Consumer Rights Bill

Debate between Sharon Hodgson and Mike Weatherley

Monday 9th March 2015 Commons Chamber

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

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

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

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

[Mike Weatherley (Hove) (Con)]

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

[Mrs Hodgson]

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

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

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

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

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

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

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

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

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

--- Later in debate ---

[Mrs Hodgson]

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

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

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

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

[Mike Weatherley]

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

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

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

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

Consumer Rights Bill

Debate between Sharon Hodgson and Mike Weatherley

Monday 12th January 2015 Commons Chamber

[Mrs Hodgson]

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

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

[Mike Weatherley (Hove) (Con)]

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

[Mrs Hodgson]

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

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

Secondary Ticketing

Debate between Sharon Hodgson and Mike Weatherley

Tuesday 13th March 2012 Westminster Hall

[Mike Weatherley]

I could not agree more. I will come on to that point in a moment—it is on an industrial scale now. The intention of the person buying the ticket is important. If the intention is to make a profit, I argue that that is to the detriment of the industry.

It can be argued that there are occasions where intermediaries, such as agents, or, in this example, ticket touts, provide a supply and demand service. However, in the case of exceptional excess demand for a finite product, supply cannot be increased to match demand. With only a finite number of hours available to the performers, the free market falls down due to a restriction of supply. Ticket touts who take advantage of that market imperfection do nothing to add to our creative industries in terms of revenue and profits to those putting on the shows.

In addition to profit being driven into the hands of those who have done nothing to nurture and develop the product, there is the added consideration of who owns the product being performed. I hope that everyone listening to this debate will readily agree that a performance belongs to an artist, and that the artist has the right to be in control of the terms of that performance. Indeed, today the French Government have enacted a law stating specifically that. Any hon. Member who wishes to explore further why the protection of intellectual property rights is so important may wish to check out my “Rock the House” website, www.rockthehouse2012.com, which goes into that particular debate in some detail. The creative person should at all times be able to retain control of how the end product is produced, marketed and used.

I am well aware of the argument that artists realise the full value of the ticket sales, so who are they to complain if others also make a profit? That argument, however, falls down on three counts. First, there are many reasons why a business may wish to price at below full market value, such as market penetration and reward for loyalty. There is differential pricing in football stadiums; for example, in a young persons area where the club wishes to build a fan base. They could sell at a much higher rate, but choose to price market segment. The clubs would be disadvantaged if those young persons simply sold on their tickets for a profit—that would defeat the intention of a lower-priced ticket. I will come on to the Olympic example later.

Secondly, another reason would be to control the type of person attending—for example, crowd separation at football matches. That argument is well established in other areas, too. There are restrictions on who can buy certain properties, such as affordable housing units that cannot be bought by speculators and sold at an immediately higher value to someone not in the target housing audience. In addition, a band may wish to have a young crowd at the front of the stage, rather than people who can afford the premium pricing, which would not necessarily create the same atmosphere.

Thirdly, there is criminality relating to ticket forgeries and organised crime, which I will come on to later. I should point out at this point that I am not totally against the on-selling of tickets. There must be a mechanism that allows ticket buyers to recover the price of their ticket, and maybe make a small profit for their troubles, if they cannot attend. That could be done via a fan-to-fan website. That is an essential safeguard, but it is the intention when buying the ticket that is the most important consideration. We saw recently, with the debenture ticket holders story at the Royal Albert hall, that some were buying their debenture—or season ticket, if you prefer—with no intention of going to the shows, but because they were able to make a profit of 10 times the face value.

At the moment, with huge profits available for popular events, tickets are being purchased on an industrial scale, with no intention of going to the event itself. People up and down the country are contracted by ticket organisations—or are freelance themselves—that make it their job to sit at banks of computers to buy the maximum allocation of tickets at face value as soon as they go on sale. As we saw on the “Dispatches” programme a few weeks ago, some companies are willing to use their staff, and credit cards obtained for this specific purpose, to buy tickets and resell for a profit.

Before I move on, may I just address the issues brought up in the “Dispatches” programme? A lot of the focus of the programme was based on artists, promoters or venues holding tickets back and using free market mechanisms to sell tickets at an additional profit to the benefit of those putting on the concert or event. I see nothing wrong with that if it is done with the copyright holder’s permission. It seems that that was given, since it would appear that the promoter ticket allocation, for example, was in the contracts. That was known to all parties and is no different from premium pricing at the front end. It is simply a mechanism that reduces the risk to the artist on pricing, and shares that with those operating the system for them. Some artists grade their tickets from the outset at a higher premium value. We have heard about certain artists charging £1,000 for tickets in the front row. The mechanism on fan-to-fan websites is no different from that; it just uses the free market to set the price. What was wrong, as mentioned earlier, was where the secondary ticket seller was buying, via a network of intermediary operators, for the specific purpose of on-selling at a profit to them, not to the artist.

That brings me on to the Olympics. As is well known and accepted as a matter of principle, it is against the law to on-sell an Olympic ticket, whether at a profit or not—it must be sold back to the organiser. It strikes me as baffling that the Government accept this for a specific sporting event and promote strong enforcement, but are reluctant to take action for the benefit of our creative industries. Some 6.6 million Olympic tickets have been sold to the public, raising £527 million. That figure could have been much more, but the price was set and the Government seek to enforce it so it remains a “games for all”, and not just those who can pay the premium. Some 25% of tickets have been held back for other purposes, such as corporate sales and other premium pricing, but a decision was taken that 75% of the tickets should go to enthusiastic fans at a specific price below market value. The atmosphere inside the arena will benefit as a result, contributing to what I am sure will be a fantastic games.

The Home Secretary is so determined to crack down on touts, the fine was raised from £5,000 to £20,000. In May 2011, she said:

“The 2012 Games will be a once-in-a-lifetime opportunity to experience the Games on home soil. By increasing fines for touting we are sending a clear message to criminals…that it is not worth their while and they are not welcome.”

The police, under Operation Podium, have announced that every ticket tout caught will also be pursued to recover their assets, with no maximum limit to the amount that can be recovered. Additionally, internet companies such as eBay and Gumtree could also face action if they do not take immediate action, once notified of illegal activity.

The worry about the effects of ticket touting goes further. Detective Chief Inspector Nick Downing, in charge of Operation Podium, said:

“we have already seen the demand for Olympic tickets which gives criminals greater opportunity to run scams, sell non-existent tickets and even steal your personal and credit card details to use in other crimes…As soon as you allow things to go out of control, opportunities for criminals grow. And I do not want London to be associated with disappointment at finding out all the money paid out was to criminals and no tickets exist”.

That last point could have been echoed by any bank manager, who I am sure would worry about exactly the same thing.

Although examples that I have given show that extensive action is, and can be, taken to prevent ticket touting at the games, it only serves to highlight the lack of action taken against ticket touts at other events. Without legislation, artists are forced to think of innovative ways to prevent touts. Glastonbury, for example, uses a picture of every ticket holder and other events have insisted that people bring with them the credit card used to purchase tickets. But this fails in a number of ways, from the father wanting to give a present to his kids, to those who do not have a credit card or driving licence as proof of identification. Such approaches can also create problems with crowd surges before curtain-up: checking 10,000 IDs will add to entrance delays, which venues are not geared up to handle, and there are obvious safety concerns—and anyway, it adds to the Big Brother state, which surely we should avoid if we can.

I am pleased that the ticket sales for the games have gone well. The Olympics are inspirational in so many ways and I hope that the Minister will be inspired by the ticketing arrangements for the London games and use that inspiration to help all our creative industries and events that could benefit similarly from Government and police assistance.

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

I know that the hon. Gentleman is probably just about to wind up, so I thank him for giving way. I wanted to listen to his speech in full and not interrupt along the way. He has made an excellent speech, as I would expect, because he is knowledgeable about this subject. With everything that he has said, and taking into account everything that he knows about what is going on, which “Dispatches” highlighted, does he think that the time has come for the Government to consider legislation, and not just say that the industry has to try to regulate itself?

[Mike Weatherley]

I thank the hon. Lady for her intervention and I applaud her efforts in this field, without which I would never have been alerted to the issue. I thank her for that. I agree and France does, too. As I said, France has gone live today with a law specifically about this form of ticket touting, which is along the lines of the hon. Lady’s private Member’s Bill, which although introduced did not get past the next stage.

I am not advocating that every ticketed event be subject to additional legislative support. Many artists and events will be happy for the secondary market to buy and sell their tickets, but those that wish to have protection should be able to apply for support under law, in the same way the Olympics did. If it is good enough for the world’s premier sporting event, it should be good enough for our creative industry, which is worth protecting before we lose the world-beating position Britain currently enjoys.

Sale of Tickets (Sporting and Cultural Events) Bill

Debate between Sharon Hodgson and Mike Weatherley

Friday 21st January 2011 Commons Chamber

[Mrs Hodgson]

It is bizarre—but not surprising. I know that not all Government Members will agree, and if any who do not would like to intervene I shall be more than happy to give way.

[Mike Weatherley (Hove) (Con)]

Does the hon. Lady agree that what my hon. Friend the Member for Shipley (Philip Davies) just said reinforces the point that those who have the creative talent should be the ones who utilise the tickets in such situations? That is an exact example of our point regarding ticket touts: the person who provides the creative talent should have some control over who goes to watch such events. I am grateful to my hon. Friend for making that point on our behalf.

[Mrs Hodgson]

Definitely. I do not think that the hon. Member for Shipley (Philip Davies) quite realised he was helping our cause when he made that intervention, but I thank him for doing so.

The situation to which I referred opens up the market to touts. They buy tickets at the low price that the governing body has decided to sell them at, and by selling them on at a profit they deprive fans of lesser means of the opportunity to enjoy top-class sport.