Consumer Rights Bill

Debate between Sharon Hodgson and David Nuttall

Monday 12th January 2015 Commons Chamber

[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.]

Consumer Rights Bill

Debate between Sharon Hodgson and David Nuttall

Tuesday 28th January 2014 Commons Chamber

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

Colleagues who remember my speech during the debate on the Queen’s Speech at the start of this Session will know that I see this Consumer Rights Bill as an opportunity to address the serious failings in the secondary ticketing market. I want to explore that opportunity in my speech today. I was pleased to hear my hon. Friend the Member for Walthamstow (Stella Creasy) agree with my views on this in her excellent speech, and I am pleased that she is drafting amendments to the Bill accordingly. I know that a growing number of Government Members also agree with me.

Many colleagues will know that I have campaigned on this issue for a long time. I secured a Westminster Hall debate on the subject only last week. I see that one of my sparring partners, the hon. Member for Bury North (Mr Nuttall)—who is often on the opposite side to me on this issue—is in the Chamber today. That debate was intended as a curtain-raiser for an inquiry that is being undertaken by the newly-formed all-party parliamentary group on ticket abuse, which I am pleased to co-chair with the hon. Member for Hove (Mike Weatherley). He is also a long-term campaigner on this issue. That inquiry is intended to inform the thinking on amendments to the Bill that could be tabled in order to enhance the rights of consumers in a market that has had precious little scrutiny thus far, despite being worth around £1 billion a year.

I hope that the Government’s timetable for the Bill will allow us to conclude our evidence-gathering in time to present that evidence to Ministers for Report stage, although, for my money, there is plenty already out there that makes the case for intervention, some of which I will skim over in my speech today. If Ministers want a more detailed case, I would be happy to send them the Official Report of the debates on my Private Member’s Bill in 2011 and of last Tuesday’s Westminster Hall debate.

Like all markets, the secondary ticketing market serves a purpose. It meets a need, and that need is for people who have bought tickets for an event they can no longer attend to sell on those tickets, and for people who decide late that they want to go to an event to purchase tickets nearer the time. However, the refusal of successive Governments to get involved in this issue means that the market has moved far beyond simply performing that role, and it is now fundamentally failing consumers.

If anyone needs proof that these secondary ticketing websites are not about legitimate fans selling tickets they cannot use, they need only watch what happens on the day that tickets for a major sporting event, concert, or stage show go on sale. Within minutes—sometimes even seconds—an event or series of events for which there are thousands of tickets completely sells out on the official market, only for thousands of tickets to appear instantaneously on the secondary market at a significant mark-up. Nobody buys a ticket at 9 o’clock in the morning, only to realise at 9.5 am that they cannot go to the event. Those are tickets that are harvested in vast quantities, by fair means or foul—the foul means involve the misuse of computers or back-channel dealing—and then either dumped or drip-fed on to the secondary market for profit by industrial touts.

Just last week, the BBC highlighted the resale of state-subsidised theatre tickets at the Donmar Warehouse and the National Theatre for up to 10 times their face value. Those tickets are rightly subsidised to increase access to the arts, but those arrangements are being exploited by faceless individuals who are pricing out the very people the tickets are supposed to be for. The same happens with art tickets—the Da Vinci exhibition in 2012 and the David Bowie exhibition last year are prime examples. This applies to more commercial enterprises as well. The last big example of that was tickets for the Monty Python reunion being snapped up and resold at eye-watering mark-ups within minutes.

I do not know whether the Secretary of State for Business, Innovation and Skills is a fan of the Arctic Monkeys—it is not exactly ballroom dancing music—but that band has done more than most to try to stop touts cashing in on its hard work. Even it cannot stop the practice, however, despite trying to do so and despite doing nothing to encourage it, as some bands and promoters are accused of doing. If the Secretary of State wanted to see the Arctic Monkeys at Finsbury park in May, the minimum he would have to pay for a ticket on the secondary market would be double its face value. On one of the websites, I counted seven pages of listings, with some entries allowing up to 10 tickets per applicant.

This is not about random gig-goers; this is large-scale manipulation of a market, and an exploitation of copyright and intellectual property by individuals who put nothing into the industry that they are capitalising on. It is a parasitic market that is now out of control. In many cases, the practice severely undermines the strategic objectives that are factored into ticket pricing decisions, such as the need for artists or sports to develop long-standing relationships with fans or, as in the case of National Theatre and exhibition tickets, access to the arts.

More importantly for me, this practice is obviously bad for consumers. Many never get a chance to buy a ticket at face value, and if they can bear the cost of going to the secondary market, they do not know who they are buying from or whether the ticket will be genuine or still valid, as event holders have the right to cancel tickets they identify as having been resold. They cannot even be sure whether the ticket was ever available on the primary market at the face value printed on it, as more and more event-holders try to cash in on the secondary market by directly allocating tickets to it, passing themselves off as fans selling to fans so as not to damage their reputation with fans.

The report from Operation Podium, the Metropolitan police unit set up to monitor crime related to the Olympic games, shows that the complete and intentional lack of transparency in the market creates a front for fraud and large-scale money-laundering. The market is therefore attractive to organised criminal networks, which are of course more likely to use illegal means such as botnets to harvest genuine tickets, making it even harder for consumers to buy tickets at face value. The report, “Ticket Crime: Problem Profile”, clearly states:

“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.”

Those are not my words but those of the Metropolitan police report.

I hope that the Government will have heard the excellent exposé that Radio 4’s “You and Yours” produced in conjunction with ticketing expert Reg Walker last summer, which uncovered a large-scale fraud perpetrated through the main secondary websites by their so-called power sellers, whose privileged status allowed them to do that. This was able to happen precisely because of the opaque nature of the market and the way in which those websites operate.

What better way of addressing this kind of problem than through the Consumer Rights Bill? At the very least, the Government need to ensure that there is a right to transparency. After all, there are very few markets in which we think that it is fine not to have at least some basic knowledge about who we are buying from. To ensure that consumers have the information they need to make an informed choice, these websites must ensure three things. First, they must ensure that all ticket listings display the face value, and seat number where appropriate, of the tickets being purchased. That would prove that it was a real ticket that was already in existence.

Secondly, websites selling tickets that they have acquired themselves, or that have been directly allocated to them by an event-holder, must disclose that clearly to buyers, instead of passing the tickets off as being sold by fellow fans. Thirdly, individuals selling tickets via the websites must be able to provide proof that they actually own the ticket. When we buy from eBay or Amazon, we are at least able to see a profile of the individual or company we are buying from. We can see what they have sold in the past, and what other consumers are saying about them. The secondary ticket market could learn a lot from that approach.

Those measures would cover the right to information, but there must also be a right to recourse when the market lets consumers down. As I demonstrated earlier, the way in which the market works at the moment is allowing fraud to be perpetrated under the anonymity that the secondary websites offer to sellers. When someone turns up at a venue and finds that they cannot get in because they have been sold a fraudulent or invalidated ticket—or a ticket that has rightly been cancelled because it has been resold without permission, in contravention of its terms and conditions—it is not just the price of the ticket that that person loses.

[Mr David Nuttall (Bury North) (Con)]

The hon. Lady has mentioned the word “fraud” twice now. If a fraud has been committed, does she not agree that a crime will have been committed and is therefore actionable by the police as a crime?

[Mrs Hodgson]

I do agree, but people who report fraud or illegal activities to Action Fraud are finding that the offence is not being taken forward. Perhaps it is because it is seen as a minor fraud or a minor criminal offence. The Metropolitan Police have recommended that we pass legislation to ensure that we take forward such offences as criminal activity. We need to put such a measure in the Bill so that we can follow their recommendations.

A new report by UK Music on music tourism and its value in our economy calls on the Government to tackle the problems of the secondary market. It says that people who travel from one country to another or from one end of the country to another for the sole purpose of going to a gig or seeing a show incur substantial costs, such as those for travel, airfares, accommodation and subsistence. Consumers who are sold fake or invalid tickets should not expect to have just the cost of the ticket refunded promptly. That guarantee, which they actually pay for as part of the service charge that is slapped on the tickets when they buy from these sites, is not always honoured judging by some of the stories that people have sent me over the years. Consumers should also have the right to be able to reclaim all of the associated costs they have incurred where they can be proven with receipts.

Such measures would not prevent the secondary market from functioning, but it would ensure that it is focused on the rights of consumers, rather than on the rights of a handful of industrial touts who want to make unlimited amounts of money off the hard work and investment of others. Personally I would like to go even further, and allow rights holders properly to protect their tickets from being resold without authorisation. I hope that a future Government would look more favourably on such a measure than the current Government do.

It is ludicrous that the Government have ignored the calls of the Rugby Football Union and England Rugby 2015 to ban the unauthorised resale of world cup tickets as they did for the Olympics. I hope that when the world cup comes around, our streets are not littered with those who have, in all innocence, bought counterfeit tickets, because they are being sold all over the place and are available from unofficial outlets, and fans have not been able to tell the difference.

Given that two of the four secondary ticketing platforms are already listing tickets for the final and for numerous other games and were doing so as far back as December, despite the fact they do not go on general sale until October, there is clearly a question about whether every ticket that is listed on those sites actually exists. However, the best should never be the enemy of the good. The measures I propose are very much in keeping with the spirit and intentions of this Bill, and will be widely supported by the live events industry and consumers alike. I hope that Ministers and other Members will look on them favourably—perhaps they can be incorporated into the Bill before its later stages—and take action to put consumers of live ticketed sporting and cultural events first and to tackle once and for all the parasitical ticket touts who prey upon them.

Ticket Abuse

Debate between Sharon Hodgson and David Nuttall

Tuesday 21st January 2014 Westminster Hall

[Mrs Hodgson]

That is exactly the point that I want to expand on. We all agree that the secondary market can serve a purpose—if we have tickets to an event that we thought we could go to, but then find that we cannot attend because of a change in work patterns or whatever—but the exponential growth in online resale that we have seen since 2008, with major players coming from America to get a slice of the growing pie, proves my “green light” point. If the brakes were on before 2008, while we were waiting for the decisions, they were certainly smashed to pieces afterwards, and people in the industry have seen touts making more and more money from their work and investment without putting anything in. After all, when a ticket sells for double its face value, the tout makes more money than everyone involved in putting on the show.

People in the industry tried unsuccessfully to convince the Government and Parliament to do something about the situation. Having failed in that attempt, they decided—reluctantly, in my opinion—that if someone was going to make that money, it might as well be them. Some are doing so openly by selling premium packages or appointing a secondary website as an official partner, as Jessie J did recently. Some, however, are doing it through back channels because they do not want their fans to know that they are effectively being ripped off by the artiste they admire, as that would inevitably hurt their relationship.

The practice of allocating blocks of tickets directly to the secondary market was exposed by a “Dispatches” documentary in 2012, which I took part in. I hope the Minister watched it—I have a copy in my office that I can pass on to her if she did not. Such under the table dealing is a direct consequence of successive Governments failing to do anything to protect fans. At the very least we need to bring those dealings out into the open.

It is not as if there is no precedent for protecting fans, as we protected Olympic tickets from being exploited by touts. I am aware that doing so was a condition of being granted the games by the International Olympic Committee, but I would like to think that that would have happened anyway, given the national significance of the games and the obvious security considerations.

I note from the excellent Library debate pack—I put on record my thanks to our exceptional Library researchers for putting it together in such a short space of time—that the Scottish Parliament has passed legislation protecting tickets for the Commonwealth games, which is welcome. Colleagues will know that the unit set up to monitor Olympic touting and other crimes associated with the games, Operation Podium, also looked at the wider secondary market in the years it was in operation—from 2005 to 2013. It estimated that that market was worth £1 billion, and its initial findings resulted in the fine for touting Olympic tickets being quadrupled. I sat on the Public Bill Committee that considered the legislation that put that in place, and during our proceedings, a representative from the Metropolitan police told us that the people they were tracking who were trying to tout Olympic tickets were the same players who control most of the inventory on sale on a day-to-day basis. During our questioning, I nearly coaxed him into agreeing that action was needed to regulate the wider secondary market, but he stuck to his brief very professionally.

I might not have been successful on that occasion, but the recommendations in the report on ticket crime that Operation Podium published shortly before it was disbanded last year could not have been clearer. “Ticket Crime: Problem Profile” found:

“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.”

Its findings led the unit to conclude:

“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.”

The unit therefore recommended:

“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.”

The Minister’s predecessor, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), told me repeatedly that if we provided evidence of market failure he would reconsider his position; I refer Members to Hansard, volume 551, column 997W from 25 October 2012, and volume 542, column 66WH from 13 March 2012. The latter refers to the long-awaited report from the Office of Fair Trading, which I hope we will see later this year.

Even given the damning report from Operation Podium, the Government have still refused to engage on how to protect fans. I hope that the new Minister will differ on that and agree with me and other colleagues that, when the police say that a market needs to be cleaned up because it is acting as a front for organised crime and fraud, we should probably listen to them.

If we needed confirmation that the secondary market is allowing fraud to be perpetrated, we got it in July last year, when it emerged through an investigation by Radio 4’s “You and Yours” programme, working with security expert Reg Walker, that thousands of counterfeit tickets had been sold through the major secondary market platforms. Those platforms tell people that tickets are guaranteed because sellers receive their money for a ticket only once the buyer has been to the event without incident. That would be the case if someone were to try to shift a few tickets for an event they could not attend or if they were small-time casual touts. However, the fraud could be perpetrated because the restriction does not apply to the big players, otherwise known as power sellers or brokers—although I would call them industrial touts.

The secondary platforms compete for inventory from those major players and the commissions from their sales, so they bend over backwards to win their business. That means preferential rates and premium services, and even the odd party, with drinks and networking opportunities; but importantly it also evidently means disbursing money paid for tickets before those tickets have been verified by the end user.

Unscrupulous individuals—they would be called “gangsters” or “organised criminal networks” in common parlance—were able to establish themselves as power sellers by selling large amounts of genuine stock, although we do not know from where they got it. When they then carpet-bombed the market with false tickets, they had ensured that they got their money within days of the sale. By the time the reported thousands of fans were knocked back from concerts by the likes of Beyoncé and One Direction, those criminals were long gone.

I am not saying that the four major secondary platforms that were stung by that fraud were complicit in any way, although my understanding is that they did not exactly run to the police about that criminal activity, probably because it would harm their reputation; it was an issue of damage limitation. However, the fact that their processes allowed the fraud to happen shows that the market is not foolproof—or gangster-proof—and desperately needs reform and transparency. I have heard it argued that if those websites did not exist, all those fans would be out of pocket, whereas now they will be reimbursed eventually, if they are tenacious. However, without those websites, with their aggressive marketing and their promise of safe transactions, the criminals or criminal organisations would not have been able to sell nearly as many counterfeit tickets in the first place.

The Minister will be well aware of the trouble that rugby union has had with the resale of tickets for high-profile games. Some have credited the Rugby Football Union with driving viagogo out of the country to the safety of Switzerland, after it won a High Court battle to be told the identities of people who had broken its terms and conditions by reselling tickets to high-profile games. Of course, it is only the company address that has moved abroad; the business retains an operation in London and trades here as before. However, we have to ask ourselves, why did viagogo run away if it has nothing to hide?

Like many national sport governing bodies, the RFU is conscious of the need continually to feed the grassroots and drive participation at every level of the game. That is not all altruistic; if the grassroots are neglected, every level of the game suffers very quickly—gate receipts fall and talent does not come through, meaning that our clubs and national teams are not as competitive. That then feeds back again, damaging interest in the sport.

For that reason, the RFU ensures that a significant number of tickets for high-profile games are distributed to the 2,000 or so rugby clubs across the country. Indeed, it even announced before Christmas that that would include at least one ticket per club for the rugby world cup final in 2015. The RFU knows that it could get much more for those tickets—indeed, for all the tournament tickets—on the open market, but that is simply not the point. It wants to ensure that not just wealthy individuals and corporate buyers can afford to see the best rugby teams and players in the world.

The RFU wanted the identity of those reselling tickets to be known to ensure that they contribute to the long-term fostering of grass-roots participation, instead of making some individual a nice wad of cash. That is why the RFU and England Rugby 2015 have continually asked the Government to legislate to protect tickets for the 2015 rugby world cup from being touted. It is disappointing that, so far, the Government have refused to do that.

I hope that when the World cup comes around, our streets will not be littered with counterfeit tickets bought innocently from people who were selling them all over the place, or because they were available from unofficial outlets and fans could not tell the difference from legitimate tickets. The World cup organisers must do as much as they can to limit the number of tickets that fall into the hands of touts and to educate consumers about the official resale mechanism through which they will be guaranteed genuine tickets, as happened for the Olympics.

I am sure the Minister will be aware that touts cannot be blocked completely. She will be aware, from the last Department for Communities and Local Government questions, that if someone is desperate to secure a ticket now for the World cup final, they could do so today, on at least one of the secondary websites, for around 10 times the face value of one of the lowest priced seats. Some of the posh seats in the west lower tier would set them back almost £18,000 a pair, and that is despite the tickets not yet having gone on sale to the public; that will not happen for a further eight months. The touts obviously know that they will be able to obtain tickets, so they are selling them in advance at huge profits.

Does the Minister recognise that the situation is a direct consequence of her Department’s choosing not to get involved? The problem does not apply only to rugby; the governing bodies and major event holders in cricket and tennis have been at pains to try to enforce the non-resale clauses that they put on their tickets, for much the same reason. Alienating fans with ordinary means from prestigious events means risking the loss of their continued involvement with and patronage of the sport.

Top-flight football is the one sport in which there has historically been some protection for fans, but legislation introduced in 1994 to tackle hooliganism is increasingly being circumvented by people doing deals and accepting money from the secondary websites to authorise them to resell their tickets. That loophole must obviously be closed immediately, and there are growing calls from fans—including Spurs fans, as reported in local papers yesterday—in favour of that happening.

The websites are always at pains to point out that it is individuals, not them, who are selling the tickets. In that case, is it all right for someone to buy a season ticket for a premiership club, never to attend a match, and to make a fortune reselling their 19 home tickets on an “authorised” secondary market, when it would be illegal for a genuine fan who cannot go to one match to sell a single ticket at face value to their mate?

I asked in a written question a few months ago what conversations the Department had had with the football world about this issue, and the answer was “none”. I hope that the issue is now on the Minister’s radar, that she will give us her opinion on the practice and that she will have conversations with the football world. Does she think what is happening is in the spirit of the original legislation and will she close the loophole?

When the hon. Member for Hove secured a short Westminster Hall debate on this issue back in March 2012, the hon. Member for Chatham and Aylesford (Tracey Crouch) intervened on him and perfectly distilled the problems in the market. She asked:

“Does my hon. Friend agree that we should be putting the fan, not the salesman, at the centre of the ticketing process for live music and other events?”— [Official Report, 13 March 2012; Vol. 542, c. 59WH.]

That is exactly what we should be doing. We should put our constituents first, closely followed by the legitimate and important businesses that employ them and generate wealth for the UK. We should put last those who seek only to exploit. We can do that by legislating to make the secondary market more transparent and making people who profit from it more accountable to both the end consumer and those who own the intellectual property, on the back of which they are getting rich.

The all-party group will hear evidence on the best way of doing that. The intention is to table new clauses to the Consumer Rights Bill when it comes before the House later in the year. I will not prejudge the results of that process and the ideas that it will no doubt turn up. However, I suggest that the following is the minimum the Government can do to shut me and others up. Websites facilitating the unauthorised resale of event tickets should be made to reimburse a buyer for all costs incurred when tickets purchased through their service are found to be fraudulent. That should include all fees involved in purchasing the ticket, travel to and from the venue, and any accommodation and subsistence costs when evidence can be provided.

[Mr David Nuttall (Bury North) (Con)]

Does the hon. Lady fear that if she introduced that proposal it would just send those websites offshore?

[Mrs Hodgson]

They are already on the internet. Viagogo’s head office is in Switzerland, so they are offshore.

[Mr Nuttall]

How does the hon. Lady propose that the law should be enforced?

Sale of Tickets (Sporting and Cultural Events) Bill

Debate between Sharon Hodgson and David Nuttall

Friday 21st January 2011 Commons Chamber

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

I beg to move, that the Bill be now read a Second time.

The reason for my bringing forward the Bill should be obvious to hon. Members who have turned up today, even those who have done so perhaps only to oppose it. To demonstrate the problem, I will paraphrase from an article in The Times of 25 September 2010. At 8.50 am, Rachel Still switched on her computer and waited. At 9 am precisely, tickets for a gig by Brandon Flowers in London were to go on sale. A few minutes before 9, Rachel logged on to the ticket website and began the repetitive formula for buying tickets. At 9.1 am she was told that the gig had sold out. Her friends told her that they had received the same message at 8.57 am, before the tickets were even officially released. Within minutes those same tickets were appearing on secondary websites at prices way above the £25 face value, the cheapest one being £74. A survey showed that of the 2,300 tickets sold, 616 were instantly re-advertised—more than a quarter. No doubt there would be more to follow closer to the date too, as it is common practice to drip-feed more tickets on to the market at a sufficiently slow pace to keep the prices high.

That situation plays out time and again in homes up and down the country—ordinary fans trying in vain to get tickets, only to find that they have sold out within minutes. The disappointment is then compounded when they see that the touts do not have the same problems as they do in finding large numbers of tickets. I know all this because it has happened to me and to my teenage children, and I know we are not alone.

When I first tabled the Bill, after the private Member’s Bill ballot, the media attention prompted lots of people to write to me, expressing their support for action to tackle ticket touting. They ranged from academics to ordinary fans, and all had a story to tell. The story that stood out most prominently, though, was that—

[Mr David Nuttall (Bury North) (Con)]

Will the hon. Lady give way?

[Mrs Hodgson]

Not at the moment. There will be plenty of chances for Government Members to speak. We have plenty of time, and I will give way when I have got further into the substance of my speech.

The story that stood out most prominently was that of a gentleman who used to work at a media event venue, which I will not name. He told me that it was common practice for the box office managers to cream off all the best seats to sell to touts at a mark-up of 50% before they even went on sale. Then, when the tills opened, they would simply put in the face value and issue a receipt for them all. I suspect security has improved since those days, but there is no doubt that the levels of reward on offer and the lack of regulation mean that many tickets never even reach the legitimate market at face value.

Even the big players in the secondary market recognise that, from the consumer’s perspective at least, there is a massive problem with this market. I quote Graham Burns, chairman of the Association of Secondary Ticket Agents, who said in a Sunday Times article in November:

“The ordinary fan is screwed. The decks are stacked against them. Try and buy a front-row seat at a bestselling concert at face value. It can’t be done.”

The aim of the Bill is to redress that balance—to give consumers back the power and to help event organisers choose how they want their tickets to be available and for how much.

While I initially approached the Bill from a fan’s perspective, I quickly got a better picture of the industry’s perspective as I met people who had got in touch about it, but I think the most strikingly unjustifiable part of the secondary market is the resale of charity tickets. Later in my speech I will go into some detail about the experience of the Teenage Cancer Trust, but I came across another, briefer example in The Sunday Times. Like the Minister’s boss, I too am a fan of some of Rupert Murdoch’s news output.

That example was the sale of Help for Heroes tickets. The gig was at Twickenham in September, and featured Robbie Williams, Gary Barlow and Tom Jones, who had freely given their time and names to support an incredibly worthy cause. Tickets for the event were being touted on secondary websites at an average of £106, despite the fact that the face value of an ordinary ticket was £46.75 and that the tickets clearly said on the back that they were not to be resold. The touts are earning more than the charity here, and if any hon. Member can convince me that that is right, I will happily withdraw my Bill and sit down.

--- Later in debate ---

[Mrs Hodgson]

I certainly will do so, and I will pass on all the correspondence that I have received from the senior Operation Podium officer. I do not think he would want me to name him on the Floor of the House, but he has met officials from the Home Office—I know that that is not the Minister’s Department—to discuss the issue. I am sure he would be delighted to meet the Minister and explain how things have moved on quite considerably since the then Government and Select Committee looked at them. I have used the term “green light”. The decision that my Government, and the cross-party Select Committee made was seen as a green light to the criminal fraternity to begin to exploit the whole market. I am sure that the officer would meet the Minister in a flash, because the police need to get the situation right before the Olympic tickets go on sale in March. He would be thrilled to know that the Minister wanted to meet him.

Given the large amounts of money that could be made on premium tickets for major finals, the police do not believe that the sanction for individuals caught touting tickets for the Olympics—a level 5 fine, as I mentioned—is a sufficient deterrent. As I said, many people would regard it as just an occupational hazard, pay the fine and carry on straight away selling more tickets. That issue is addressed by clause 2(6), which emphasises prosecutors’ ability to consider whether the case should be looked at by a Crown court under section 70 of the Proceeds of Crime Act 2002, so that touts know that £5,000 is not the absolute maximum that they can be fined.

[Mr Nuttall]

Is the hon. Lady saying that she has decided to restrict the offence to level 5 because of an order under the Proceeds of Crime Act? Why not a higher level?

[Mrs Hodgson]

It could be higher, but a level 5 offence is laid down in the Olympics legislation, which I have used as the basis for the legislative framework of the Bill. It was deemed an appropriate level. However, as I said, officers at Operation Podium have said they do not consider that strong enough. They would like to talk to Ministers about the current legislation and the possibility of extending it to other entertainment industries, such as those I am speaking about.

Officers have also pointed out that the mainstream secondary marketplace—the websites that consumers tend to trust, such as viagogo, Get Me In! and eBay, as we have just heard—do not prevent professional touts from selling on their websites. A member of the public contacted me on Twitter when they heard about the Bill to say that they had once received an e-mail which was obviously intended for regular sellers on one of those sites, recommending that they buy tickets for certain events from the primary retailer purely in order to sell them on through such a site.

Whether that is true I cannot be certain, but there seems no reason for that person to lie to me. If it is true, it shows that at least one of those websites actively encourages touting and sees itself more as a broker than as a fan-to-fan exchange. Many of these organisations now call themselves ticket brokers. viagogo is the only one of those sites to get in touch with me about the Bill. Unfortunately I was not able to meet its representatives, but a member of my office, Mike Forster, did. They told him that a majority of their sellers sell fewer than six tickets a year so could not be considered big operators.

That is fair enough, but I still question whether a person selling tickets to six events a year is doing so as a genuine fan who cannot go to those events. Perhaps some of them might have been unlucky, and things seem to crop up whenever they buy tickets for a gig, but I would hazard that many of them are simply amateur touts without the time and infrastructure enjoyed by some of the bigger operators. That leaves the rest of the traders who are selling tickets to more than six events a year—there can be little doubt that those people are doing it as a deliberate money-making exercise, rather than just disposing of surplus tickets.

The police officers I met also raised the issue of how some of the big operators acquire so many tickets. What they said echoed some of the reading that I have done on the subject. The more IT-literate Members among us will know what I mean by a botnet. For those who do not, it is a network of computers—maybe the ones that we all have at home—which have been infected by a virus that allows the originator of that virus to control the terminal. It is a valuable commodity for hackers. Sometimes they are hired to carry out denial of service attacks on websites, and direct so much traffic to a particular website that it buckles under the strain. Members may remember that an anonymous group used this tactic to bring down sites such as PayPal and MasterCard after these withdrew their services to the WikiLeaks website just before Christmas.

The same method can be used in conjunction with numerous credit cards and bank accounts to evade the systems that primary retailers have put in place to stop one person buying up lots of tickets. I read an article on the technology news website The Register in November, which chronicled the case of a gang of touts in the US using Bulgarian hackers to buy scores of tickets automatically to gigs such as Bruce Springsteen, as well as Broadway musicals and major league baseball games. They were eventually indicted on charges of hacking, but by that time they had been operating for seven years, selling an estimated 1.5 million tickets, earning them $25 million. That is not small change.

This practice is of course illegal, but the vast profits to be made mean that it is an attractive and simple way for professional touts to do business, and it is very difficult to detect amid the usual high levels of traffic that a primary ticketing website gets when it first releases tickets for a major event. That illustrates that fans and touts are not competing on a level playing field when buying tickets, which is why such large numbers of tickets reappear almost instantly on the secondary market. That also illustrates why it is difficult for primary ticketers to take the lead in preventing touting. They already do a lot that they should not have to do, such as limiting the number of tickets that can be bought in one go and using word-recognition software, but the problem keeps getting worse. If computer whizz kids can hack into the Pentagon and GCHQ, finding a way around security on a ticket website is child’s play.

Those involved in Operation Podium have welcomed the Bill and see it as a necessary measure to tackle the criminal and organised elements that dominate the secondary market. They know that it can be policed—a point that I am sure Government Members are ready to bring up—because they are policing it now in preparation for Olympics tickets going on sale. They know that they can police it across borders because they are doing so now. The Olympics legislation does not limit jurisdiction to processes that happen solely on British soil, because the internet allows people to get around that easily. The Bill will follow that precedent. Those working in Operation Podium know that this is the right way to go, and I hope that their professional judgement will be taken into account by the Members.

--- Later in debate ---

[Mrs Hodgson]

They should not necessarily have to raise that issue with eBay to get the money back. What is more, the charity told me last night that it does not want venues to be full of people who can afford to pay the prices that the touts charge for tickets. That is not the purpose. It wants genuine fans to come along—not venues full of elites, paying hundreds and hundreds of pounds.

[Mr Nuttall]

Will the hon. Lady give way?

[Mrs Hodgson]

No, I am going to carry on.

A large part of the fundraising activities to support the trust’s wonderful work is the running of a series of live entertainment events at the Royal Albert hall, featuring major artists and comedians who give their time for free to support the trust. Last summer, in its 10th year at the Royal Albert hall, it put on nine spectacular gigs featuring Suede, the Who, Noel Gallagher, the Arctic Monkeys, Jimmy Carr and Noel Fielding. As a big fan of talent TV shows, I would particularly have enjoyed seeing JLS, Diana Vickers and Lemar perform on the same night. I see that some Conservative Members are looking confused about some of these names. If they see me afterwards, I will certainly explain any pop culture references that they do not get. I might even be able to put together a compilation CD for them.

All these artists freely give their time—as well as that of their support crew—their energy and their talent to support what they view as a worthy cause, but it is not simply a case of artists giving up a night off. Doing a gig in London lessens demand for any other gigs in London that they might have planned close to that date. It could be that they cannot perform in London again for a few weeks or even months, so their participation is a genuine expression of their desire to help the cause. These big names could easily have done other things to earn money on the night they performed. The very fact that they are involved means that demand for tickets is huge.

Even though the Teenage Cancer Trust knows that demand for its events could allow it to sell the tickets at a higher price, it wants the events to be affordable to the average fan. As at almost all live entertainment events, tickets are sold at a price below what the market will bear, because organisers recognise the fact that the sustainable approach to putting on live events is to allow as many genuine fans as possible—and especially as many young people as possible—to attend. Quite apart from any moral or ethical consideration, that makes good business sense, building a long-lasting relationship with fans, which could not be achieved if they felt that they were being ripped off or could not even begin to get on the first rung of the ladder.

Regular-priced tickets to extraordinary events run by the Teenage Cancer Trust are put on sale with all the standard technological measures in place to combat touts. Like all other big events, they sell out in the space of a morning—sometimes in an hour or two. On the same day, without fail, hundreds of those tickets reappear on secondary websites at massive mark-up prices—well over double their face value.