Digital Economy Bill
Debate between John Penrose and Damian CollinsMonday 28th November 2016
(8 years ago)
Commons ChamberRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 28 November 2016 - (28 Nov 2016)
Damian Collins
On behalf of the Select Committee, I am grateful to the hon. Lady for her words. I was certainly shocked by some of the things I heard in that Committee hearing.
John Penrose
I want to ask the Chair of the Select Committee whether, in among the penetrating questioning that we have heard about, anyone on the Select Committee asked the people they were interviewing why they were not installing any of the safeguards that are already available. They are already being successfully used in sporting and entertainment events. If those safeguards already exist, why should we be expected to introduce a red tape-heavy legislative solution to a problem that the industry could solve for itself? Indeed, it could have solved it several years ago had it cared to do so.
Damian Collins
Those issues were covered in the Select Committee hearing; they are there in the transcript for all to see. Some venues have introduced direct selling technology, and it can work. However, as my right hon. Friend the Member for Maldon said, it would be unacceptable to many consumers if our blanket response to this crisis in the ticketing industry was to say to the industry, “Solve it yourself.” That would place large costs and burdens on the venues, and it would be particularly unfair on the smaller ones. This problem affects not only the blockbuster events at the O2 or the Royal Albert Hall but events at small venues all around the country. I even saw tickets for a comedy event next year at the Winter Gardens in Margate being sold at three or four times their face value on the secondary market. This is affecting all sorts of venues.
More seriously, however, it is not in the interests of some of the primary ticketing sites to report the problem, because they own the secondary sites that are making the massive profits. The profit growth in the secondary market stands at between 30% and 40% a year. It is true that at the moment more tickets are sold through the primary market—through companies such as Ticketmaster —but very large profits are being made in the secondary market.
John Penrose
I completely agree with my hon. Friend on the diagnosis of the problem. I think everyone here shares the sense of injustice and iniquity that he is describing. My concern, however, is that it is not just the punters who go to see these events who are being affected. The talent—the musicians, the actors and the sportsmen and women—are also losing out because they are getting less money from the initial ticket sale when the ticket is sold on at an inflated price. They and the punters could all win if more of that value could be captured for the talent and if the punters were able to pay less. Both sides therefore have a huge interest in cutting out the middle man, and I do not understand why they are not doing it.
Damian Collins
My hon. Friend is right to say that it is in the interests of many different stakeholders in the industry to do that, but at the moment it is not happening across the board. Some of the bigger artists and events have been able to introduce these measures, but it has been difficult to do it uniformly.
We must ask ourselves why the primary ticketing sites do not report the mass use of bots to the authorities. Why did they not report it as suspicious behaviour? It would be easy for them to do so. We heard in evidence to the Committee that it is so easy to do that the primary sites’ biggest customers often have favourable terms of trade. Their own secondary ticketing sites certainly have favourable terms of trade with people who are bulk selling vast numbers of tickets. It is easy to identify who they are, and it would be easy for a primary site to report them if it became suspicious because they were selling thousands of tickets only minutes after they had gone on sale on the primary ticketing site. If they are able to do that so quickly, they must be using bot technology to pervert the market. It does not get reported, however, and we must ask ourselves why that is. Is it because they are making too much money?
Football Clubs in Administration
Debate between John Penrose and Damian Collins
Damian Collins
I was at the Select Committee when Mr Clarke gave evidence. He also stated that he could not find a moral case for keeping the football creditors rule. Nevertheless, it remains the position of the Football League that it should stay. Does the Minister, like me, find that regrettable?
John Penrose
If the football authorities find it unacceptable and regrettable, the Government probably do as well. This is something for football governance to take on first. The Government will seek not to intervene if football puts its own house in order. Mr Clarke has made his position very clear, and that should be a very powerful voice.
The football authorities deserve credit for the rules they have introduced in recent years in the areas of financial regulation and club ownership. There are now an early warning system with HMRC in relation to tax returns, transfer embargoes that help curb club spending, new salary control measures in the lowest two leagues, a new means and abilities test that requires proof of funds from prospective owners, and a strengthened owners and directors test. It is welcome that in May, all 72 Football League clubs voted in principle to adopt UEFA’s new financial fair play rules from 2013, which will require clubs to spend only what they bring in. The Government obviously support those moves. Of course, situations such as that in Plymouth demonstrate how much more may need to be done. They also demonstrate that prevention is better than cure. It is far better to avoid going into a company voluntary agreement or insolvency if possible.
We believe it is for the football authorities to continue to challenge themselves to see whether they should tighten their rules further to ensure that clubs do not fall into administration in the first place, in precisely the way I have just mentioned. Equally, the clubs have to take greater responsibility. Supporters should not have to bail out the club because of bad financial management by owners and directors, as both local MPs said.
The stark reality is that for any company or organisation, not least a football club, emerging successfully from administration is likely to be painful and difficult. The focus must be on doing everything possible to avoid clubs getting into such problems in the first place. The Government’s hope and expectation is that as part of the wider process of the Select Committee inquiry’s recommendations, the football authorities will take steps to deal with such challenges themselves. If they do not, all avenues of course remain open to the Government, and we are prepared to look closely at how best to make those changes.