Ticket Abuse

Mike Weatherley Excerpts

Tuesday 21st January 2014 Westminster Hall

[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.

[Mr Chope]

If there is great demand, is not the best thing to sell tickets by auction? They could all be launched for sale by auction, and that would find the market-clearing price.

[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.