to apply two years after coming into force. The Government share his fear that regulation of the resale market could threaten the current online ticket marketplaces. That is why chapter 3B makes it clear that tickets cannot be cancelled or their sellers blacklisted merely because the tickets are offered for resale, unless certain strict conditions are met. The consumer protection that amendment 12Q seeks to introduce is already part of these provisions. Striking this down after two years would neither help nor protect consumers.

[Philip Davies]

The Government have set great store by the review they are going to carry out after the election and after the legislation has been introduced. Surely a sunset clause of two years will give that review much more power, because it will mean that by the end of the review the Government will have to make specific proposals to implement its recommendations, rather than just a review taking place and dying?

--- Later in debate ---

[Jo Swinson]

My hon. Friend clearly takes that view. However, I think that two years after the legislation has come into force is not very long at all. It would be very shortly after the review had concluded and the Government had issued their response. Indeed this would already have pre-empted the outcome of the review by saying it should be sunsetted, because if the review finds that the new provisions are working well, it will be required to take action to make that continue. The review might recommend removal of the provisions, but in that scenario we would also want the benefit of the advice on the best timing in which to do so, rather than some arbitrary date being imposed. However, what I would say to reassure my hon. Friend is that if such action was required as a result of the review, the Government could use primary legislation to repeal chapter 3B without needing a sunset clause.

Finally on amendment 12Q, we should take a step back and look at how it could impact on the market. I am sure I do not need to remind this House of the disruption caused by changing the law too often. Changes and reforms are necessary and important, but there are costs to business in implementing a new regime, and to have it repealed wholesale after two years would incur significant costs.

We must also consider the major events we host in this country. Amendment 12Q would mean that fans of some such events benefit from the new regime, but others do not. For example, fans buying and selling tickets for events such as the world athletics championship in 2017, possibly the biggest athletics event we will have hosted since the Olympics, would lose out. That would not be fair on those fans.

In conclusion, we believe the provisions agreed in the other place create a proportionate, light-touch regime to protect consumers and the secondary market. I encourage Members to support them and allow this important Bill to move to Royal Assent.

[Ian Murray (Edinburgh South) (Lab)]

I am delighted that this issue has now come back to this place, as we have always believed that the Consumer Rights Bill gives an opportunity to provide real protection against rip-off practices, particularly in the secondary ticketing market.

We all know that healthy, fair and competitive markets are vital to building an economy that works for both consumers and businesses. We also know that well-informed consumers make for better customers and better-informed citizens get better outcomes in dealing with both the public and private sector. Ticket touting is a classic example of a market where a group of traders are colluding to restrict supply and so push up prices, ripping off consumers by overcharging them and as a result shattering the dreams of many fans. We have argued this throughout the passage of the Bill and, while we are pleased that Ministers are now in agreement, they have been dragged here kicking and screaming to make these changes.

I was delighted that in the last sentence of her speech the Minister agreed with the Lords amendments, but it has taken her three years to do so. That sums up this Administration. They rail against good ideas from Opposition Members, charities, non-governmental organisations, trade bodies, trade unions, the public and others, and then they are eventually embarrassed into having to bring forward the very provisions they have railed against. We have witnessed that with regularity, first on allowing the Groceries Code Adjudicator to fine people, and also on giving tied landlords a better deal with pubcos and better enforcement of the national minimum wage to name just a few, and they even had to be dragged kicking and screaming to do something about zero-hours contracts.

Now we have the secondary ticketing issue, where the Minister and the Government are arguing against their views of just a few weeks ago. On 21 January 2011 the Culture Secretary told Parliament:

“Ticket resellers act like classic entrepreneurs”

and that concerns about touting represented

“the chattering middle classes and champagne socialists”.—[Official Report, 21 January 2011; Vol. 521, c. 1186, 1187.]

That is obviously not the case now.

On Friday 6 February 2015 the Daily Mirror quoted the Culture Secretary as saying unscrupulous websites have every right to hoover up sought-after tickets for football matches and pop concerts and flog them at five or 10 times the asking price. He said:

“There’s nothing wrong with a healthy second market”

and went on to say

“I don't have any problem with it.”

He obviously does now.

--- Later in debate ---

[Mike Weatherley]

I thank the shadow Minister for his intervention. The review must be balanced. Obviously, I am pushing for more regulation, because I feel that the free market has fallen down, but we should consider experiences around the world. There are states in America that have repealed secondary ticketing laws, and we need to look at why. Was it because the legislation was badly drafted? Norway and Denmark have laws under which tickets cannot be sold above face value, but they have never been enacted. Is that because, as someone mentioned, trading standards teams do not have enough teeth to implement such measures? All of that needs to be in the review; that is absolutely essential. There are so many aspects to the review that it will be quite an exciting one.

To summarise, and to misquote E.M. Forster on democracy, two cheers for the amendment, but not quite three. However, I am really pleased that we will enact this law before the end of this Parliament, and before I step down. This is very much a good step forward.

[Jo Swinson]

I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) and my hon. Friend the Member for Hove (Mike Weatherley) on their tireless work on this issue. They should be pleased with the outcome that they have managed to achieve. I want to address two points that came up in the debate. The first was the question, “Why now?”, and the second was about the CMA.

On the question of why now, my hon. Friend the Member for Shipley (Philip Davies) seemed to suggest that we had voted for something and will now be voting against it, or some such thing. The amendments that we are considering differ in two respects from the ones that we considered in January. First, on privacy, the amendments in January stipulated that the name of those selling tickets would have to be a piece of information that was made transparent. We thought that there were privacy concerns about that. Secondly, there were concerns about compliance with EU law—the technical standards directive—and that could unfortunately have rendered all the provisions unenforceable. That was because of the de facto price cap in the amendment put forward by the hon. Member for Washington and Sunderland West. For those reasons, although we understood the concerns brought forward, we could not accept the amendments in January. Of course, those concerns have now been addressed; that is why we are able to accept the Lords amendments today.

Last week’s announcement by the CMA has been mentioned. The CMA in no way sought to usurp the work done in this House. It had done a long-running piece of enforcement work against four sites. The announcement covered the transparency elements of amendment 12J, but the amendment puts things on a statutory footing and should be very welcome.

The CMA does, of course, have significant power. To address the concern raised by my hon. Friend the Member for Shipley, it would be able to stop an organiser cancelling tickets. The CMA has shown that it is willing to act in this market should there be any concern that tickets were being cancelled, and I am sure that it would be happy to do so in future. On the international point, as the provisions apply to marketplaces and sellers targeting the UK, enforcement action can take place elsewhere. Indeed, the CMA recently pursued successful enforcement action against several websites, including viagogo, which is of course based in Switzerland. That shows that we have the enforcement to back up these consumer protections, which are proportionate, and which do not give rise to the privacy concerns that we had before. They will help to make sure that the secondary market can genuinely thrive and work better for consumers.

Question put, That this House agrees with Lords amendment 12J.