Consumer Rights Bill

Sharon Hodgson Excerpts

Monday 12th January 2015 Commons Chamber

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

I beg to move amendment (a) to Lords amendment 12.

[Madam Deputy Speaker]

With this it will be convenient to consider the Government motion to disagree with the Lords amendment.

[Mrs Hodgson]

Amendment (a) was tabled by the hon. Member for Hove (Mike Weatherley) and me. It gives me great pleasure to speak in support of the new clause as inserted in the other place; it follows on from new clauses 18 to 21, which I, the hon. Member for Hove and others tried to add to the Bill on Report. Those new clauses were based on the report produced by the all-party group on ticket abuse after our inquiry into the secondary market and what needs to change within it.

It is worth pointing out that all these interventions—the all-party group’s report, the new clauses in the Commons and, latterly, the new clause passed in the other place—have been completely cross-party. I would like to place on the record my thanks not only to Opposition Members, but to other hon. Members—in particular the right hon. Member for Bath (Mr Foster) and the hon. Members for Hove, for Selby and Ainsty (Nigel Adams), for North West Leicestershire (Andrew Bridgen) and for North East Cambridgeshire (Stephen Barclay). They have been big supporters in the all-party group and in working on the Bill during its passage through the House.

In the other place, the push was very ably led by former sports Minister Lord Moynihan and by Baroness Heyhoe Flint, both Conservative Members, as well as by Lord Clement-Jones, the Minister’s party colleague, who has been one of Parliament’s foremost campaigners for our live music sector. It was also strongly supported by my noble Friend Lord Stevenson and by many others from all parties and none, including Baroness Grey-Thompson. It is safe to say that the Minister’s counterpart in the Lords had a pretty rough time in those debates. If the Government had any doubt in their mind that they were on the wrong side of the argument when they rejected these amendments in the Commons last summer, their defeat in the Lords should have confirmed that for them.

[Philip Davies (Shipley) (Con)]

Will the hon. Lady give way?

--- Later in debate ---

[Mrs Hodgson]

I certainly will not give way to the hon. Gentleman at this stage. I am sure that he plans to speak, and we have debated this so often that I cannot think that there is anything he would add to the argument today that I have not heard already. He will get his chance and I will listen to him then.

[Philip Davies]

This is supposed to be a debate.

[Mrs Hodgson]

The hon. Gentleman can debate when his time comes.

The concession that the Minister offered in this place—tweaking the guidance to a set of regulations to make it clear that secondary ticketing platforms should abide by them—has proved completely ineffective. Those regulations have been in place for more than six months, and the secondary websites have completely ignored them. It is time for real action, and that is what proposed new clause 33 would provide.

What we are asking for is not exactly radical. Any consumer in any market would expect to know who they were buying from, exactly what they were buying and whether a product came with a risk that they would not be able or allowed to enjoy it.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Lady give way?

[Mrs Hodgson]

Not at the moment.

What we are asking for would not put secondary ticketing platforms out of business; if anything, it would increase consumer confidence in them. What we are asking for would not drive legitimate resale underground, but it might drive some illegitimate resale underground. Why would the Government and this House want to take decisions that benefited illegitimate enterprise? If that part of touting is driven underground, then it will be nowhere near as successful as it is now, given that it is able to hide behind the legitimate veneer of platforms that are supposed to be about fans selling unusable tickets to fellow fans. What we are asking for would not leave consumers who bought a ticket they can no longer use out of pocket if the event organiser does not allow refunds; there are sometimes very good reasons for many of them not doing so.

[Mr Redwood]

rose—

[Mrs Hodgson]

Let me make this extra clear, because that might clear up some of the points that Members are trying to make—if not, I will let them intervene. We have tabled a small amendment to the clause that the Government could easily adopt today to allay their own fears. This is simply about transparency—that is all. Who could argue against creating a more transparent marketplace other than those who benefit from the murkiness and muddiness that we have at the moment?

[Mr Redwood]

I want to clarify the hon. Lady’s point about the event organiser’s right to cancel tickets. Under her amendment, in which conditions could the event organiser cancel a ticket if it had been resold?

[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.

[Pete Wishart (Perth and North Perthshire) (SNP)]

May I congratulate the hon. Lady on the diligent way in which she has approached the issue and her determination to get justice for music fans, which is what we are talking about? UK Music’s music tourism forum found that live music generates £2.2 billion. Surely we have a right to expect that live music fans are protected and not ripped off.

[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.

[Philip Davies]

It is always a pleasure to follow the hon. Member for Washington and Sunderland West (Mrs Hodgson). Her arguments have not got any better in all the years we have been going around the houses on this matter, but I admire her for persistence in flogging this particular dead horse.

There have been a number of reports on secondary ticketing, and the hon. Lady said that the Government have listened to no one apart from certain companies. Perhaps they have listened to the Select Committee on Culture, Media and Sport, on which I serve, which looked into the issue and came up with a report that was unanimous, including among Opposition Members, showing that the market was legitimate and worked in the best interests of consumers. When a former Labour Minister, the right hon. Member for Barking (Margaret Hodge), came to give evidence to the Committee, she made it abundantly clear that she believed that as well, so I will be interested to see how she votes on the amendment. When the Office of Fair Trading looked into the matter, it reached the same conclusion. I am afraid that when the hon. Member for Washington and Sunderland West says that only a few big companies say that the market works in the best interests of consumers, she knows full well that she is talking absolute cobblers.

--- Later in debate ---

[Nic Dakin]

I will take further interventions later. Let me first describe my constituents’ experiences in relation to the Paul Weller concert, which is to take place on 17 March 2015. Some arrived early to join the queue at the Baths Hall ticket office, while others applied by telephone and via the website, but many failed to obtain tickets. Shortly afterwards, tickets cropped up on secondary sites. Today I looked into where I could buy a ticket for the event, and how much it would cost me. I discovered that it would cost me £102 to obtain one through a secondary site. According to my maths, that is a mark-up of £64 for someone in the system. It would be better to allow more of my constituents to have access to the tickets locally, or to put money into the local community via the venue, or to give more to the performers.

[Mrs Hodgson]

What that example demonstrates—Conservative Members refuse to see this for some reason—is complete market failure. A Select Committee and the Office of Fair Trading looked into the matter, but what Conservative Members fail to mention is that they did so 10 years ago, and because they did not act then, the market is now skewed to the extent that my hon. Friend has described. Is that not exactly why, 10 years later, we need to do something, and would not the amendment solve the problem that he has highlighted?

[Nic Dakin]

With the benefit of her knowledge of this matter, my hon. Friend has made her point extremely well. As she says, what we are seeing is market failure, and it is interesting to note that the main evidence base that was drawn on by the hon. Member for Shipley is many years old.

--- Later in debate ---

[Mrs Hodgson]

It was tickets for the Take That reunion tour that garnered my interest in this topic. I want to place on the record my gratitude to my hon. Friend for the leadership that he showed on this issue before anyone else in the House did. Others have picked up the reins now that he has led the way in getting us to where we are today.

[John Robertson]

I think my hon. Friend might be over-egging the pudding a bit, but I am always grateful when people recognise that someone has done something, particularly in this place.

--- Later in debate ---

[Mr Nuttall]

So we have to sell the tickets cheap so that people can be conned into paying over the odds for the T-shirts and the CDs. That is the reality.

The other argument is that this is all about transparency; that a person needs to be able to see that they are in a certain row, seat and place in the stadium. Well, people are not stupid. They know that if they buy a ticket without that detailed information, there is a risk that they might end up sitting behind a pillar and have a restricted view. People do not need any further legislation to help them make up their minds about the risks involved in buying tickets. They know that if they buy on the secondary market, there might be risks, but there will be much greater risks if they go underground. Under the current market, we have operators who run professional businesses, which have been going for a number of years without any problems. Everybody uses them every day of the week. Okay, so a person might pay more than the face value of the ticket, but that is the operation of the free market. I come back to the central point: such operators would not even exist if the vendors sold the tickets at a higher price in the first place. They know when they sell those tickets on day one that they will be swept up and sold at a higher price. In most cases, they turn a blind eye to it because all they are interested in is selling the tickets, getting the money in the bank, and forgetting about the problem.

[Mrs Hodgson]

That is utter rubbish and so not true. People involved in cricket, rugby, tennis and music have written to the Minister and made this case. It is not the case that they are not bothered as long as they are sold out. They set the price for a variety of reasons, including making it affordable for the genuine fan. It is so disingenuous of the hon. Gentleman to say that the clubs do not care as long as the tickets are sold out.

[Mr Nuttall]

Interestingly, I was happy to give way to the hon. Lady, but she did not give way when I wanted to intervene, but we will leave that aside. If the large organisations that run these sporting bodies put half a mind to it, there would be many ways in which they could ensure—[Interruption.]

--- Later in debate ---

[Jo Swinson]

I thank the right hon. Gentleman for making that point.

[Mrs Hodgson]

This proposal is in no way about making 14-year-olds vulnerable online if they want to sell their ticket. On eBay, people who buy and sell have an identity: we know who we are buying from in the sense of whether they have sold one of something or 1,000 of something. All sorts of mechanisms could be in place to keep the person who is selling on the ticket safe. The Minister is wrong to suggest that this is about allowing event organisers to cancel tickets—that is not the intention at all. It is about transparency. Very few event organisers put “Not for resale” or “Non-transferable” on their tickets. The reason why some do is to try to protect the tickets, but they would not need to if we had this transparency.

--- Later in debate ---

[Jo Swinson]

Much of this information already has to be provided under the consumer contracts regulations, and that is absolutely fine. However, amendment 12 goes beyond that—for example, in requiring individuals to give their name. I do not think that people would wish to run the risk that it ended up being unenforceable, but unfortunately that is the legal situation.

The amendment tabled by the hon. Member for Washington and Sunderland West (Mrs Hodgson) talks about stating the face value on the ticket. I understand what she is getting at, but this is not a particularly helpful concept to use in legislation because the face value is not clearly defined. A ticket does not necessarily have just one value—there may be delivery and administration charges, and the seller might not know which of those needed to be included in the face value. If the fan selling the ticket got that wrong, the ticket could end up being cancelled without their knowledge. The value stated on the ticket might not be what the fan paid because of the fan club or early-purchase discounts that have been discussed. People would not want consumers to lose money when they cannot attend an event, and the face value would not always cover what the consumer had actually paid.

There is a more substantive issue of principle. Is it right for Government to tell consumers that they cannot sell items that they have bought second-hand at above the price that they paid for them? If I buy a book for £4.99 and then a very popular film is made of it and a friend offers me £10 for the book, why should the Government get involved and say that it cannot be sold on?

Perhaps unintentionally, the amendment suggests that it is acceptable for an event organiser to cancel tickets that have been sold for above face value. Many hon. Members have addressed the issue of terms and conditions, and some have said that organisations should be able to cancel such tickets, but that would not necessarily always be a fair term. Under the Unfair Terms in Consumer Contracts Regulations 1999, it would be up to a court to decide on a case-by-case basis, but it may not always be a fair term.

There are problems in the market—as is the case in any market—which is why we have listened and are taking action. We agree on many of the issues relating to consumer information, including consumers not knowing where to go to get redress when they have a problem with a resold ticket. Consumers sometimes raise concerns with event organisers when they should approach the online marketplace where they bought the tickets. Of course, that can be inconvenient and frustrating for both the organiser and the fans.

There is also a problem with bulk selling and the people who have been referred to as bedroom touts. Like the organisers, I am not comfortable that there are people who buy tickets as if they were real fans, but with the sole intention of reselling for a profit. I am, therefore, pleased to announce various actions that we have taken. We have been working closely with the secondary ticket marketplaces and continue to have constructive discussions with them and the event organisers.

The online ticket marketplaces have made a range of commitments, as outlined in the letters that have been placed in the Library of the House and are available from the Vote Office in the Lobby. They have committed to providing further information and transparency, to make sure that consumers have appropriate information. The commitment covers much of the information that Lords amendment 12 would require, but it will not breach EU rules, result in unintended consequences for privacy and fraud, or give event organisers the opportunity to cancel tickets put up for resale.

Secondly, the marketplaces have confirmed their commitment to consumer protection. When consumers have a problem with a ticket they have bought on an online marketplace, they should have access to redress. The marketplaces have set out the guarantees they provide to users and how they work to protect consumers. Thirdly, the marketplaces have committed to ensuring that consumers know where to go to get redress by providing the information prominently on their websites. Alongside those common commitments, they have committed to a range of different improvements specific to their individual sites. They are all welcome commitments.

In addition to the action taken by industry at a practical level, we want to ensure that the Government address the issues with an evidence-based approach. The Department for Culture, Media and Sport has today launched an independent review of the effectiveness of the current law—and, indeed, what can be done to improve it. The review will survey enforcement of the current consumer law as it applies to online marketplaces as facilitators of transactions in tickets, and it will assess the challenges of enforcement of that law. We invite the review to suggest how that enforcement could be improved. That will include looking at how to tackle bulk selling, which has been raised by many Members today, and how to effectively enforce the law against traders impersonating consumers in order to evade consumer law.

I have written to trading standards to gather evidence on what more can be done to enforce consumer law as it applies to buyers and sellers of tickets. That will complement the DCMS review. To respond to the hon. Member for Eltham (Clive Efford), I have not yet received a response from trading standards, but I will, of course, keep the House informed.

Given the ongoing commitments to tackle the genuine issues, I urge the House to reject Lords amendment 12 and the amendment to it, and to welcome the package of measures that I have announced.

[Mrs Hodgson]

We have had a wide-ranging debate. If we were to apply the law of averages to the question of which side of the argument the coin would fall, I think it would fall on the side of the Opposition and the hon. Member for Hove (Mike Weatherley) who tabled amendment (a). The debate has been strongly in favour of transparency, apart from the contributions of two hon. Gentleman in the back row—the hon. Members for Shipley (Philip Davies) and for Bury North (Mr Nuttall) —who have been the only Members to put up any argument against that, albeit unconvincingly.

I have listened to what the Minister has had to say and I have seen the lobbying from the four secondary marketing companies. They have obviously spent a fortune on lobbying and I am sad to say that I heard a lot of their arguments in the Minister’s speech. From their point of view, all the money they have spent on lobbying has worked, but the House is not convinced.

There is demonstrable market failure. When the House, the Select Committee and the then Minister looked at the issue 10 years ago, they said we would need to see such failure before requiring legislation. We have now demonstrated that that market failure exists. I know that the Minister has written, very late in the day, to trading standards. I wrote to trading standards years ago and the response I received was that there was no evidence. Transparency would provide the evidence of what is happening.

The four letters from the secondary marketing companies say, at long last, that they will abide by the regulations that the Minister’s colleague, the right hon. Member for Cardiff Central (Jenny Willott), announced last year, but they have already had more than six months to abide by those regulations. I wrote to them to point out that the regulations are now on the statute book, but they have carried on regardless. I have no faith that they will do anything different. That is why we need to legislate. There is cross-party support for that and I hope that Members on both sides of the House will support us in the Lobby. I know that when the Bill goes back to the House of Lords our proposal will have cross-party support, ably led by Lord Moynihan, Lord Clement-Jones and Baroness Grey-Thompson, as well as our own Lord Stevenson. I will push the amendment to the vote.

Question put.