Consumer Rights Bill

Mike Weatherley Excerpts

Monday 9th March 2015 Commons Chamber

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

As many in the House are aware, I have been interested in the secondary ticketing market for many years now, and, alongside the hon. Member for Hove (Mike Weatherley), I have co-chaired the all-party parliamentary group on ticket abuse, the report of which spearheaded the former amendments to those we are debating today.

It is my long-standing belief that for a long time things have needed to change in the sector, as more and more fans are being ripped off and exploited by unscrupulous touts, and ordinary people are being priced out of seeing the artists, shows, or teams that they love. The full extent of the problem was clear last week when the Competition and Markets Authority, after consulting the major ticket re-sellers, published a new code of conduct—an agreement for which the CMA was happy to take all the credit, somewhat ignoring all the hard work and campaigning over many years of Members, peers and other industry bodies, and on which we are now legislating.

However, that small gripe aside, on the very same day that the new code of conduct was announced, a person could go on some of those companies’ websites and find tickets, guaranteed, for the upcoming boxing match between Floyd Mayweather and Manny Pacquiao in Las Vegas. On one site, the cheapest came in at just under £4,000, and the most expensive floor seats at more than £32,000. That was despite the fact that last week there were no official tickets yet on sale and original ticket prices had not even been agreed. That is a ludicrous situation which leaves the public totally misinformed about the marketplace and serves only further to inflate prices when the tickets become available.

[Mike Weatherley (Hove) (Con)]

Does the hon. Lady agree that it was bizarre that the CMA came out with guidance only days before Parliament was debating the issue and passing laws in this House? It seemed almost to usurp what we are doing.

[Mrs Hodgson]

I totally agree. As I have mentioned, I was surprised that in the press coverage the CMA was taking all the credit for the new measures given that Parliament has been pushing for this in both Houses. As the new authority, which is replacing the OFT, has now agreed with Parliament, the CMA should perhaps have mentioned that fact in some of its press coverage.

Sadly, the example I have given is one of many hundreds of thousands that routinely happen every day. It is only through measures such as the Lords amendment that we can hope to tackle the worst excesses of the industry and put the genuine fans first.

Let me be clear that the argument and the fight have never been about stopping the resale of tickets. The legitimate resale of tickets is not the problem and those who have claimed that clamping down on ticket touts and increasing transparency will harm true fans know very little about the problems and even less about what needs to be done to address them. Greater transparency is never a problem for a market operating properly and it is only in the interests of illegal ticket touts to sit back and do nothing to change the law. Others say that this is a licence for event organisers to cancel tickets, but the amendment clearly sets out that event organisers cannot cancel tickets simply because they have been resold, and can do so only in very specific circumstances. I am glad that that safeguard is in the Bill.

The hon. Member for Shipley (Philip Davies) has tabled a characteristically unhelpful amendment that would insert a sunset clause for the provision—an act that is as misguided as it is obstructive. I know that the Opposition will vote against it and I am sure that the Government will too, as it is our intention to work on behalf of the fans and not the touts. Any further debate on that point gives it merit that it simply does not deserve.

Before I consider the specifics of the amendments proposed in the other place, let me praise Lord Moynihan for his diligent cross-party work and for succeeding in achieving such an important step towards strengthening the regulations in the sector. As a former Sports Minister, he knew first hand how pernicious the practice is. It has been an extremely productive experience working with him, as it has been with many other colleagues in both Houses who care just as passionately about the rights of fans as he, the hon. Member for Hove as my co-chair on the all-party group, the members of the all-party group and I do. I know that Lord Moynihan worked tirelessly over the last recess to secure a compromise with Ministers across two Departments—a feat few could accomplish—and event goers and fans across the country owe him a debt of gratitude for the amendment.

As has been said, the amendment will do three key things to help stop the exploitation of fans. First, it will boost transparency, as from the time the Bill is enacted, ticket resellers will have to provide a seat number, any restrictions or limits on the ticket and the original face value of the ticket to all those they hope to sell it to. That will give fans far more knowledge about what they are buying and will give event managers more information about the tickets that are being resold.

Secondly, the amendment will place a duty on ticket resellers to report criminal activity if they suspect it, making the enforcement of the law much more proactive and effective and discouraging the secondary market platforms from turning a blind eye and letting the worst excesses of these practices continue.

Finally and crucially, the amendment compels the Secretary of State to review measures relating to the industry in a report to Parliament after 12 months, and that is what I would like to use the remaining time to speak about. The improvements in the amendment are a crucial first step, but they do not solve all the problems we can see in the sector. The review process will be absolutely vital in taking representations from the industry and making proposals that can build on the legislation and get to the heart of what is wrong with how things operate.

There is much that needs to be considered in the review, but I shall limit myself to a couple of key points that must be investigated if we are ever properly to understand why the problem is so persistent and deep-rooted. The first is the speed at which secondary ticketing sites get access to tickets in the first place. Secondary ticketing platforms can have hundreds if not thousands of tickets on their sites and ready to be sold within minutes of their first going on general release and in some cases even before they have gone on sale. How can that happen without sophisticated software, such as bots, harvesting them, without certain so-called power sellers working alongside the platforms to get tickets on their behalf or without inside trading, such as behind-the-scenes deals in which premium tickets are not sold on the primary market but given straight to the secondary market to be sold at huge mark-ups?

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[Mrs Hodgson]

I agree. Sometimes they are following through on a fraudulent transaction and sometimes the listing is speculative, as they might try to get a ticket later and want to see how much they can sell it for.

Given that there is no lawful way to harvest large numbers of tickets and that behind-the-scenes deals are at best duplicitous and immoral, we must ask just how the situation can take place and continue. Further to that point, if the tickets showing on the system have not been acquired, how can the sellers guarantee their sale on their sites? An investigation of those guarantees must be central to the review, because if that approach is found to be misleading, it would directly go against consumer rights, which are of course the entire purpose of the Bill. One way the all-party group on ticket abuse thought of to solve that would be to publish the seller’s identity when reselling tickets. I am sure that that will also be considered in the review.

The duty under the new amendment to report criminal activity is welcome, but we must also ask why past instances of criminality have been so largely unreported in the sector, even when the secondary platforms have been the victims and have had to pay out large sums in compensation. Has that been seen simply as collateral damage? It cannot be a continued coincidence and questions must be asked in the review.

In conclusion, the review is crucial and much needed and will have to be handled carefully and expertly so that we understand how best further to protect the public. That is why the choice of chair is so important. The marketplace is so complicated that it will need somebody who understands it but who is fair minded enough to listen and engage with all parties while keeping the rights of the fans at the heart of the entire process. If I may be so bold as to venture a suggestion, I think that my all-party group co-chair, the hon. Member for Hove, would be an ideal candidate to take up the challenge after he leaves Parliament. I do not know what his plans are—he might be hoping to travel the world and have a normal life for a while—but I can think of no one better. Whoever is chosen, however, I am confident that they will ensure that the right questions are asked, the right leads are pursued and the right outcome is achieved so that at last we can be sure that the market will put fans first.

[Mike Weatherley]

It is an honour to follow my co-chair on the all-party group, the hon. Member for Washington and Sunderland West (Mrs Hodgson). The amendment is the culmination of four years of hard campaigning and it is a little ironic that we have only about two minutes to squeeze in all our comments. I will not go through all the points that have been made so admirably by my hon. Friend the Member for Shipley (Philip Davies) and the hon. Member for Washington and Sunderland West, as there is no point in doing so, other than to say that the bots have made the free market untenable and something needs to change.

I want to make two particular points. The first is about the review, which is crucial. I thought at first that that would be like kicking the issue into the long grass, as my hon. Friend the Member for Shipley said, but it is an essential part of the reforms. The critics of the reforms are screaming about the potential problems, as we have heard, whereas those who want more action are screaming that more should be done. That is a lot of shouting, but time will tell and the review, which will report in a relatively short period of time in parliamentary terms, will closely consider both claims and at last come up with a proper analysis and recommendations.

The legislation specifically states that terms and conditions need to be fair, and making sure that they are fair must be part of the review. The terms and conditions that event organisers attach to tickets are there to protect fans—not to take advantage of them, as my hon. Friend the Member for Shipley indicated they might be. Where fans have bought tickets for genuine use, and have a genuine reason for resale—that is, where they have bought tickets not just to make a profit—I am fully behind their ability to resell. I will make sure that that is a fundamental principle in the review. Equally, I will make sure that the insertion of “fair terms” in the amendment is not the secondary ticketing industry’s way of undermining all these changes to the law. I am pleased that groups such as the Sport and Recreation Alliance, the England and Wales Cricket Board and the Rugby Football Union are fully behind the amendments.

As with all compromises, neither side is fully happy with the solution, but on balance, this is a good step in the right direction. The review will be key. With this review, the UK, with its rich cultural heritage and world-leading position, will once again be the focus of world attention. I suspect that the review will act as a blueprint for many countries around the world—both those that have enacted secondary ticketing legislation, and those considering doing so.

[Ian Murray]

The hon. Gentleman has put so much effort into ensuring that we got to this point today. Will he, with his experience of the industry, say what he would like the conclusions of the review to look like? What questions should be asked to make sure that the secondary ticketing market works best for both consumers and businesses?

[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.

Consumer Rights Bill

Mike Weatherley Excerpts

Monday 12th January 2015 Commons Chamber

[Mrs Hodgson]

If the ticket clearly states that it is not for resale—that it is non-transferable—then that is part of the terms and conditions that it was sold under. In the new model that we are hoping to create, with a new level of transparency, there would be less need for that.

The reason event holders put it on their tickets is to try to do something about the murkiness and market failure that we see at the moment with the resale of tickets on the secondary market. Under our proposal, that need would not be there because there would be full transparency and people would be able to see who was reselling the tickets. There would be fewer abuses of the system so there would be less need to put “Not for resale” on tickets, because genuine fans would be able to resell to other genuine fans tickets for events they could no longer attend.

[Mike Weatherley (Hove) (Con)]

Does the hon. Lady agree with me and the Secretary of State for Culture, Media and Sport, who has said that, when a person wants to sell something, terms and conditions should be respected?

[Mrs Hodgson]

I agree that people should abide by terms and conditions. The fact that the lack of transparency allows platforms to resell against terms and conditions is certainly not in the interest of consumers.

If the Minister does not want to take my word or that of Members in the other place on why we need transparency, perhaps she will listen to those who are actually involved in our crucial cultural and live sector. As she may know, more than 85 prominent organisations and individuals signed a letter to The Independent on Sunday yesterday calling on her and the Government to adopt the proposal. Those signatories included UK Music, the voice of the live and recorded industry; the Sport and Recreation Alliance, the voice of sporting governing bodies in the UK; the Rugby Football Union; the Lawn Tennis Association; and the England and Wales Cricket Board. They have all gone to great lengths over the years to try to ensure that tickets reach the hands of grass-roots fans.

--- Later in debate ---

[Nic Dakin]

I must move on, as other Members want to speak.

Points made by Members on both sides of the House have reinforced what was said by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). We should be focusing on market failure, and the need to make the market operate well in the interests of performers, venues and consumers. I did not expect to speak in this debate, but I am doing so because constituents have knocked on my door and said that they consider the present system to be unfair and not in their interests, and I tend to agree with them. However, it is not only my constituents and me—and other Members—who take that view. In a letter that it sent to Members, UK Music says:

“UK Music's position is that we would prefer there was no secondary ticketing market as it is often understood as it does a disservice to our customers. Profiteering undermines the enterprise, endeavours and investment of those whose livelihoods depend on the future sustainability of the music industry.”

We should focus on customers and on those whose livelihoods depend on the music industry, and the same applies to sporting and other events.

I agreed with my hon. Friend the Member for Washington and Sunderland West when she said, in simple terms, that at the heart of the debate, the amendment and consideration of the Lords amendment was the question of whose side we were on. Are we on the side of consumers, or are we on the side of ticket touts? That is the choice before the House, and I hope that we bear it in mind later when we vote.

[Mike Weatherley]

While the speech by my hon. Friend the Member for Shipley (Philip Davies) was thoroughly entertaining, the “facts” in it were totally wrong. I hope that both he and my hon. Friend the Member for Bury North (Mr Nuttall) will listen to my speech, because it will address many of the points that they made.

I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson) for her contributions, which were very good. I shall try not to duplicate the points that she made, and to make additional points. I also thank the Minister for telephoning me earlier today to talk about the issue. I appreciate that. It was the right approach to the debate, unlike some of the references to trilby hats and so forth that we have heard from other speakers. Let us debate this in a serious manner, because it is a serious matter.

Live events, whether they consist of sport, music or theatre, are essential not only to the British economy, but to British society. Each year our creative industries generate more than £36 billion, and employ 1.5 million people. If they are to continue to be so successful, we need to ensure that performers and fans are given a fair deal through a transparent ticket market. Otherwise, inflated prices will mean that fans continue to pay more for tickets, and performers will lose revenue.

[Philip Davies]

How?

[Mike Weatherley]

I will explain that to my hon. Friend in a moment, and I shall be happy to take interventions later.

Society has moved on from the time when there were a few cheeky-chappie touts outside venues selling tickets at marked-up prices. There are some who would reasonably argue that the small scale “street” touts provided a reasonable free-market service. The new issue with which the ticketing industry is dealing is the use of computer programmes, known as botnets, which buy up tens of thousands of tickets only seconds after they have gone on sale, so genuine fans are unable to purchase them at source. That is happening on an industrial scale, and the tickets are then sold on the secondary market. Some botnets in themselves are illegal because they have been used through hacked computers. They are immensely useful to touts, who are able to conceal their identity while purchasing large volumes of tickets with minimal questions asked. Botnets allow touts to seize control of the market, thereby increasing ticket prices.

Part of the reluctance of some to consider allowing the proposed measures to be implemented is based on the mistaken premise that those who are buying and reselling are in some way “classic entrepreneurs”. If that were the case, I would be on their side. I am a Conservative because of Sir Keith Joseph and his principles of the free market. In this instance, however, the free-market scenario has been broken owing to severe supply shortage and unequal purchasing ability. [Interruption.] If my hon. Friend the Member for Shipley wishes to intervene to tell me the five principles of the free market and explain why they apply to secondary ticketing, I shall be glad to debate the point. However, the free market has clearly collapsed because the principles of the free market do not apply in this instance.

There is another important dimension, which was raised by my hon. Friend the Member for Shipley. A ticket is not a commodity like a car; it is a licence to view, owned by the artist. The performances are not a commodity, but a licence to experience. There is the principle of allowing artists to remain in control of their performances. Let me give an example. A football club could sell all its family and juvenile ticket allocations for much more, but it recognises the importance of building a fan base. If all under-16 tickets were bought by “classic entrepreneurs” and sold to adults, tourists or the highest bidder, football clubs would not be developing their long- term fan base. The football clubs know that making a short-term price profit is not in their long-term interests, and it is surely right for the provider of the entertainment to be able to make a commercial decision not to sell at top dollar but to invest in the future fan base. It is the same for live bands and many other events. What the free market does do, which I support, is allow football clubs, bands and theatres to choose how much to charge for their event.

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[Mr Nuttall]

indicated assent.

[Mike Weatherley]

My hon. Friends are nodding away, which is great, but that is a mistaken point of view. On taking money away from the artists and putting it in the pockets of these “classic entrepreneurs” and others in the entertainment industry, let us just say—[Interruption.] Let me explain to my hon. Friend the Member for Bury North, who is shouting from a sedentary position—

[Mr Nuttall]

May I ask a question on an intervention? My hon. Friend has said they are taking money away, but how can that be as the vendor has received full price for the ticket? They have not lost a penny.

[Mike Weatherley]

That is a very good intervention as I have the answer in the very next sentence of my speech.

Let us say that my hon. Friend has decided that he has £200 to spend on his entertainment budget for the year and he would like to go to four concerts at £50 a throw. If he has to pay his entire annual budget on buying just one ticket, he is going to go to only one concert, not four concerts. My hon. Friend the Member for Shipley mentioned the cricket. If someone has paid £500 to go to the cricket game, he will not be buying the T-shirts, the food and all the other things the promoters and artists rely on. Almost more money is paid for merchandise than for tickets. Promoters and artists want people to buy things at the concerts, not for that to be taken away. [Interruption.] If my hon. Friend will not listen, there is no point in his coming to the debate.

The bands will make it clear that it is not just the ticket price for the gig that gets them the money that allows them to tour; it is also merchandising and other things. If my hon. Friend the Member for Bury North has spent his whole annual budget getting to one gig, he is not going to buy the T-shirt and the other things. That is how bands lose out. It is not possible to argue with the economics of that; it is entirely right.

[Nigel Adams]

I want to reiterate that point. Most bands nowadays have to sell merchandise to survive because very few people are paying full price, as they once used to, for the music itself. They therefore rely on selling merchandise on the evening; otherwise, they are not able to survive and produce the fantastic music that British bands do.

[Mike Weatherley]

Absolutely, and there is no doubt that merchandising plays a significant part in allowing bands to continue touring.

[Pete Wishart]

The hon. Gentleman is making a very powerful point, which I recognise from my experience of touring with a band. It is uneconomic to go out with two trucks and all the equipment to play in front of fans. Bands rely on their merchandise and on being able to sell other products to enable them to continue to work and make the fantastic records they do, and ensure that people of any age group can watch them play live. Distortion caused by these appalling ticket prices threatens the industry.

[Mike Weatherley]

I thank the hon. Gentleman, and I would like to thank him for his contributions over the years; we have had good debates in this Chamber.

It is probably true that my hon. Friends the Members for Bury North and for Shipley have unlimited budgets, but most people have a finite budget and they have to make decisions on how to spend their money. If they spend it all on ticketing, they will not spend it on other things.

As has been mentioned, different methods have been tried to control secondary ticketing and to protect purchasers, such as named ticketing. It has been proved, however, that this will not work for every event. It works in some situations, but not others. The industry would like to take other steps to control these abuses but it cannot do so. It has been argued by the ticketing organisations that the measures already in place are enough. If that was the case, why are we still seeing cases where fans or performers are not protected from exploitation and revenue loss?

These amendments do not restrict the buying and resale of tickets. All they ask is that the process is transparent so that buyers have information such as where the seat is, who the seller is, and what the original price of the ticket was, and whether the resale of the ticket is against the terms and conditions of the original purchase. It does not expose the seller to data protection problems. Only those sellers whose job is related to the live entertainment sector will need to provide employment details. This means that an informed decision can be made whether or not to buy a ticket. Similarly, it would mean that in cases where tickets were resold by industry insiders for a profit, it was out in the open.

Creating such transparency means that it will be easier to prevent and detect ticket fraud, expose and reduce insider dealing of tickets, and assist event-holders in protecting their customers from the worst excesses of ticket touting. It will also assist the artists in ensuring that they are able to deliver tickets to the intended market at the intended price. In my view, these amendments provide the right balance to avoid full legislation criminalising the activity by implementing sensible, reasonable information requests. To quote Steve Parker, managing editor of Audience and Live UK:

“The proposed amendment to the Consumer Rights Bill simply requires transparency and the restoration of fairness to the market. It is not a threat, restriction or burden to anyone operating honestly in this sector—it is a threat to those that seek to secretly manipulate the market for their own greedy ends.”

Only the operators who want to hide this information could possibly object to a request for the system to be transparent. The proposed measures have been formally supported by a wide range of stakeholders from the live event sector, promoters including Harvey Goldsmith, the Lawn Tennis Association, the National Theatre, the Musicians Union, the England and Wales Cricket Board, UK Music, the premier music booking agencies, managers of major British bands like One Direction, Iron Maiden, Arctic Monkeys, Muse, Radiohead and Mumford and Sons, and over 50 more in a letter issued over the weekend. These amendments are only opposed by those profiteering from the confusion and technological shortcomings of event ticketing.

[Philip Davies]

The list of those that support this which my hon. Friend rattled off were, from what I could tell, all big businesses in the entertainment world, but has he looked at opinion polls which show that when people are asked, “If you have a ticket, should you be able to sell it on to somebody else at a price you determine yourself?”, an overwhelming majority say yes? The idea that only a few people are against this flies in the face of all the opinion poll evidence.

[Mike Weatherley]

I am so glad my hon. Friend intervened because I would like to quote back to him some things he said in the previous debate we had on the Consumer Rights Bill, on Report on 13 May 2014:

“I think that one of the fundamental rights of the consumer is to know what they are purchasing.”

That is what this measure proposes. [Interruption.] If I may continue, he went on to say that

“legislation requiring labelling is essential for consumers to exercise their right to make an informed decision.”—[Official Report, 13 May 2014; Vol. 580, c. 672-73.]

My goodness, he could be giving this speech for me, Mr Deputy Speaker!

On mobile phone internet usage coverage, which is important, my hon. Friend said on 16 June 2014:

“The lack of transparency and clarity that has persisted in the market has allowed consumers to be deceived.”

That is amazing; it could apply to the area under discussion now. He went on to say:

“It seems like the voluntary ways of ensuring greater transparency...have failed.”—[Official Report, 16 June 2014; Vol. 582, c. 896.]

He said that about mobile phones, but why should it not apply to this debate?

[Philip Davies]

Will my hon. Friend give way?

[Mike Weatherley]

I have one more quote, but I will give way.

[Philip Davies]

I am sorry to urinate on my hon. Friend’s bonfire, but the point is that if I buy a ticket for the Lords test match, I know what I have got. There is no transparency issue; it is a ticket for the test match at Lords. The quotes he is giving on halal meat and all the rest of it are completely different from a ticket to a Lords test match, where it is perfectly clear what I have bought.

[Mike Weatherley]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We should be more gracious to each other. I am frightened that we might undermine that, and that this whole debate is going to descend, which I do not want.

[Mike Weatherley]

Thank you, Mr Deputy Speaker. I was just trying to point out that we ask for transparency in almost every other aspect of our society, and we should be asking for it on tickets. We are only asking for the name, the seat location and so on to be given. I think I have made that point crystal clear.

It should also be noted that the police are generally supportive of the suggested changes to the secondary ticketing markets. Ticketing legislation was recommended in the final report from Operation Podium, the Metropolitan police unit set up to monitor crime around the Olympic games. The police said the Government should intervene in the ticketing market because, among other things, certain aspects of it are funding criminal activity. We cannot argue against that; the police are saying it.

There is one more thing: many ticketing companies argue that should a ticket be invalid, counterfeit or fraudulent, a full refund will be given. We heard that earlier. That is very laudable, but it does not address the full problem. Refunding the price of a ticket will not make up for the travel expenses and accommodation costs of going to the concert, show or event; nor will it make up for the time spent acquiring the ticket.

Refunds look like a fair deal on paper, but even though the buyer will get their money back, the process actually sets up losses across the board. The seller of the ticket does not make any money, the company loses money by having to pay a refund and the buyer does not get the satisfaction of going to the event. The buyer is deprived of the experience that he or she worked hard for and spent money to secure. With the proposed transparent system, that would not be the case.

There is another quirk to the existing system that affects not only the artists but the taxpayer. Some venues, such as the National Theatre and the Donmar Warehouse, are subsidised by the state in order to ensure that opportunities to see productions are available to the widest possible audience. When ticket prices are vastly inflated—as in one case, from £20 to more than £2,000 for a Shakespeare production at the Donmar Warehouse—not only are potential purchasers priced out of the market but the Government’s programme of subsidising the arts is undermined and money that could be ploughed back into new productions is lost. Why would we, as taxpayers, want to subsidise theatre to make it more available to people while at the same time allowing others to make £2,000 on a ticket? That is absolutely bonkers.

The Secretary of State for Culture, Media and Sport has told me that he supports the right of ticket providers to have terms and conditions and for those terms and conditions to be respected, and that any buyer should be aware of and adhere to them. Others who have spoken today have said that there should be terms and conditions, and that they should be respected, just as any other contractual arrangement is respected. That is how purchasing works. If I go on a train, I buy a ticket that is not transferrable. That applies in many other areas of society, too, so it seems bizarre that it does not apply to ticketing. These measures would enable those terms and conditions to be respected, and the Secretary of State should therefore fully support the amendment. I find it bizarre that he does not.

What we are asking for would give artists and venues the opportunity to regain control of ticket pricing and of the terms and conditions that they put on tickets. This would ensure that genuine fans had access to the events they wanted to attend. It would also hinder the ability of those using new methods of mass ticket-buying to artificially inflate the market in such a way as to creative negative impacts on the UK’s creative and sporting industries. If a band, artist or promoter wants to sell tickets at an inflated price, they are absolutely at liberty to use the secondary market to do so, but our proposals would mean that they would need to print on the ticket the fact that they had done so. I see nothing wrong with that. If we can make a small step in supporting the artists and fans, as we can with these amendments, we will have taken a very large step forward.

[John Robertson (Glasgow North West) (Lab)]

It is a pleasure to follow my fellow co-chair of the all-party parliamentary group on music, the hon. Member for Hove (Mike Weatherley), and it will be difficult to follow such an excellent speech. I agree with every point he made. I shall make my contribution a little more personal.

I got involved in ticket touting—in the sense of complaining about it, not actually doing it—many years ago. I became an MP 14 years ago and about a year later, Take That got back together. My three daughters were desperate to get tickets to see them, but I am sad to say that they did not, although they have seen the band since. After a lot of shouting and ear-bashing and being told that I should do something about the problem because I was an MP, I looked into the situation and found it to be nearly as bad as it is today. Things were not so technically advanced back then, but they were certainly shaping up that way.

Oral Answers to Questions

Mike Weatherley Excerpts

Monday 16th April 2012 Commons Chamber

[Mr Gibb]

I understand my hon. Friend’s concerns about funding in North Yorkshire, which is ranked 114th out of 151 authorities, with its schools receiving £4,786 per pupil compared with the national average of £5,082. The current system is unfair. It is opaque, which is why the Government’s announcement at the end of March begins the process of moving towards a fairer system with reforms to the local formula. We intend, ultimately, to move to a national funding formula, but of course in the current economic climate, stability has to be a priority.

[Mike Weatherley (Hove) (Con)]

16. How many people aged 16 to 18 started an apprenticeship in (a) Hove constituency, (b) the south-west and (c) England in 2011.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

For the academic year 2010-11, final data for young people aged under 19 show that there were 110 apprenticeship starts in Hove constituency, which is an increase of 8% on the 2009-10 figure; 15,720 apprenticeship starts in the south-east region, which is also an increase of 8% on the 2009-10 figure; and 131,700 apprenticeship starts in England, which is an increase of more than 32% over the past two years.

[Mike Weatherley]

I congratulate my hon. Friend on the outstanding progress he has made in promoting apprenticeships. The previous Government provided for so-called apprenticeships without even a requirement for apprentices to have a job. Will he reassure me that under this Government the requirement to be in proper work will remain the core of our apprenticeship offering?

[Mr Hayes]

One of the first things I did when I became a Minister was to insist that apprentices should be employed, in order to end programme-led apprenticeships. They were the hallmark of the previous Government’s approach, as was recently highlighted in the programme referred to a few moments ago.

The letter that I am holding was sent to me, and it says:

“We warmly welcome the Government’s focus on Apprenticeships and its efforts to guarantee”

apprenticeship “quality”. It is signed by some of Britain’s leading companies and by the TUC. So business, unions and the Government are coming together—only the Labour party is standing apart.

Intellectual Property (Hargreaves Report)

Mike Weatherley Excerpts

Thursday 7th July 2011 Westminster Hall

[Damian Collins]

My hon. Friend makes a compelling point, which will have been heard by Ministers and search engine owners. I attended a briefing with the BPI, which represents the music industry, to talk about that very issue and was given a live demonstration, in which typing “download music” into Google meant that the predictive search came up with “download music for free”.

If we believe that technical measures should be used to restrict people from downloading content illegally, we should consult those who run search engines about the priority and ranking that they give to sites that direct people to sources where they can do that. That is a legitimate part of the debate, and search engine representatives should welcome it and be open to consultation with Government about it.

[Mike Weatherley (Hove) (Con)]

Is my hon. Friend aware of the traffic light proposals by the BPI and others that may go some way towards what he suggests?

[Damian Collins]

Yes, I am. It sounds like a sensible way forward. Those things are always best achieved in dialogue with the industry, through Ministers. That is often a much better approach than regulation and direct legislation, which, as we know from other remarks that have been made, can often be difficult to accomplish successfully. That dialogue is important. The companies concerned will have heard the remarks of my hon. Friends the Members for Hove (Mike Weatherley) and for Northampton South (Mr Binley).

Going back to my time in the advertising industry and to a case brought to me by a constituent, I can think of issues on both sides. A gentleman who runs a television business in Cheriton, Folkestone thought that a good way to sell the latest high-definition televisions would be to run an old-fashioned television next to a high-definition one, to show how that set revealed the improvement in the quality of the broadcast. Someone told him that he might need an entertainment licence to do that and that, for that simple demonstration in his shop, he would be charged several thousand pounds. He suggested that he would not do that, and a frank exchange of words was had—after which the problem seemed to go away. Nevertheless, he was potentially running foul of copyright laws.

Many people, if not in this room then elsewhere, will have put together a presentation for their work with images found on Google or elsewhere, and they will not have had a copyright licence to use them. I am sure that people of my generation can think of times when a friend lent them a tape-to-tape copy of some new musical work for their enjoyment, and they, too, would have been in breach of copyright regulations. Those issues have always existed. In some ways the digital economy brings them to a head. In the days when people made cassette copies for each other, peer to peer, the quality of reproduction was relatively poor. However, when the reproduction quality is almost perfect and a reproduction can be transmitted at any time at virtually zero—or actually zero—cost to people, with no effort, the market is changed dramatically. The ability of an owner to own, control and sell the perfect rendition of the work is changed. The rules of the game change, and we should consider what that means for the law.

I was interested in the Hargreaves recommendations on private use. I suppose that copyright and licensing have always respected the idea that the value of a work is based not on the time and effort taken to produce it, but in many cases on the value to the user. In the advertising industry, if music or a photograph or other image is used for a campaign that will run around the world, the cost will be much greater than for the insertion of a stand-alone image in one newspaper, or a radio advert on one local station. There is a recognition of the benefit to the user as well. That is important. If some relaxation of the rules on private usage, where there is very limited commercial value, if any, to the creator, would simplify people’s ability to use work for their own entertainment and for their and their family’s pleasure, I think that it would be reasonable and sensible to consider it. As the Secretary of State for Culture, Olympics Media and Sport has said, we do not necessarily want a system in which someone can be sued for using a piece of Beatles music on a video of their cat on YouTube. That does not mean an open licence system without any attempt at regulation and control.

I am sure that many people would hope that a simplified version of rights clearance and the purchase of rights will mean that older materials—old pieces of film and programming—might be more readily available on services such as BBC iPlayer and elsewhere online. That might bring into play the rich archive of material that broadcasters such as the BBC own, which it is currently difficult to licence and use.

I agree almost entirely with the remarks of my right hon. Friend the Member for Bath about the digital exchange. The idea put forward by Hargreaves is interesting and compelling. There are already clearance houses for rights—PPL and PRS for music in particular—so I wonder what that new exchange would mean for them. I support the view that it would be wrong to compel people to register their works at the digital exchange with the back-door threat that otherwise they might not be covered by any of the legal protections in the Digital Economy Act 2010. Such compulsion would be cause for concern.

When I was a candidate for Parliament, like many other candidates at the time, and many hon. Members of the previous Parliament who were part of the debate on the 2010 Act, I met photographers who were concerned about the proposed legislation on orphan works. Not only should a way be found to pay a nominal licensing fee for orphan works such as images that people want to use, but if that use brings substantial financial gain—particularly if a found image is used in an advertising campaign, which brings great commercial benefit to the company using it—there should be a way to assess what the real value would have been if a proper licensing agreement had been in place. Clearer guidance is also needed on the commercial value of orphan works, in cases where the person in question comes forward after the image’s use.

The issues present a great overall challenge. Our responsibility is to protect the industry and the rights of the content creators, so that they know that they are in an industry where their endeavour and work receive a fair price and are fairly used, and they have incentives to carry on producing their work. One of the challenges that we face, in addition to an uncertain regulatory playing field, is the public’s attitude towards the illegal use of content, particularly in the music industry. Research demonstrates that, on the whole, the problem is not that people do not think they will be caught downloading material illegally, but that they do not think that there is anything wrong in it. The problem is that people do not necessarily understand the impact of piracy and the illegal use of works and the knock-on consequences for the creative industries. That is a communications and attitude-change challenge for the industry.

Part of the solution should be effective resolution using ideas in the Hargreaves report, a better framework for licensing works and understanding how those things work; but there is also a challenge for the industry to make the legitimate means of getting access to music and purchasing content so attractive, simple and easy to use that people would on the whole be deterred from using illegal sources, as the quality of the product and the method of delivering it would be so inferior and the potential consequences not worth the risk.

I welcome the report and hope that we shall not be back here in two years discussing yet another Government report on the issue, but that we shall instead be celebrating some progress on the matter.

--- Later in debate ---

[Mike Weatherley (Hove) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies, and I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing this exceptionally well-timed and vital debate. I also draw the attention of hon. Members to my published declaration of interests. Intellectual property is suddenly popular, not only via my “Rock the House” project, but also in terms of Government attention. Intellectual property seems to have had more reviews than a west end show, and after 300 years, copyright is rightly back on centre stage.

As we have heard many times in this debate, intellectual property is the bedrock of a modern economy. Our traditional manufacturing base has gone, and industries that create new wealth are few and far between. There is one notable exception: we are very good at creating intellectual property in the creative industries. The figures speak for themselves—we heard some numbers earlier and I will introduce others. Global trade in IP licences alone is worth more than £600 billion a year. We are a major exporter of IP. In the UK, investment in intangibles has now outstripped investment in tangible assets by £137 billion to £104 billion. Our creative industries are world class and punch well above their weight.

Lara Croft was born in Wimbledon, and “The King’s Speech” dominated the Oscars. Adele is in the middle of a record-breaking run at the top of the US charts. Other countries envy the talent in this country, and as we heard earlier, our youngsters are queuing up to get a job in the creative industries. Some 2 million people already work in creative businesses. We want that number to grow, as do our youngsters who are looking for jobs now—that includes two of my children, who hope to join the creative industries shortly.

In recent years there have been 26 reviews into intellectual property. Who will invest in a country that is constantly reviewing its legislation and cannot decide whether to protect IP? Who will invest in a country that claims to value IP, yet turns a blind eye to theft on an unprecedented scale? Will the Minister confirm that there will be no more reviews of IP this Parliament? Will he unequivocally state whether the UK will protect IP or allow it to migrate elsewhere?

One example of the problem is the unauthorised reproduction of magazine and periodical publications online. If professional publishers are to continue to make significant investments in new applications for online publications, illegal copying and distribution must be more effectively addressed. That requires support for the enforcement of rights, and support from consumers for the use of legitimate services. Growth will not be promoted by removing or reducing rights that act as incentives for investment.

[Mr Foster]

I thank the hon. Gentleman very much for drawing attention to magazines. Often in these debates, we talk about music, film and video games; rarely do we mention magazines. However, the figures show that there is huge piracy of magazines. Future Publishing in my constituency is in real difficulty because of what is happening.

[Mike Weatherley]

I thank the right hon. Gentleman for his intervention. Future Publishing has pointed out to me a website—I think it is in Poland—that reproduces all its magazines online to as high a quality as it can. That is the type of thing that we need to shut down, so I welcome the intervention.

[Mr Foster]

I apologise for intervening again, but the hon. Gentleman is absolutely right. I, too, have seen that website. Pornographic material is included on the same site. The interesting thing is that it purports to be a genuine site, in that people have to pay a small amount of money to use it, so it is misleading consumers. It also contains advertising from reputable firms. We must deal with that.

[Mike Weatherley]

The right hon. Gentleman is exactly right. I think that the charge is equivalent to $10 a month, the payment of which allows unlimited downloads. Zero cents of that $10 goes back to the publishers.

As we come out of the recession, there is much talk of rebalancing the economy. Where will the growth come from? We cannot compete on labour costs and we do not want to. Our strength is in pharmaceuticals, high-end engineering, brands, bioscience and, of course, the creative industries. Our education publishers are No. l in the world. Our music industry is at No. 2. Our games industry used to be at No. 3—the position is under threat as other countries adapt and offer incentive packages that we are not matching. Surely we should be as proud of our creative industries and their podium positions as we hope to be of our athletes next summer.

To be fair to the present Government, the Hargreaves review is their first review of IP. I should also point out that there is a duty on those in the creative industries to adapt their business models far more quickly than they have done in the past. That includes reduced pricing models for the prime product and a changed emphasis on secondary income streams, such as live music and merchandising.

The Government’s response to the Hargreaves report is a tailor-made opportunity to celebrate our creative industries, and to confirm that we are open for IP business on a global scale. Will the Minister reassure banks in the UK that we are the best place in the world to invest in IP businesses? Will he confirm to creative businesses in this country that their assets will be protected by legislation? Will he encourage new talent with the message that people’s rights in respect of what they have created will not be reduced by exemptions and undermined by unnecessary regulation?

Let me turn to the Hargreaves report. It is better than I was expecting; I know that many other hon. Members have said the same. I have to admit that my heart sank when I met Professor Hargreaves and he hinted to me that he wanted to introduce US-style fair use here. His argument was that our IP laws were preventing internet companies from launching, yet I remember many search engines and social networks starting here. Some, such as Mumsnet and Friends Reunited, have been extraordinarily successful. They were not held back by our IP laws; they just did not have access to the same funding as Google and other silicon valley giants. Introducing fair use here would help only the likes of Google—established players with deep pockets that can fund the legal test cases that are such a feature of the US system. It was therefore with some relief that I read in the Hargreaves report that he rejected fair use for the UK. That is a sensible recommendation, and I urge the Minister to endorse it.

However, the report goes on to recommend a range of new exemptions. Let us be clear about what an exemption means for a creator. On the one hand, with our 300-year-old copyright tradition, we say that an author owns his work when he writes something. It is his property; he created it, and it is his. On the other hand, with an exemption, we say that he does not own his work any more in certain circumstances. Of course, there are situations in which the public interest must outweigh a property right, but we should be wary of taking away someone’s property, especially their own creation.

One example involves text and data mining. No case is made in the report for a text and data mining exemption. Such mining is simply described as making it easier to crawl the internet for material. Surely that is what Google and other search engines do on a commercial basis. Do we really need an exemption to make Google’s life easier? Should it not be obtaining licences if it wants to use other people’s material?

Parody, as we have heard, is another example. Parody is almost the hallmark of British comedy. It can hardly be argued that there is a shortage of parody in the UK. However, the Hargreaves report seems to think that there is a problem. The report concludes, with seemingly no evidence, that we should have a parody exemption, but should someone be allowed to take someone else’s work just because they are making fun of it? I do not see how parody justifies removing a creator’s basic rights in their work. Then there is research. Of course there is value in building on the work of others, but does that mean that the original researcher should get nothing for their work? I strongly urge the Minister to reject those recommendations in the report. This goes to the heart of copyright as a property right. Arguably, something that someone has created is even more precious than property. Our legislation gives creators ownership of their work. We should not take those rights away without good reason.

There are two areas where there is justification for an exemption, and that is broadly accepted by creators. The first is archiving. We have some unique collections of film and music in this country; indeed, I understand that film originated in my constituency of Hove. The British Library, for example, has the national sound archive, with millions of recordings going back to the birth of the gramophone, mostly donated over the years by record companies. Making digital copies is an obvious way of preserving those for future generations. When the Government consulted on an archive exemption three years ago, industry backed it. We should implement it now.

[Mr Christopher Chope in the Chair]

The second area is format shifting. That is copying CDs to MP3s, or DVDs to an iPhone or similar—something that millions of people do, despite its being illegal at the moment. Having just parted with cash for both a CD and their new MP3 player, consumers rightly expect to be able to copy music and films across without paying any extra, as they in effect paid for that in the purchase price.

The sticking point was whether musicians should get some recompense for that format shift. In the rest of Europe, that takes the form of a levy on copying devices. I do not like the idea of a levy. It is a blunt instrument that does not necessarily follow the market. Surely some form of licence could be allowed, provided that the material is solely for the private use of the purchaser. If it turns out to be impractical to stop internet file sharing, we could revisit the idea of a levy on equipment, as that would get some revenue to the rights holders and is attractive for its ease of use. In the meantime, I urge the Government to reject the idea of a levy on equipment and to allow personal-use format shifting, provided that an original licence has been purchased—in most cases, that would simply be someone paying for the CD for their own personal use.

On exceptions, the Hargreaves report gets some things right, but not others. The challenge for Government will be working out what to embrace and what to ditch.

[Ian Lucas (Wrexham) (Lab)]

I would like clarification. Is the hon. Gentleman saying that the licence would be bought at the same time as the CD, as part of the price?

[Mike Weatherley]

I thank the hon. Gentleman for his intervention. Yes, my belief is that once someone has bought a CD, they should be able to shift the music to another format to listen to it in their own home, for their own private use; that becomes an infringement only if the material is used for other purposes. The industry got that wrong years ago. It is making illegal users out of millions of people in this country. They tend to ignore the law on copyright protection because they see it as a ridiculous law, and once people see something as a ridiculous law, they throw away other laws. We should allow format shifting for personal, private use once someone has bought a full legal copy.

I was saying that the Hargreaves report got some things right, but not others, and that the challenge for Government would be working out what to embrace and what to ditch. The same is true of the idea of a digital copyright exchange and the recommendations on licensing. The report identifies licensing as underpinning creative businesses. Indeed, licensing is now central to almost every business model, whether we are talking about a direct licence from a rights holder for a specific repertoire, or a collective licence covering an entire catalogue. The report recommends that the collective licensing bodies adopt a code of practice to facilitate efficient markets. That is a good suggestion, but does it need legislation and, if so, how intrusive should it be? The British Copyright Council is already producing a template code, and all the collective licensing bodies in the UK have agreed to sign up to it. If the industry is adopting good practice voluntarily, we do not need more regulation.

Perhaps the most high-profile recommendation in the report is the one for a digital copyright exchange. In essence, that is a good idea. Indeed, many parts of the industry are already developing databases. Phonographic Performance Ltd, for example, has a database of 5 million recordings, and the database includes record company ownership and performer line-up. That is essential for its licences with the BBC and others, so that the broadcasters know what is in their licence and the right musicians can be paid. Book, newspaper and music publishers, along with photographers and others, are developing similar facilities. There may even be a role for Government in co-ordinating those efforts and encouraging greater co-operation between databases.

However, the Hargreaves report certainly goes a step too far. It recommends that the digital copyright exchange become a licensing platform, with flat-rate pricing available at the click of a mouse. Far from encouraging growth, that is anti-market. It is extraordinary that a review about growth should recommend a trading platform where prices are static and there is no room for negotiation. How on earth could any rights holder be expected to set a price in advance for a totally new service that at the time exists only in the mind of the creative entrepreneur? That is a recipe for stagnation.

As if that was not enough, the report also proposes introducing penalties for rights holders who do not participate in the digital copyright exchange. Such wrongdoers would be denied access to their rights under the Digital Economy Act 2010, creating a two-tier system for copyright, and that must be resisted. Effectively, it is compulsory registration by the back door, and we should not allow it. One of the great strengths of copyright is its flexibility, and the fact that it is available to all creators, big and small. The principle of not requiring formal registration to enjoy copyright is enshrined in international treaties. We should uphold that principle, not undermine it.

We then come to the report’s suggestion that Government should appoint a digital champion to sort everything out. This is perhaps the most extraordinary of the report’s recommendations. The review rightly concludes that, if it is to work, the digital copyright exchange must be industry-led and must respond to the business needs of the creative sector. It then recommends that Government appoint a tsar to direct that industry initiative. “Industry-led” means led by the industry, not by a digital champion appointed by the Government. Will the Minister reject the idea of a digital champion, and allow the digital copyright exchange to be led by the industry from the start—or at least by a digital champion who is advisory rather than dictatorial?

In conclusion, I urge the Minister to be selective in his response to the Hargreaves report. Will he say yes to protecting our creative industries and the property owned by the creators? Will he say yes to archiving, private format shifting and some form of central rights database? Will he say no to the exemption of text and data mining for research and of parody, and will he be selective in exemptions linked to the national interest? Will he say no to fair use and to a centralised pricing model in the central rights database? Such confirmations and rejections would confirm this country’s commitment to ensuring that IP gives world-class support to business, and to the talent that drives it.

Phonographic Performance Ltd

Mike Weatherley Excerpts

Wednesday 6th July 2011 Westminster Hall

[Ms Ritchie]

I thank the hon. Gentleman for his welcome intervention. I recognise that in another life he was a musician, and is a member of a popular Celtic folk band in Scotland, which has played in Northern Ireland on several occasions. I recognise the musicians’ plight, and that they and the music industry are an integral part of small businesses. I am reflecting on the position of small and medium-sized enterprises in Northern Ireland, where we have a predominantly public sector-led economy, and are trying to grow our economy and encourage small businesses. Any additional taxation or fees simply imperil their financial situation.

[Mike Weatherley (Hove) (Con)]

Does the hon. Lady agree that it is a blunt instrument to use the arbitrary definition of small businesses as being those with fewer than 50 people, when radio usage in small companies is often higher than in large companies?

[Ms Ritchie]

I thank the hon. Gentleman for his intervention, but I am simply using the definitions proposed by the European Union. I accept his point, but perhaps I could continue my speech.

It is likely that many firms with fewer than four employees are unaware of the exemption, and more should be done to ensure that they are not paying excessive amounts. That brings me to a related issue: the cost of referring a case or complaint to the Copyright Tribunal can be prohibitive. As Consumer Focus highlighted, that is especially likely to be the case for small and medium-sized businesses, and even for a trade association, such as the Federation of Small Businesses. We must be especially aware of such concerns given the relative monopoly held by the collection organisations. Businesses have no alternative within the market.

In contrast with most other European countries and the US, the UK does not provide in law for the regulation of licensing collection bodies, and no authority is charged with their ongoing supervision, except in relation to the ad hoc resolution of complaints through the Copyright Tribunal. Given that somewhat unbalanced field of play, it is important to consider the charges that companies face. With reference to the PPL charges, businesses defined by the European Commission as small enterprises —including, for example, a hair salon with more than four employees and with more than five treatment or stylist chairs—that use a radio, CD player or MP3 player will have to pay PRS £169 and PPL £121 a year. An office or factory with 135 employees will pay PRS £1,142.03, plus VAT, and PPL from £113 depending on square metres. A small café seating up to 30 people will be charged for television, radio and CD. The PRS fee will be £440.72 and the PPL fee will be from £113, depending on square metres.

Set against that, I note that the PPL’s total licence fee income grew 10.7% to £143.5 million from £129.6 million the previous year. It boasts of a revenue growth from public performance of 2%, and claims that that is noteworthy. Its last press release around 8 June stated that

“it was achieved despite...extremely difficult trading conditions for many of the company’s customers and licensees.”

The fact that so many businesses are complaining about the high cost of the licences and the undue strain that it is placing on their finances indicates that there is a more draconian approach to compliance. It is vital—I say this advisedly—that PPL works closely with such businesses, and that the relationship is symbiotic rather than confrontational. Proclaiming their own revenue growth at a time of difficulty for the businesses that purchase their licences is not a step in the right direction.

As well as considering the level of charges, it is important at this stage to consider the sort of businesses that are most likely to be affected by the current arrangements. In my constituency, which is on the east coast of Northern Ireland, a large proportion of the economy revolves around the tourism and hospitality industry. The complexity and cost of requiring two separate licences, combined with an aggressive compliance regime, can put undue pressure on the bars, hotels and restaurants that form the background and backbone of our tourism industry. If those establishments are forced to cease playing music, business will suffer, customers may leave and the public’s exposure to artists’ music will be greatly decreased. As highlighted in a recent report by Consumer Focus, the European Commission commented, in reference to competition, copyright and collective rights management, that

“no other sector operates such complex licensing arrangements.”

Before concluding, I wish to raise an associated and relevant concern that relates specifically to businesses that play radio stations. Although the radio station will have paid a royalty fee for playing the music, the small or medium-sized enterprise effectively has to pay that fee again, which I consider amounts to double taxation. In a similar manner, an hotel may be faced with a double cost for playing music in separate areas. That overly severe and inflexible approach damages small businesses. If those businesses are forced to stop playing music, it will hurt not only the businesses but those artists who, as the hon. Member for Perth and North Perthshire (Pete Wishart) pointed out, may live off a small wage and rely on being played on the radio for exposure. In summary, the licensing arrangements, which in some instances comprise many different tariffs, are cumbersome and cost-prohibitive for many owners of small and medium-sized businesses.

[Mike Weatherley]

I wonder whether the hon. Lady will expand on one aspect of that argument. If music is a necessity and part of the raw material required to provide a service in a café, for example, how does it differ from any other products offered by that café, such as coffee? Does the hon. Lady suggest that the Government should subsidise all other services offered by that business?

[Ms Ritchie]

If I may, I will say with a degree of temerity that there is a major difference between paying two licence fees, and paying for coffee and other services offered by a café. I am sure that we could elaborate further in the margins of the debate.

The licensing arrangements, combined with what is perceived to be an increasingly draconian compliance regime, is putting businesses under pressure. If we recognise that, we must find a solution that protects our valuable music industry, of which small businesses form an integral part. I urge the Government to take steps to create a simpler and more effective licensing regime. It is vital that licensing requirements and costs do not disproportionately impact on small and medium-sized businesses at a time when many already face a challenging economic climate.

In Northern Ireland, all parties are collectively trying to rebalance the economy and change it from being 77% public sector-led, to a system that puts greater emphasis on the private sector and will provide opportunities for people to develop business ideas. Given the degree of compliance involved in the licensing system, and the fees that are charged in such a cumbersome way, the charges need to be streamlined so that people and businesses can enjoy greater comfort. People should be able to enjoy the music without facing difficult charges. It is vital that the licensing requirements be streamlined and reviewed as a matter of urgency, and on behalf of small to medium-sized enterprises throughout Britain and Northern Ireland, I ask the Minister to take those views on board. I recognise that we have devolved arrangements in Northern Ireland, but the responsibility for licensing lies in London.