Consumer Rights Bill

Philip Davies Excerpts

Monday 9th March 2015 Commons Chamber

[Jo Swinson]

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

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

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

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

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

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

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

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

[Philip Davies (Shipley) (Con)]

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

[Jo Swinson]

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

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

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

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

[Philip Davies]

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

[Jo Swinson]

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

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

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

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

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

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

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

[Philip Davies]

Is that a compliment?

[Jo Swinson]

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

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

[Philip Davies]

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

--- Later in debate ---

[Philip Davies]

It is difficult to know where to start, but I shall begin by saying that there was one thing on which I very much agreed with the hon. Member for Edinburgh South (Ian Murray), which was when he said at the start that the Government had in effect done a massive U-turn—they clearly have. My colleagues ought to be aware that in a few minutes’ time, or whenever it may be, they will be encouraged by the Minister to vote for something that they have twice been invited to vote against. I should say to the hon. Gentleman that if his party is lucky enough to be in a position to put a coalition together after the election and he is thus thrashing around for coalition partners, he will have seen at first hand what happens in coalition with the Lib Dems: they find it easy to change their view on something within a few weeks, and usually it does not take them that long.

[Clive Efford (Eltham) (Lab)]

On changing minds, perhaps the hon. Gentleman should look closer to home, as the Prime Minister seems to have changed his mind about TV debates.

--- Later in debate ---

[Philip Davies]

You would rule me out of order if we got into a slanging match about TV debates, Mr Speaker. The hon. Gentleman is an affable chap and I am happy to have a cup of tea with him afterwards so we can discuss the merits of the TV debates. I do not think this is the right venue for such a discussion, as I would rightly be ruled out of order if I were to go down that route. I knew it was a mistake to give way to him.

Once upon a time, as you will recall, Mr Speaker, the Conservative party used to believe in the free market. It appears to be an increasingly alien concept these days, but I am wedded to the idea and I always thought it was what the Conservative party believed in. I am talking about the idea that if someone owned some property, they were free to sell it on to somebody at a price they were happy to sell it for and others were happy to pay. That is the whole essence of the free market, and it happens with every possible thing we can ever buy, including houses—they are in short supply at the moment too, with much more demand than supply. But I worry that Government Members seem to have given up completely on the free market.

[Kelvin Hopkins (Luton North) (Lab)]

rose—

[Philip Davies]

I am happy to give way to someone who never believed in the free market.

[Kelvin Hopkins]

Indeed; the hon. Gentleman has a point. The free market operates where supply can actually be increased. Where there is a limited supply, the price simply increases and people are exploited.

[Philip Davies]

I am interested in what the hon. Gentleman says. I do not want to rehearse all the arguments we have had in the past, but what we are talking about does not just happen with tickets. For example, limited edition products are sold all the time—there is a limited number of them. When a painting is sold, there is just one and the demand for it may well outstrip the supply. Is the hon. Gentleman saying that wherever demand outstrips supply and the supply cannot be increased, nobody should ever be able to make a profit? That may well be the policy the Labour party is arriving at: nobody is ever allowed to make a profit. That is a perfectly respectable position for the hon. Gentleman to hold, and he holds his positions consistently, and with great vigour, honour and determination. I do not blame those in the Labour party for being in favour of these kind of restrictions: because they are socialists, they do not want people to make a profit and they want to regulate every aspect of people’s lives. That is fair enough; I respect them for that, although I do not like it. What I object to is the fact that Conservative Members are being asked to give up on the free market.

[Mr Jim Cunningham (Coventry South) (Lab)]

I always have great respect for anything the hon. Gentleman has to say. I have to tell him that the UK Independence party has adopted the free market mantle now, as his party has gradually eschewed it.

[Philip Davies]

The hon. Gentleman kindly said that he had a great deal of respect for what I had to say, which is certainly more than can be said for most people on the Government Benches, so I am very grateful to him for that kind comment. It probably will not do much for his reputation within his party, but I am grateful for it, because I have a great deal of respect for him, too.

I believe in the free market and am not ashamed of doing so. I believe it acts in the best interests of the consumer. The hon. Member for Edinburgh South (Ian Murray) said he was surprised that I was not standing up for my constituents as consumers, but I am. I believe in the free market; I believe that people should have the right to sell on their ticket if they buy one and then find that they cannot go to the event or that somebody else is prepared to pay a higher price for it. I will happily take my chances with my electorate at the general election, to see whether they are happy that I look after their interests, just as he will put his record before his electorate at the general election—we shall see how we both get on.

The Minister glossed over the fact that the Government have done a complete U-turn on this issue. I do not know whether she is embarrassed about that or not, but I would be if I were in her shoes.

[Mr Christopher Chope (Christchurch) (Con)]

I am surprised to hear about the extent of the U-turn. Can my hon. Friend explain why there has been such a U-turn? Surely the Government are normally consistent—or try to be consistent—from one week to the next.

[Philip Davies]

I congratulate my hon. Friend on keeping a straight face when he said that, but it is not for me to explain it. I have certainly kept my position consistent, and I have to congratulate the Secretary of State for Culture, Media and Sport on maintaining a consistent position on these issues. I can only presume that the interference of our Liberal Democrat coalition friends in the Department for Business, Innovation and Skills has led to this about-turn.

We have an issue here, because the Minister seems to be arguing that nobody in the secondary market has anything to worry about and that their industry is going to thrive, prosper and flourish, yet all the sporting bodies and events organisers, and some of our hon. Friends, are cock-a-hoop about this. They are not cock-a-hoop because they think the secondary ticketing market is going to thrive and prosper as a result of this Lords amendment being accepted; they are cock-a-hoop because they think the exact opposite will happen. I have to congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson), who has been very persistent on this issue, and my hon. Friend the Member for Hove (Mike Weatherley). They obviously knew what they were dealing with in Liberal Democrat Ministers; they knew that they were always in the game for a U-turn whenever the Lib Dems were involved, and I congratulate them on their industry and initiative in that regard.

The question nobody has asked is why are the sporting bodies and events organisers so keen for the full details of the ticket—the row number, the section number, the ticket number, the seat number and the whole lot—to be published online? Let me give hon. Members the answer. They are so desperate to have that information so that they can see who bought the ticket, cancel the ticket if it gets sold on to somebody else, blacklist the person involved and prevent them from ever buying a ticket in the future. The only reason they want this information is so that they can use that information to stop this market.

The Government have said that these bodies will not be able to do that—the law will say they cannot do that—but I would like to know from the Minister who is going to police that? When somebody turns up to an event with a ticket bought from a secondary ticketing site and the event organiser says, “Sorry, I’m not going to let you in. We don’t like the look of that ticket. We saw it in the secondary ticketing industry”, who is going to be there from the Government to say, “No, this chap should be allowed into this event”? Nobody will be there. That person will be sent away and never get to see the event they wanted to see—the Government will have let them down. Even if the person went to court and won the case, they would still have not got to the event they particularly wanted to see. It is an absolute con if consumers think this will protect their interests when they buy a ticket from the secondary market. The sporting bodies know it and the hon. Members here who have been agitating for this measure know it, and that is why the sporting bodies and the events organisers are so keen to have this information. The Minister says that people cannot be blacklisted, but who is going to police that? Who is going to stop it? What resources are the Government putting in to make sure that does not happen? The answer is none. Basically, there are just warm words. The Government are repeating what they did on immigration, which is making a promise that they know they are in no position to keep. It is that kind of thing that brings politics into disrepute.

The Minister said that consumers could now have confidence in the market, but where is the evidence that consumers do not have confidence in the secondary ticketing market? Consumers have confidence in the secondary ticketing market, but the sporting bodies and the big event organisers do not. If people did not have confidence in it, they would not be buying tickets there in the first place. The problem for these big bodies and these multi-millionaire music organisers is that too many people do have confidence in the secondary ticketing market, which is why they want to damage it. That is why we should reject these Lords amendments this evening.

--- Later in debate ---

[Mr John Redwood (Wokingham) (Con)]

Will my hon. Friend give me some idea of how much damage might be done to the industry during a two-year phase?

[Philip Davies]

My right hon. Friend makes a good point. The Minister argued that two years was very short. In two years’ time, the whole industry could have upped sticks and gone abroad. It may well be that my two-year sunset clause is too long. I will happily be chastised for that, but I thought it was important that we put a line in the sand. I thought that two years would give us a reasonable time to see how the legislation worked with different tournaments and different music events. It is ample time for people to consider the effects. If those people who are in favour of the Lords amendments are so confident in their arguments, they have nothing to fear from a sunset clause. If everything is fine and dandy and none of my fears comes to fruition, the Government will happily reintroduce the legislation and it will sail through because it has been shown to have worked. They do not like the sunset clause because they know that the point I am making is the real agenda behind this Bill, and they do not want to be rumbled.

Once the Bill is on the statute book, the Government think that that will be it and nobody will bother or have the courage to revisit it, and I suspect that they are right. That is why I have tabled my amendment. I understand that there may be some difficulty in having a vote on it, even though it is sensible, and I am sorry that the Government have refused to accept it. This is an unfair and unnecessary intrusion into the free market. Who knows what consequences will flow from this legislation? I shall urge my colleagues to do what they have done twice in recent times already, and vote down the Lords amendment. I shall be interested to see how many of my colleagues vote for something that they have happily voted against in recent weeks and how, as a general election is coming, they will justify their action to their constituents. I shall happily be able to tell my constituents that I stuck to my guns, that I did not change my mind and that that is why I do not want to be in coalition with these wishy-washy Liberal Democrats any more.

[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.