Consumer Rights Bill

Debate between Nick Smith and Sharon Hodgson

Monday 12th January 2015 Commons Chamber

[Mrs Hodgson]

I agree with the hon. Gentleman and thank him for that valuable contribution. He is not only a creator of music—he remains one to this day—but a huge supporter of the music industry.

Other signatories to the letter included probably the world’s most pre-eminent promoter, Harvey Goldsmith CBE; the operators of west end and regional theatres; a host of individual music managers who look after some the country’s leading performers, including Iron Maiden, Muse, Arctic Monkeys and even One Direction; and most other industry umbrella bodies, which represent countless businesses contributing to the vitality of our creative sector, such as the Association of Independent Festivals and the Event Services Association.

All those bodies, and more, joined together to call on the Government to make one simple change. Would the Government rather listen to that collective call from the live event sector: the people whose hard work, talents and investment create the demand that the touts exploit? Alternatively, would they rather listen to the four companies that have been lobbying so intensely—I have with me reams of letters they have been sending out lately—against opening themselves and their relationships with big-time touts up to scrutiny?

[Nick Smith (Blaenau Gwent) (Lab)]

May I also praise my hon. Friend’s leadership? She has done a cracking job raising this important point. Does she agree that we need to get at the touts? Those internet spivs are ripping off fans across the country, rigging the market and preventing real fans from going to gigs by exploiting them through the hugely overpriced tickets that they have harvested.

[Mrs Hodgson]

My hon. Friend makes an excellent point. If the Minister does not want to listen to him, me, Members from both Houses or the creative industry, she should at the very least listen to the police.

The “Ticket Crime: Problem Profile” report by Operation Podium has, of course, been quoted in this place before—several times by me, in fact—but it bears repeating. This was, after all, the unit that was set up to tackle organised crime affecting the Olympic games, and it spent about seven years looking at the workings of the ticket market. In particular, it looked at the major ticket touts—the very people my hon. Friend the Member for Blaenau Gwent (Nick Smith) spoke about—because of the links that many of them have to serious and organised crime and money laundering, and because it was likely that the same people would try to tout Olympic tickets.

After spending so much time looking at the ecosystem that exists behind the veneer of legitimacy provided by the secondary platforms, the Metropolitan police’s Operation Podium unit produced a final report on ticket crime in February 2013. It found that:

“Due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”

It concluded that:

“The lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticket market encourages unscrupulous practices, a lack of transparency and fraud.”

It made the following recommendations:

“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets. The lack of legislation in this area enables fraud and places the public at risk of economic crime.

The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”

Will the Government listen to the police, who have nothing to gain either way, or to those who have gained and continue to gain from the lack of the regulation that the police say is needed?

One public agency that might have something to gain from the change is Her Majesty’s Revenue and Customs. One effect of the new clause proposed in Lords amendment 12 is that it would be possible to see which individuals were reselling tickets as a commercial enterprise, and therefore who should be paying tax on the sales made through the websites.

At the moment, when somebody buys a ticket on such platforms, they are led to believe that they are buying from another fan, and the only VAT that they see on the final statement is the VAT on the service charge levied by the platform. If they are, in fact, buying from a third party business—or even from the event organiser, or, as in some cases, the performers themselves—VAT should be paid on the ticket price, as well as, obviously, on its profits as a company. That point was raised last weekend with the Secretary of State for Culture, Media and Sport in an e-mail from a live music agent that I was copied into. They made the point that PRS for Music, which collects royalties to distribute to artists and music publishers, is also being deprived of its lawful entitlement.

I wrote to HMRC following the “Dispatches” documentary, “The Great Ticket Scandal”, in 2012; I have also referred to that in the House countless times. That programme clearly showed how tickets were being bought up and resold in huge quantities—indeed, channelled directly but surreptitiously to the secondary market by promoters and managers. The response that I received from HMRC was that no investigation could be made unless there were specific questions about specific individuals or businesses. Of course, we did not have those then and we do not have them now, precisely because we cannot see which individuals or businesses are selling the tickets and in what quantities. If that transparency is brought into the market through the proposed new clause, perhaps the Treasury’s coffers will see a much bigger slice of a market that is estimated to be worth between £1 billion and £1.5 billion a year—that is the secondary market alone and does not include the primary market.

The same principle could be applied to the problem of botnets, which GET ME IN! has been saying is the biggest problem and should be the focus of any legislation. There is certainly a case for keeping the law on the misuse of computers under review. The hon. Member for Hove and I have met the Under-Secretary of State for the Home Department, the hon. Member for Staffordshire Moorlands (Karen Bradley), who has responsibility for organised crime, to discuss this matter.

It is welcome that primary ticketing companies, such as GET ME IN!’s parent company Ticketmaster, invest in their own software to try to stop people scooping up large quantities of tickets automatically. However, let us be clear that touts use botnets only because they know that they can shift all the tickets they manage to buy from the primary market through the secondary market with the benefit of complete anonymity, with no questions asked by the platforms about how they got them. The secondary platforms are best placed to detect ticket crime at the moment, but they do nothing, because that is to their benefit. If we make the market transparent, it will be clear for everyone to see who has an abnormally large number of tickets, and I bet that the use of botnets would drop off sharply as a result.

This entire debate boils down to a simple divide: it is about whose side we are on as legislators. Are we here to pass laws to protect and enhance the rights of ordinary consumers, or are we here to block laws that might make individuals and companies more open and accountable to those consumers? It is about whose interests we are here to serve. Are we here to serve those who elect us, or are we here to be spin doctors for those exploiting them and apologists for those who know full well that they are lucky to be getting away with what they are doing? It is about whose opinions we value most highly. Do we listen to our constituents, the police and those in the live events sector, who all tell us that there is a problem and a gap in the law that needs to be closed, or do we listen to the few who benefit from that gap in the law? I know whose side I would rather be on, whose interests I am here to serve and whose opinions I value most.

Nobody operating honestly in the secondary market has anything to fear from transparency, and no consumer will be left out of pocket. If anything, the secondary platforms should be embracing the opportunity to build confidence in their sector and limit their exposure to criminal activity. I hope that Members of all parties will think on those points when they go through the Division Lobby later tonight; I am minded that the amendment will have to be pressed to a Division. Let us finally do the right thing and put fans first.

Consumer Rights Bill

Debate between Nick Smith and Sharon Hodgson

Tuesday 13th May 2014 Commons Chamber

[Mrs Hodgson]

I am delighted to be able to speak on new clauses 18 to 21, which stand in my name and those of the hon. Member for Hove (Mike Weatherley) and other hon. Friends. I add my support to new clauses 8, 16 and 17, which were tabled by my hon. Friends on the Opposition Front Bench and ably argued for by my hon. Friend the Member for Walthamstow (Stella Creasy) this afternoon and in Committee.

New clause 18 follows directly from the conclusions and recommendations of the recent excellent report by the all-party group on ticket abuse. I want to put on the record my thanks to colleagues across the House and all the outside experts who contributed to that excellent report. We found that the existence of a secondary market for event tickets is justified by the need of genuine consumers to pass on tickets that they can no longer use. To some extent, that is because event holders are not very good at facilitating refunds or exchange mechanisms, even though they sell tickets many months in advance of the event.

On that point, I will speak briefly to new clause 12. It is a shame that the hon. Member for Shipley (Philip Davies)—he is not listening now—would not allow any interventions, because I wanted to correct for the record some of the errors in what he said. He is right that we have regularly locked horns on the issue, but that does not mean I will sit back and not seek to correct him when I think he is wrong. First, the Opposition are seeking not to ban the resale of tickets, but to regulate and reform the market in the interests of consumers through these very sensible cross-party proposals. My hon. Friend the Member for Walthamstow did not “allude”—I think that was the word he used—to trying to ban the resale of tickets.

Secondly, the hon. Member for Shipley was incorrect to claim that no one gives refunds at the moment. The Rugby Football Union guarantees full refunds for high-demand matches—I am sure that the world cup would qualify—up to an hour before kick-off. It also provides legitimate resale platforms. This ensures that any investment goes back into the sport of rugby. The England and Wales Cricket Board has established ticket exchanges at each venue and centrally so that a supporter who can no longer attend a match or has a spare can legitimately re-sell their ticket. Those are just two examples among many more that are out there.

[Nick Smith (Blaenau Gwent) (Lab)]

Does my hon. Friend agree that new clauses 16 and 18 are particularly powerful, because they would enable us to identify the power sellers—the people who buy tickets on an almost industrial scale, and by doing so corner the market, rip off consumers and push up prices? Unless we do so, it is more likely that £250 tickets for the rugby world cup can be sold for over £1,000, as is happening at the moment. That has to be a bad thing, and we must stop it.