Sale of Tickets (Sporting and Cultural Events) Bill
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—
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.
Philip Davies (Shipley) (Con)
I wonder who the hon. Lady sees as the victim. If a charity wants to sell tickets at £46 each and someone pays £46 each, the charity gets all the money that it expected to get. The fact that someone is prepared to pay more to someone else for that ticket does not take any money away from the charity. It still gets exactly the same amount as it bargained for when it sold the tickets. It makes no difference to its income whether the person who paid £46 for the ticket uses it or sells it on to someone else.
Mrs Hodgson
The charity does not get the whole £46. On average, with overheads and so on, charities reckon that they get about half the ticket money. The tout or whoever sells on the ticket, which clearly states on the back that it must not be resold, makes six or eight times more than the charity. The artists, who have given their time freely, intend that any money that comes on the back of their time and from the ticket should go to the charity. I find it quite shameful that the hon. Gentleman can say that such a practice is fair when the charity intends to help teenage victims of cancer. [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Hon. Members should work through the Chair, rather than talk across to each other.
Jacob Rees-Mogg (North East Somerset) (Con)
I thank the hon. Lady for being both gracious and generous in giving way a second time so quickly. If the charity fails to sell its tickets for the market price, which is £106, that is its fault. It ought to investigate other ways to sell its tickets, such as eBay, to maximise its return, rather than our introducing a harsh legislative measure.
Mrs Hodgson
The charity decides on the price based on the genuine, ordinary fans whom it wishes to attract. It is often aware that the price is sometimes below the market value, but the reason is that it does not want to attract only people who can afford to pay £106. It wants to attract a broad cross-section of people. It does not just want elite people in the audiences at such events. I will give further examples in due course.
Ian Austin (Dudley North) (Lab)
Does my hon. Friend share my surprise that Government Members support a system that excludes their constituents from having access to a free and open market, in which they can compete with other people to have proper access to tickets? Why does she think that they are in favour of their constituents not being able to buy tickets when they first go on sale?
Mrs Hodgson
That is an interesting point. Government Members have a lot of good arguments on the free market, but with regard to charity tickets, none of those arguments hold up. They should want such access for all their constituents, not just the ones who can afford to pay premium prices.
Mrs Hodgson
I would like to move on. I have a long speech, and I would like to get through the details.
I am, of course, aware that the issue has been considered on a number of occasions over the past five years. To be honest, the fact that it has been revisited so many times is testament to the fact that those who look at it keep coming to the wrong conclusions. Although I have read some of the contributions to the Culture, Media and Sport Committee’s inquiry, I still cannot understand how it arrived at its conclusion. The Select Committee and the then Government both concluded that fans wanted a forum in which they could buy tickets closer to the date of an event or sell them if they could not make it. I absolutely agree with that statement, but I disagree that that conclusion should allow the secondary market to carry on unregulated.
The key thing that both the Government and the Select Committee missed is that consumers also want a fair chance to get tickets at face value, and they do not want to be ripped off. I have a quote from a letter that my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) sent in his capacity as the then Minister with responsibility for the creative industries in response to my hon. Friend the Member for Glasgow North West (John Robertson), who is not in his place today, when he was campaigning on the issue way back in 2007. My right hon. Friend said:
“While consumers want a secondary market, they do not want to be exploited by individuals or businesses at their personal expense.”
But he then suggested that it was not in the public interest to legislate. I know my right hon. Friend the Member for St Helens South and Whiston; he is an intelligent man, so I can only think that once one becomes a Minister, there is sometimes a tendency to trust what the civil servants are saying a little too much.
Mrs Hodgson
No, I will not, if the hon. Gentleman does not mind.
Will the Minister tell us what his civil servants advised him ahead of this debate? I know my office provided them with advance sight of the Bill, so I hope they had enough time to come to a considered view. I look forward to hearing the Minister’s response—if his colleagues allow him to get in.
Coming back to the point, the Bill does not aim to do away with the secondary market. It aims to make the secondary market work in the interests of genuine fans, by forcing out the people who are there simply to profit from the hard work, investment and creative talent of the live entertainment industry, a sector that I am sure the Minister will agree has become extremely valuable to the UK’s economic vitality.
The role of the Government and of the House is to legislate in the public interest. The public interest does not lie in a few touts and the channels they sell through continuing to make obscene profits at the expense of the general event-going public and of the live entertainment industry. The public interest lies in the Government providing a statutory framework for the industry to use in the interests of fans where needed. That is exactly what the Bill provides for.
Before I come to the substance of the Bill and go through its various clauses, I take this opportunity to thank my fantastic and hard-working team who have helped me on my route to introducing the Bill to the House. In particular, I thank two people: Mike Forster, my researcher, who only started in August, so the Bill has been a huge part of his job; and David Hopper, previously my intern but now studying to be a solicitor, who did a lot of the groundwork behind the scenes on legislation around the world.
The Bill addresses the problem I laid out. It creates two new offences, but that is not the starting point. The starting point is the creation of a voluntary designation scheme under which those involved in putting on live entertainment events can apply for protection from the unauthorised resale of their tickets. If they apply for protection, it would be an offence for an unauthorised individual to be concerned in the sale of a ticket for that event at a price greater than 10% above face value. For such purposes, face value is the printed value plus any service charges levied by the appointed ticket agent.
Such an approach broadly follows that set out in the Queensland solution, of which hon. Members on the Select Committee on Culture, Media and Sport will be aware. In Queensland, tickets for any event held at certain major venues are subject to price caps on unauthorised resale. I want to broaden that provision out, because it would not touch a large part of the market, such as theatre or mid-sized and small gigs, which are just as lucrative for touts as stadium events—if not more so, because they occur on almost every night of the year in towns and cities throughout the country.
Clause 1 sets out how that system of designation could work. I am open to its refinement or to alternative suggestions from the Government or other hon. Members in Committee should the Bill be successfully voted through today.
Clause 2 sets out the offences, the first of which I have already mentioned. The second offence is the advertisement for sale and taking of payment for tickets that have not yet been released by the primary retailer. The issue is separate from that of the secondary market, coming as it does before even the primary market. Websites spring up offering concert tickets—a recent example is the Take That tour—that the person running the site obviously does not even have. It is a risk-free business, because the person gets a lump sum of cash to buy as many tickets as possible to satisfy the orders, and simply refunds any orders that cannot be satisfied. In some cases, such sites have simply not delivered the tickets and done a bunk with the money. Other laws cover such activities, but why is it still legal for those sites to offer tickets that they do not have, at the risk of many consumers being left short-changed and without tickets?
Clause 2 sets out the sanctions for the offences, which include a fine up to the level 5 limit on the standard scale. There was a case for going higher than that, as for many major operators, £5,000 represents a drop in the ocean of their business.
Lyn Brown (West Ham) (Lab)
As my hon. Friend knows, I am particularly concerned about the issue of ticket touts and the Olympic games. I do not feel that £5,000 is enough of a fine to deter unscrupulous touts. Does she agree?
Mrs Hodgson
I certainly do, and I shall come on to the Olympic games shortly. One of my suggestions is that we work with the Metropolitan police unit set up to tackle the issue. I am sure that my hon. Friend will meet it in the course of her work as a local MP. That unit also feels that £5,000 is nowhere near a big enough deterrent. There are measures in place, which I will come to in due course, but perhaps my hon. Friend will intervene on me again if I do not cover her point in detail.
I want to state explicitly that for the worst cases, the confiscation, under section 70 of the Proceeds of Crime Act 2002, of assets and cash thought to have been garnered through this activity should be considered. Clause 3 assumes an exemption from the limitations where the proceeds of an auctioned ticket are to be used for, or donated to, charitable purposes. Any exploitation of that assumption would obviously be investigable under the Charities Act 1993.
Philip Davies
The hon. Lady talks about her constituents and mine being exploited by ticket touts, but does she not accept that one of the worst exploitations in the whole ticketing market is carried out by promoters who sell tickets and then refuse to exchange them or give refunds? Somebody who buys a ticket and then finds that they cannot go to the event may not get a refund. In the secondary market, viagogo has a viagogo guarantee; if anything goes wrong, it guarantees people their money back. Surely that is giving people a better service than the primary ticket market does.
Mrs Hodgson
I shall come to that point, too; I shall mention that I encourage primary sellers to offer a refund service within a certain period—a cooling-off period, as it were. A lot of other online purchases are covered by these periods—a certain amount of time in which purchases can be returned. I met Rugby Football Union representatives, and that body accepts returns of all its tickets; the same is true of most tickets from the All England Lawn Tennis Club for Wimbledon finals. Most of these places will happily accept the tickets back and give a full refund, because they know that the tickets are highly sought after. [Interruption.] Not all are, but some key tickets are accepted back; the Minister is nodding.
Mrs Hodgson
Some are, and later in my speech I shall say that as part of the legislation, there could be discussions with primary ticket sellers and event organisers about ensuring that they offer a refund facility.
Let me come back to the clauses of the Bill. Clause 4 relates to the sale of tickets on the internet by touts. It is not my intention to require the active monitoring of adverts placed on websites by sites’ administrators; after all, the practicalities involved would be prohibitive. However, where that monitoring is done, either by the event organisers or the police, the Bill places a duty on the administrators of those websites to take down in a timely manner any adverts thought to be in contravention of clause 1—that is what will happen with regard to Olympic tickets—and to co-operate with any investigations of touts who have been using their services. Again, failure to comply would incur a fine up to the level 5 maximum.
Clause 5 places a duty on the Secretary of State to consult the industry on two things. The first is the establishment of a voluntary code, under which primary ticket agents would offer refunds on tickets within a certain time frame, just as other internet retailers are subject to distance-selling regulations; that exactly covers the point mentioned by the hon. Member for Shipley (Philip Davies), who is now not listening to the debate. Secondly, the Secretary of State should consult the industry on whether the creation of an official ticket exchange facility would be beneficial for consumers—both those who have spare tickets to sell, and those who want them. Primary agents and sites through which the secondary market operates would be happy to engage in that process and work towards creating a fairer marketplace for fans. The remaining clauses relate to interpretation provisions and the commencement and jurisdiction of the Bill, and require no explanation.
The House will be interested to learn that, in drafting the Bill, I consulted officers from Operation Podium extensively, and I thank them for their input. Members with an interest in preparations for the Olympic games—my hon. Friend the Member for West Ham (Lyn Brown) has such an interest as a constituency MP—may be aware that Operation Podium is being carried out by a team in the Metropolitan police dedicated to tackling crime associated with the games. Half of that taskforce is concerned primarily with working with Olympic organisers and the industry to tackle touting of Olympics tickets under the powers set out in section 31 of the London Olympic Games and Paralympic Games Act 2006, which builds on provisions relating to football tickets in section 166 of the Criminal Justice and Public Order Act 1994. The 2006 Act decrees that no reselling may take place by unauthorised retailers, and sets up a ticket exchange facility whereby genuine fans can sell tickets on to other fans at face value. That is the ideal model, and could easily be replicated if the political will was there.
Officers from Operation Podium told me that the secondary market is estimated to be worth up to £1 billion a year—money that is not being used to support grass-roots sports, artists or investors in live entertainment. Much of it will not go to the Treasury, save for a bit of VAT on charges levied by the websites that the touts use. They also told me that as the previous Government and the then Select Committee on Culture, Media and Sport had effectively given the measure the green light, it has been increasingly exploited by organised criminal networks, both UK-based and international, as a result of the vast sums of money on offer. The implication is that a large portion of that estimated £1 billion is being used to bankroll other crimes, such as drugs, trafficking, money laundering and so on. Tackling touting would therefore choke off a stream of income for those networks, which is just one reason for the measure that has been suggested to me since I began work on it.
The Minister for Sport and the Olympics (Hugh Robertson)
I looked at this issue carefully when we were in opposition. It was alleged that ticket touting was used as a means to launder the proceeds of crime. I specifically asked the Metropolitan police about that about 18 months ago, when the then Select Committee and the previous Government were looking at it, and they said that there was no firm evidence to support that allegation. If the hon. Lady has that evidence, I urge her to bring it forward.
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.
Philip Davies
Does the hon. Lady not see that there is a potential problem with restricting the resale value to just 10% of the original ticket price? It is much easier to manage that on the internet than to do so for touts standing outside stadiums. There is no way to tell how much people in a local pub might have sold a ticket on for, so that the safeguards of the secondary market on the internet would be lost as the tickets were resold. We are not going to get rid of the secondary market—like prostitution, it will always be there—but it will just shift from the internet to the street, where there will be fewer safeguards for the purchaser.
Mrs Hodgson
As the hon. Gentleman says, we cannot get rid of the secondary market, just as we cannot stop people selling stolen goods, but because legislation says that receiving stolen goods is illegal, the vast majority of the general public do not participate in such activity. Once legislation makes it clear what is allowed and what is an underground activity, public opinion and hearts and minds will change. That will happen with the Olympics tickets and the Bill.
The hon. Gentleman suggested that 10% is not fair, but the tickets for the Olympics will have no mark-up at all. They can be refunded through the Olympics authorities, in which case they will go to a fan on a waiting list and no mark-up will be allowed at all. The Bill recognises that there are sometimes other associated costs, such as postage or credit card fees, which is why it would allow the 10% level, which is what Queensland permits, too. If we were right to do that for the Olympics tickets, I cannot see why it is not the right thing to do for other ticketed events.
Sajid Javid (Bromsgrove) (Con)
I am intrigued to know why the hon. Lady selected 10%, rather than 20%, 30% or 40%.
Mrs Hodgson
We had a long debate about that, and 10% was deemed to be sufficiently small that there would be no profit. The people we are talking about buy huge numbers of tickets, and I am sure that the hon. Gentleman can work out that the bigger the percentage, the more lucrative it is for the number of tickets they buy up. Keeping the percentage small restricts the amount of extra money they can make on top and so removes the incentive for touts to participate in that activity.
I must return to the substance of my speech, if hon. Members will allow me. The Bill also has wide-ranging support from the live entertainment industry. The hon. Member for Hove (Mike Weatherley) and I met several people involved in the business last night. In particular, I spoke to Ron Smallwood—the manger of Iron Maiden, no less—who has been trying to push the matter up the agenda for many years. He said:
“When Iron Maiden tickets went on sale late last year for an extensive arena tour of the UK this coming summer, thousands upon thousands of tickets at much higher average price than face value appeared across these secondary sites within days… Do they really expect us to believe that even a small number of these were bought by people who suddenly—the day after they bought the ticket—found they couldn’t go to a concert some 9 months away?... This is one story of many…it is sheer piracy and must be stopped to protect the real fans and the performers.”
Last night I also met the manager of the Arctic Monkeys, Ian McAndrew—
Mrs Hodgson
I know. It was very enjoyable, and Mr McAndrew, who welcomed the Bill, summed up the situation succinctly, saying:
“Ticket touting is a substantial and thriving parasitical economy, which exploits both music fans and those stakeholders who are investing in putting on live entertainment.”
I could not have come up with a better soundbite myself, and I like to think that I am a fully fledged politician.
I have also been working extensively with the Sport and Recreation Alliance, formerly known as the Central Council for Physical Recreation, because the issue affects sport as much as, if not more than, musicians and other artistes, and I thank Dom Goggins and James MacDougall for their help in putting the Bill together. For those Members who do not know, the Sport and Recreation Alliance is the umbrella organisation representing the national governing and representative bodies of sports in the UK, including the Football Association, the Rugby Football Union, UK Athletics, the Ramblers and the Royal Academy of Dance.
Touting mainly affects the big sporting showpieces, such as international games and tournament finals, which national governing bodies run, investing any surplus they make in promoting grass-roots and associated programmes that are aimed, in particular, at increasing participation and instilling healthy lifestyles among school-age children. Such bodies want those children to be able to experience top-class sport, like most live events, with their families, and that is why—to respond again to the hon. Member for North East Somerset (Jacob Rees-Mogg) and his point about the market price—they set the majority of their ticket prices artificially low.
Philip Davies
I am very interested to hear the hon. Lady say that sporting bodies set their tickets at ordinary prices that fans can afford. Does she not accept, as it emerged a couple of years ago, that the Rugby Football Union did not put any tickets at all on sale to the general public for the Six Nations matches? For someone who was not part of a local rugby club or one of the sponsors, there were no tickets available. There were no tickets for ordinary rugby fans to buy on the open market. That is hardly delivering much of a service to genuine fans.
Mrs Hodgson
I contest that point, because the reverse is true. That body would have released tickets to clubs throughout the country, and they are full of genuine fans—and full of genuine fans who participate in the sport. So that does give people the chance to access tickets and gives kids who play the sport the chance to watch their heroes, without the tickets going on to the open market, where the touts buy them up and sell them on to the highest bidder.
Ian Austin
Is my hon. Friend as perplexed as I am why Government Members would rather see touts buy up tickets in bulk, excluding ordinary fans from the market, than see those tickets available to ordinary fans through clubs? Is that not bizarre?
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.
Sarah Newton (Truro and Falmouth) (Con)
Does the hon. Lady agree that in this House we sometimes struggle to find issues of relevance to young people and their families? Here we have an issue that is incredibly important to teenagers who are passionately involved in sport, which we hear many Members applauding and wanting to promote. Those interested in the creative industries are also relevant. Is it not vital that we listen to and encourage those young people and reflect their concerns in the legislation that we make in the House?
Mrs Hodgson
Definitely; I certainly agree. I am so grateful for that intervention. If the hon. Lady wants to make any further interventions, so that it is not just my voice that everybody hears today, I would be grateful.
Faced with this situation, it would be no surprise if sports simply put up their prices to squeeze the touts out, but they do not want to do that—and as we have heard, we do not want them to do that and teenagers do not want them to do that. Sports need to create a sustainable level of interest, and pricing the vast majority of families out of top events would certainly negate that ambition.
What sports want is to be protected by a regulatory scheme such as the one set out in the Bill. Only the sports that experience problems with touts would opt in to be covered. That would mean that it would not be the overarching, top-down imposition on the industry that some Government Members may try to argue it is. It would mean the Government doing what the Government should do: stepping into the market when they are needed to ensure that it operates in the best interests of the majority, especially of young people.
Tim Lamb, chief executive of the Sport and Recreation Alliance, summed up the position from the perspective of the sports that he represents. He said:
“Ticket touts are simply exploiting sport and their gain is everyone else’s loss.”
He could not be more right. I have also had positive feedback from Festival Republic, best known for putting on the Reading and Leeds festivals every August, which has been campaigning prominently on this issue for years, and from See Tickets, a major primary ticket agent. See has worked with the organisers of the Glastonbury festival to ensure that passes for the festival are impossible to sell on, by requiring pre-registration and photographs of the ticket holder to be printed on the ticket. That is effective, but completely impractical for the vast majority of live events and not something that organisers should have to invest in.
The interesting thing about See is that it has nothing to gain from the Bill. It gets paid for selling tickets, whether to touts or genuine fans, yet it still sees the huge unfairness in how the secondary market has developed. Rob Wilmshurst, See’s chief executive, said:
“The live entertainment industry provides cultural and economic benefit to the UK and needs support. Ignoring this issue again will further diminish customer trust in the market and therefore the contribution the industry makes in general to the country.”
Again, that is an insightful comment from someone who knows the industry better than any of us in the Chamber, as has been the case with all the feedback that I have relayed to hon. Members today. If those figures and their peers support the Bill or any action to make the situation fairer, it is incumbent on the Government to listen to those calls and at least re-examine the impact that the secondary market is having on live entertainment.
Simon Davies, chief executive of the Teenage Cancer Trust, was also at the meeting that I had last night. I also met him and his team late last year to discuss the Bill. I put on the record my sincere thanks to them for their support and input into the process. For those Members who are unaware of the work done by the Teenage Cancer Trust or who think that it is fair for touts to take money away from such work, I shall explain. The trust funds and builds specialist units in the NHS that cater for the specific needs of young people and teenagers who suffer from cancer, bringing them together so that they can socialise with and support each other through the most difficult time that one could ever imagine. On top of that, the trust funds a network of teenage cancer specialists and nurse consultants, to pool knowledge and expertise and provide tailored support to the young people. I am sure that all hon. Members would agree that it is an exceptionally worthy cause.
Mrs Hodgson
I shall be interested to see how the hon. Gentleman is going to explain his opposition to that.
Philip Davies
The hon. Lady talks about the Teenage Cancer Trust, but as she is probably aware from her research, where tickets are sold for a charity event and the charity contacts a company such as eBay to point out how much money is going to the charity, it can request that eBay insists that the seller passes at least 20% of the profit back to the charity. The Teenage Cancer Trust is one charity that has done that with eBay, gaining a kick-back and an increase in its income from the secondary market—more than it would have done if the tickets had simply been sold on the primary market.
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.
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.
Mrs Hodgson
No, I am going to carry on.
Assuming that about half the face value of the ticket represents the profit that the Teenage Cancer Trust makes on these events—by profit, I mean, of course, the money that goes to help young cancer sufferers—we can conclude that a tout selling for double the face value is making double the amount that the charity is making. Double face value, of course, is a conservative estimate. That price might be got by buying from a tout outside, part way through the gig, but anyone buying through internet channels either just after the tickets go on sale or just before the gig would be extremely lucky to get one for just double the price. Simon Davies said last night that some of the premium tickets went for four times their face value, meaning that the tout got six times the amount raised by the charity.
Do hon. Members really think that a situation in which private touts can earn more than the charity is satisfactory? Do they really think it right for individuals to be able to exploit the demand created by freely given hard work, the good will of a charity and the selfless giving of artists? I do not, and I would be interested to learn whether any hon. Members can intervene to explain why that is right, other than by just repeating what they have already said, which is, “It’s the free market.”
On that basis alone, I ask any hon. Members who have turned up to talk out the Bill with frivolous and self-indulgent speeches to think again.
Mrs Hodgson
I do not think that I am making a frivolous or a self-indulgent speech.
I ask such Members whether any of them have talked to their constituents about their intention to block this Bill. If they have, I would be interested to know what they heard. If they spent their Fridays out and about meeting their constituents, rather than habitually causing parliamentary mischief, they might have a better idea of what their constituents sent them to Parliament to do.
Philip Davies
I commend the hon. Lady for leading with her chin on that particular point, because all the surveys carried out on this issue fly in the face of what she thinks. I do not know whether her constituents are a rare breed compared with the rest of the country, but in an ICM poll of 1,000 people, 86% agreed that if they have a ticket to a sporting event, concert or other event, then they should be allowed to resell it. It is therefore the hon. Lady who is flying in the face of public opinion, not me.
Mrs Hodgson
My Bill would not stop them from being able to resell a ticket. My Bill would allow them to resell that ticket if they have genuinely bought it and genuinely cannot go to that gig or other event, and it would even allow them to resell it with a 10% mark-up for their trouble.
To bring my speech to a conclusion, my Bill sets out a blueprint for addressing the pernicious issue of ticket resale.
Graham Jones
I have wanted to make the following point for quite a while. There is a tax revenue issue in respect of secondary selling that needs to be addressed. A lot of the people concerned are operating in the black economy, making substantial amounts of money. The secondary market needs to be dealt with; we need to do something about it. Some of these people can be very friendly, but they are making an awful lot of money, and I make the assumption that certainly those who sell tickets outside venues do not pay any tax; rather, they are simply operating for themselves, cash in hand.
Mrs Hodgson
I thank my hon. Friend for raising that point. I did not address it at length, although I did touch on the fact that the Exchequer was not receiving any revenue from this billion-pound industry, apart from a small amount of VAT that some of the exchange sites levy. Every working person in the country has to pay tax through Pay-as-you-earn, but these touts, some of whom are making huge sums of money, are certainly not paying any of it.
Mrs Hodgson
I will not. I suspect that the hon. Gentleman might want to say, “Therefore, we should regulate touting and get these people to offer to pay pay-as-you-earn on their income.”
Mrs Hodgson
I will give way to the hon. Gentleman, in order to hear what he has to say.
Sajid Javid
I thank the hon. Lady for being so generous with her time and giving way for a second time. First, I want to say that this is the first Friday on which I have turned up. I am not going to make a habit of it, but I am very glad that I am present today, because the hon. Lady has made this a very exciting afternoon, whereas I was a bit worried that I might have been bored.
I want to say what my constituents might think of this proposal. I think they would believe that if they have genuinely and honestly come by a ticket and they wish to sell it, Government should impose no restrictions on what price they can sell it for, and on how they can sell it.
Mrs Hodgson
Well, such restrictions are law of this land now; that is what will happen for Olympics tickets. Someone who buys an Olympics ticket will not be able to sell it on for however much they choose, even though it is theirs. The Government have decided that those are premium tickets which are so desirable that they cannot just go to the highest bidder, and that instead they must be redistributed. A precedent has already been set, therefore.
Hugh Robertson
On a matter of fact, for a small number of major international tournaments it is a requirement of the bid that ticket touting is outlawed. For the Olympics, it is an International Olympic Committee regulation that has to be agreed to as part of the bidding. I am pretty sure, although we have not bid formally for a cricket world cup, that the same regulations would apply to an International Cricket Council 50-over cricket world cup. The same applies to football competitions, but that is for reasons of security, not ticket touting.
Mrs Hodgson
I thank the Minister for that clarification. If the IOC made that stipulation, it will have been for very good reasons. I sincerely hope that Members and the Government will consider those reasons, because they are as valid for the IOC as they are for this great country of ours.
We should remove the financial incentive that drives the activities of the major operators and give the police a way to go after those whom they suspect are involved in other criminality. The Bill is sufficiently light touch, I believe, not to harm any promoter, artist or other investor who does not wish their event to be covered. If they do not opt in to the scheme, or if they come to a commercial arrangement with a secondary retailer, the fans will know that that is an active decision. Nobody will be forced to opt in and have such regulation covering an event. If a commercial arrangement with a secondary retailer were made, at least some of the mark-up would go back to the artists or the sport.
Graham Jones
When it says on a ticket that it is not transferrable, can that be enforced in law? If that is the case, are the Conservative Members who have spoken encouraging people to break the law? The tickets that I buy pretty much always say, “This is not transferable.” Can my hon. Friend clarify?
Mrs Hodgson
As far as I am aware, tickets for the major charity events all have on them “not to be resold” or “not for resale”. Some will say that they are non-transferable. Yes, such people probably are breaking the law—certainly in the case of charity tickets—but there is no mechanism for bringing them to book.
Philip Davies
The hon. Member for Hyndburn (Graham Jones) has made a fair point. Some tickets do say that they are non-transferable and it is for those promoters, if they wish, to take to court anybody who they find in breach of that to enforce the non-transferable status. The hon. Lady and the hon. Gentleman might want to reflect on the reluctance of promoters to do so. They might discover that that reluctance is born out of the fact that a court would probably find such an approach to be a restriction in trade and that the term “non-transferable” was not enforceable.
Mrs Hodgson
That would be because there is no legislation on the statute book to say that that is a criminal offence. That is why people feel that they are powerless, and they are looking to us to do something about it.
Of course, I would prefer a blanket ban, like the one for Olympics tickets, but having consulted as widely as possible, I accept that it should be for individual stakeholders in the sector to decide how they want their tickets to be sold. I accept that there is a role for a secondary market, but that secondary market must operate in the interests of fans, not touts. Should the Bill go into Committee, I would be more than happy to talk to the Government about whether a different approach might work better. After all, the Minister has vast resources and scores of able minds, including his own, at his disposal. I am certainly open to working with him and his officials on a way forward, provided that the outcome is fairer to fans, artists and everyone else who invests in the live entertainment industry. I hope that he will not reject their concerns out of hand today.
If the Minister does reject those concerns, and if this Bill is not successful, the bad feeling about the secondary market, which is damaging the reputation of the entire sector, will not go away. The situation will not get better without Government intervention—and that of the Minister, I hope. I know that because I have seen how far the situation has developed since the Labour Government and the Select Committee last considered it and effectively, as I have said before, gave the touts a green light to continue by doing nothing to stop them. The Government and Parliament were wrong to come to that view, and I hope that a fresh set of Ministers will come to a different conclusion.
As touts got that green light, the primary market has naturally adapted to step in to the secondary marketplace —and why should it not do so? I do not condone the practices of Get Me In and Ticketmaster, if they are true, and I do not like the fact that artists such as Madonna auction premium seats or that some sports give their premium seats directly to secondary retailers, but one cannot blame them given the situation. If a tout can make that money, why should it not go to the people who put on the event? Indeed, it would be preferable to have it that way, particularly in the sporting world, where extra money means extra grass-roots investment. That is not an abstract hypothesis about how the primary market will go. That is what is happening right now, with many events at the O2 arena selling premium tickets at much higher prices than regular tickets.
My Bill seeks to limit the involvement of touts in the ticket market, which will provide less of a reason for anyone in the industry to feel that they must resort to such practices, thereby increasing the likelihood of a genuine fan being able to buy a ticket at face value with their saved-up pocket money. The only people who benefit from the current situation are a few professional touts. Whether they are linked to other crimes, and whether they use hacked computers or other underhand methods to buy their tickets, is beside the point. However they do it, they are manipulating the supply of tickets to exploit demand created by the talent, hard work, good will and investment of everyone involved in putting on live entertainment. Despite contributing nothing, they reap vast sums. As the manager of the Arctic Monkeys has said, it is “a parasitical economy”. It is the most distasteful expression of free market capitalism, because it creates a few big winners and countless big losers. If enacted, the provisions would be popular, because they are a proportionate attempt to redress that imbalance. I commend the Bill to the House.
Mike Weatherley (Hove) (Con)
I refer hon. Members to my entry in the Register of Members’ Financial Interests.
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on introducing the Bill and on allowing the House to have a lively debate.
Before I get on to the reasons why I—perhaps surprisingly—support the Bill, a little background is in order. At university, I was fortunate enough to attend a speech by the late Sir Keith Joseph, who changed my life. The speech was about free markets and, although I was studying business studies, I had the preconception that it would be boring—how wrong I was, because I was blown away by the arguments. I am a Conservative, because I believe that the free market is far and away the best method by which efficiently to allocate resources. Risk needs to be rewarded, and consumers should have the ultimate say on how products are delivered and at what price. In 90% of cases, the market should decide.
My second interest in the Bill stems from my love of live music and sport. Music and other forms of creative expression are vital to the British economy. I have delivered a number of speeches in the House about the importance of the music industry to the country for overseas earnings and suchlike. The performing arts and sport sustain employment and tax revenues, which benefit all our citizens. There is, however, a blight that creams off revenues by exploiting an imperfect market and contributes nothing to the creative copyright holders. That blight consists of those who profiteer by exploiting excess demand.
Ticket touts who take advantage of availability do nothing to promote our creative industries, and this is one of those rare examples where the Government need to step in to protect creative persons. There are five conditions for the formation of a perfect market, such as perfect knowledge of alternatives and so on. One of those conditions concerns the availability of supply. That is fine for physical products, which can be increased or decreased according to demand—for example, when manufacturing output is turned up, supply increases and the equilibrium price is found again. However, where supply is based on an individual, it is impossible for the number of hours in the day or the number of days in the year to be increased. A performer cannot be in two places at the same time. An imperfect market is then created, and prices rise due to a shortage of supply.
The question is whether intermediaries should be able to take advantage of that imperfection against the wishes of those providing the service. I certainly hope that everyone present in the House today recognises the value of copyright protection to the creative industries. If anyone does not, I suggest that they review the conclusions of the Gowers report, which agrees that intellectual property, and thereby the wishes of the creative person as to how their product is produced, marketed and used, should be protected. The copyright owner should retain control of their product.
Philip Davies
The problem with this line of argument—the comparison with general intellectual property—is that with other forms of intellectual property infringement, the person producing the goods or services loses out. With ticket touting, the promoter does not lose out because if they are selling 50,000 tickets at £20 each, they are hoping to get £1 million, and whether or not a ticket tout buys those tickets and sells them later they still get their £1 million, so they do not lose out financially.
Mike Weatherley
I am grateful to my hon. Friend for making that point, to which I shall give a specific answer later.
The issue is who owns the product that people are going to see. My view is that the copyright owner who produces the good, whether it is a concert or a sports event, is the owner and should have control of it for various reasons. There are many reasons why a business might want to price at below full market value—in specific sectors, market penetration is one such reason; reward for loyalty is another. Football is a good example. There is differential pricing in stadiums, but clubs depend on their regular, grass-roots fan base, and this is recognised in the lower prices in certain sections. Many clubs have a young persons’ section at half-price. They could easily charge full-price for that section, but they do not. If the argument of free market enterprise were applied to those tickets, young people would buy them and sell them on at a much higher value, but the club does not want them to resell those tickets at a higher price, as it knows they could, because it wants to encourage a loyal fan base and benefit the community.
Philip Davies
It is interesting that my hon. Friend uses football as an example because as the Minister said, the restrictions on ticket touting in football are to do not with ticket touting but security. Even so, an increasing number of clubs not only allow but actively encourage season ticket holders to resell their tickets through the secondary market when they are unable to go to a particular match.
Mike Weatherley
I have spoken to various football authorities about this, and the reason they allow the selling on of season tickets is that they recognise that people must have a mechanism for reselling if they cannot go to a match. However, the football authorities would not want someone to sell their season ticket for a particular match at 10 times its value. I happen to be going to a Chelsea-Manchester United match later in the season, but I have not paid 10 times the value of that ticket: I have been given it by a season ticket holder who cannot make the match. That is entirely proper.
Graham Jones
The hon. Member for Shipley (Philip Davies) raised the security issue, and I am somewhat confused by the way he contradicts himself. Surely, with football, there is a problem with ticket touting allowing people with football banning orders to access a match moments before it starts or while it is going on. However, that point is contrary to the one he made about the restraint of trade, which he says should not be allowed. Does the hon. Member for Hove (Mike Weatherley) agree that it is important to have some control over touting? When considering access to football grounds and the potential for violence, it is important that touting is legislated against.
Mike Weatherley
I am grateful to the hon. Gentleman for making that point. It is entirely accurate to say that the selling on of football tickets is problematic because of the segregation of supporters. That is well recognised by all concerned and is just one reason why the promoters of any event might want to restrict to whom tickets are being sold. There are other reasons, and I shall give a good example of one that relates to Conservative Members in a moment.
An hon. Member explained to me that that restriction would not apply to house building—that a developer who builds houses should be free to sell to people, and those people should be free to sell on again. Of course that is true, but if, for charitable reasons, the developer wants five of those houses to go to Cancer Research nurses, they are quite within their rights to say, “We will only sell those on in future to Cancer Research nurses” and restrict the free market into the future as to where those houses go. I see that as no different from the owner—the creative industry person who creates the product—deciding what they want to do with their product into the future. It is essential, therefore, that the owner of the skill or creative talent, or supplier, has a say in who the end user is—but not in all situations. The Bill does not cover every event, and the promoter or band who wish to cover their event have to so designate it.
It is impossible to restrict onward selling without having a mechanism for refund, and the Bill not only allows for a refund but allows on-sale at a premium, be that 10% or double face value or whatever has been decided in the final stages. I am going to a concert tonight—The Cult at Hammersmith Apollo—and my colleague has a spare ticket. He is going to on-sell that ticket at face value, and he should be able to do so. I see no reason why, in that situation, he should not. There are no crowd control or exploitation issues.
However, our discussion relates to those ticket agents that advertise sporting or music events later in the year—sometimes before tickets are even on sale—at 10 times face value. They buy in their hundreds and sell on at huge profits. It is possible to buy Chelsea tickets for later in the season right now, although they are not on sale—and incidentally, as everyone knows, the premier league has a rule on selling at face value only. That is a clear example where the free market for ticket sales is not advantageous. We have mentioned the Olympic games; a non-profit clause is enshrined in its arrangements as well.
There are other cases where the issuer reserves the right for tickets to be non-transferable—train and plane tickets, for example. I expect that when hon. Members sell tickets for a fundraising dinner, they reserve the right to object to a replacement being issued. Can they imagine tickets for the forthcoming Conservative ball, which are £400 each to raise funds for the party, being bought up by touts and sold on at £1,000 to lobbyists, or others, whom they may not necessarily want in their midst? Of course not. The point is that the person giving the function restricts the number of tickets, and insists on the person buying attending or getting permission to transfer. It is right and proper that the person providing the event has some say in that.
On the face of it, ticket touts provide a free-market service, but scratch a little deeper, and for some events that is a misguided and counter-productive service. The touts are exploiting a market abnormality to the detriment of the wishes of those who put on the event.
The proposals in the Bill are fair, in that selling at a small premium is allowed and not all events are covered. Only those wishing to be bound by the rules need apply. If the artist is happy for their tickets to be sold at a premium, that is fine. I slightly disagree with the hon. Member for Washington and Sunderland West, who said that Madonna would sell at a premium on an auction. I think it right and proper that she be allowed to do so; that is a free-market thing, and she has control of her product to do what she wants with it, but if she has decided that she wants to sell it at a certain price, that should be respected by the copyright owner.
Sarah Newton
Does my hon. Friend agree that we have rightly, as a coalition Government, focused on wanting to support free enterprise, to create a lot more jobs in the private—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Lady should be speaking through the Chair. I find it difficult to hear otherwise.
Sarah Newton
I am sorry; of course, Mr Deputy Speaker.
Quite rightly, the coalition Government have focused on supporting small business, private enterprise and growing jobs in the private sector. Does my hon. Friend agree that the Government should be listening to such an important and growing sector of our economy as the creative industries? They have identified this practice as being problematic and standing in the way of them growing this successful business and creating new jobs in our economy.
Mike Weatherley
My hon. Friend makes a very good point. If a business wants to develop its products, it might underprice in the market for a number of reasons, as I have said, one of which could be market penetration. If someone wants to develop a fan base and encourage people who might not necessarily come to watch their events or try their commercial products, they will often use prices far below market value to get people to try them for the first time. A lot of ticket promotions do that specifically for concerts, sporting events and so on. Small businesses and small events that are trying to grow their business can have very good reasons why they might want to carry on a market penetration for a long time into the future. I thank my colleague for her intervention.
The price that the creative copyright holder wants to charge should not be a judgment for the House or any external body. If a biscuit manufacturer wants to give away biscuits for sampling purposes, we should respect that. We should not say that touts can buy them up and sell them on. As my hon. Friend said, we should help that business to develop its market. We should not be judgmental about what it does for commercial reasons. Let us not kill the goose that lays the golden egg. Let us listen to the music managers, football clubs and those who provide creative services—I have met no one who is against this measure—and get behind the Bill to the benefit of the country in the long term.
Ian Austin (Dudley North) (Lab)
I congratulate my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). She is a brilliant MP and a formidable campaigner. I remember her relentless and successful campaign to pilot and promote free school meals to all children. Now she has ticket touts in her sight. If I were them, I would be very afraid. I completely understand why she has introduced the Bill. She is in touch with the people whom she represents. She understands ordinary people’s worries. She has listened to the concerns of ordinary sports and music fans who want to get a fair crack of the whip when buying tickets to watch the bands whom they love or the teams whom they support. As she said, every parent knows just how keen their kids are to see their favourite groups or watch their sporting heroes, but they are being priced out of the market by people who make mass purchases and exclude ordinary fans. For that reason, we should look very closely at what she proposes.
It is fair to say that many organisations in sport and the arts—as well as charities such as Teenage Cancer Trust, to which my hon. Friend has referred—are concerned about this issue. Many governing bodies have told me that they want proposals that will ensure ordinary grass-roots fans have access to tickets. I, too, want to ensure that ordinary fans have access to the primary market and that tickets are not bought up in huge numbers the minute they go on sale by organised gangs in the way that she described. I believe in open, free and fair competition. I want free access to fair markets. Free markets are underpinned by open access and fair competition. It is particularly important to ensure that any suggestion of organised criminals being involved and any question of links to the funding of criminal activity or laundering money for criminal operations are investigated and prevented immediately.
Philip Davies
On fair access, may I give the hon. Gentleman a scenario to find out what he makes of it? I might really want to see an event, but am unsure whether I can do so because of my work or family commitments. By the time I have sorted them out and rung up, the event might be booked up because it has sold out in a flash. Does he not recognise that, as a true fan, my only possible opportunity to go to that event would be provided by some form of ticket tout? If no ticket touts were available, I would be excluded from that event. They might charge a price that I do not want to pay—that is my choice, and I can make that decision—but they are helping genuine fans who have other commitments when tickets go on sale to buy them.
Ian Austin
I understand that, like me, the hon. Gentleman was educated in Dudley, but given the nonsense that he is speaking today, he wasted his time there. The Bill would not eradicate the secondary market. It would not prevent tickets from being sold on; it would simply limit the price. That might or might not be the right thing to do, but is he saying that the secondary market is perfect and that he can guarantee that there is absolutely no abuse, fraud, illegality or criminal behaviour? Is he saying, for example, that no one prints fake tickets, which cause all sorts of problems?
Such issues should be considered, but the hon. Gentleman and his colleagues, with their juvenile antics—the usual nonsense and behaviour that bring the House into disrepute every Friday—are preventing them from being examined. My hon. Friend’s proposals might not be the right ones, but we should consider them in Committee. We should examine the Bill, listen to all the experts and take appropriate measures, but the hon. Gentleman is preventing that from happening.
Philip Davies
I am rather surprised at the hon. Gentleman’s fake outrage, because I posed a perfectly legitimate question. Most people watching would conclude that his reaction was juvenile. He talked about fake tickets being printed, but surely someone in his position would accept that such fraud is already illegal. If he is not aware of that, I worry for him in his new position.
Ian Austin
Of course such things are illegal, but they are happening. We should examine—[Interruption.] New technology and all sorts of things change markets all the time. We should not say that we are not prepared to look at the issues to see whether changes ought to be introduced—whether regulation might work—to make the markets operate more effectively and give ordinary fans greater access to them. The hon. Gentleman is trying to prevent that by talking the Bill out. That is a disgrace and he should be ashamed of himself.
Sajid Javid
I am confused about the hon. Gentleman’s position. He started by supporting the Bill, or implying that he supports it.
Sajid Javid
Perhaps not, but the hon. Gentleman can correct me. He talks about free and fair markets, but he cannot support a Bill providing for a maximum 10% premium on resale and at the same time support free and fair markets. For the record, can he tell us the view of the official Opposition? Do they support the Bill or not?
Ian Austin
The hon. Gentleman has obviously not been listening. I said that I completely understand why my hon. Friend the Member for Washington and Sunderland West introduced the Bill. I believe in open, free and fair competition. I want ordinary fans to have proper access to the markets. There is clear evidence of abuse, with suggestions of organised criminal activity, people printing fake tickets and the rest. I am interested in looking at measures that could best deal with such things, opening up markets and ensuring free and fair access for ordinary fans. As I said, my hon. Friend’s proposals might do that, but there are strong views out there, so we should listen to all the experts and take a view. However, the hon. Gentleman and his colleagues are trying to prevent that debate by talking the Bill out.
Sajid Javid
With respect, I am not talking anything out, I am debating.
The hon. Gentleman is not making any sense. It is not clear what he thinks. Presumably, he had time to consider the Bill before coming to the House today. Does he support it or not? The question is straightforward. Hopefully, he can give a straightforward answer.
Ian Austin
I support the Bill going into Committee so that it can be examined in detail and we can find solutions to the problems identified by my hon. Friend. That is pretty clear from the three times that I said it.
I am interested in whether registration or membership schemes—selling tickets through clubs—can promote access for ordinary fans. I am interested in how new technology can facilitate the sale or resale of tickets free from fraud and illegitimate or illegal ticket touts. I want to explore how safety and security can be enhanced to tackle people who rip fans off through ticket fraud or online scams—selling tickets they do not have, printing fake tickets or claiming that a ticket is for a seat at the front when it is actually right at the back.
I urge the Government to allow the Bill into Committee, so that we can discuss it, examine the detail, listen to all the experts in sport and the arts, talk to people in the ticket trade and look at how new technology can promote safety and security. As I said, there might be other ways of tackling the problems and safeguarding access to live entertainment and sport.
Times are tough now for ordinary, hard-pressed working families. We have a good case for seeing how we can open up the market and ensure that exciting and enjoyable events are not taken out of the reach of ordinary people. I pay tribute to the extraordinary campaigning energy of my hon. Friend and wish the Bill fair passage to Report. The system is clearly not perfect. The market should be opened up and any illegal or criminal involvement should be tackled.
Sajid Javid (Bromsgrove) (Con)
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on bringing the Bill forward. She has raised important issues that are worthy of discussion in the House. My understanding, although I may be corrected, is that the issue has come up before through private Members’ Bills in previous Parliaments. However, in the interests of a full debate, it would be good to make a robust argument against what she proposes.
The Bill is flawed, in that it really does not understand the most basic laws of supply and demand. I do not think that one can buck the free market, or that it is the role of Government to get involved in free transactions. Let me make it clear that the issue is not about fraudulent transactions or criminal activity; as my hon. Friend the Member for Shipley (Philip Davies) said earlier, such activity is already illegal. This is about people legitimately getting hold of tickets in an honest way, and not prohibiting them from trying to sell those tickets at a profit, whatever that profit might be. In fact, such activity is probably an excellent example of the enterprise culture and of what a classic entrepreneur does, as long as—I emphasise this point—they get the tickets legitimately.
Ian Austin
Does the hon. Gentleman think that there are any problems associated with the secondary market at the moment? Can he guarantee that there is no involvement in criminal activity or fraud, and no online scams? If he cannot guarantee that, does he think that any consideration should be given to dealing with those problems?
Sajid Javid
I thank the hon. Gentleman for that intervention. Of course I cannot guarantee that; no one can guarantee that any market is free from criminal activity. The Bill will do nothing to stop criminal or fraudulent activity, because even if one put restrictions on sale prices and made certain practices illegal, it would not mean that any criminal or fraudulent activity going on at the moment would stop.
Sajid Javid
I will in a moment, but I shall just finish answering the hon. Gentleman’s point.
Philip Davies
The hon. Member for Dudley North (Ian Austin) is trying to talk the Bill out.
Sajid Javid
Yes, and we should not do that. The hon. Member for Dudley North (Ian Austin) has had ample time in which to speak. The point that he is missing—this is why I was confused by the speech that he gave from the Opposition Front Bench—is that if the concern is about criminal and fraudulent activity, and activity that is clearly wrong, there are already laws in place for that. If those laws are not strong enough, or Members think that changes should be made to them, that is a completely different argument from what is being proposed today. One of the key proposals in the Bill is to limit the resale price in the secondary market at a premium of only 10% of face value.
Mrs Hodgson
Does the hon. Gentleman not recognise that limiting the price at which a ticket can be resold will remove the incentive for people to buy huge numbers of tickets, and will remove the large amount of profit in, and the size of, the secondary market? There is nothing wrong with reselling tickets, but we are trying to limit the amount of profit that can be made. Also, does he not recognise that no income tax is paid on any of those earnings by the entrepreneurs he talks of?
Sajid Javid
The hon. Lady seems to suggest that anyone who earns a profit over a certain margin must be engaged in some kind of criminal or fraudulent activity, and that is clearly not the case. I hope that she accepts that, as has been mentioned, many ticket touts—perhaps the vast majority—are legitimate, have got the tickets in an honest way, and are not engaged in any kind of criminal or illegitimate activity at all.
Jacob Rees-Mogg
I wonder whether my hon. Friend might cast his mind over the issue of people buying up large numbers of tickets. Is that not actually enormously to the advantage of promoters of events, who are guaranteed a certain number of sales—the tickets may not be sold on subsequently—and get their cash flow early on? It is not simply a case of the practice disadvantaging the personal shopper.
Sajid Javid
My hon. Friend makes a fair point. In some cases, that can be advantageous, but I accept that where there is clearly very high demand, there are sometimes good reasons to restrict the number of tickets that an individual can buy.
Mike Weatherley
Does my hon. Friend agree that the people who should be making that judgment are the music promoters and managers, who almost unanimously say that the point made earlier by my hon. Friend the Member for Shipley (Philip Davies) is totally inappropriate, and that they do not like that way of selling? They prefer to sell directly to the fans, rather than to those intermediaries who distort the market for the type of person they want to come to the concert.
Sajid Javid
It is a varied market, and different promoters and creative acts will wish to sell their tickets in different ways. It could well be the case that they do not like selling tickets in bulk—that is their choice; no one is forcing them to do so—and if they wish to sell individual buyers a maximum of two or three a time, that is their choice. Equally, the price at which tickets are sold is their choice, and if a company or creative act is genuinely concerned about that, they always have the option to increase or reduce the price. That is how the free market operates.
Mike Weatherley
Is that not exactly the point? The copyright holder themselves can make that judgment. Many promoters restrict ticket sales to four or six at a time, only to find that 100 are on display through the software programmes that the hon. Member for Washington and Sunderland West (Mrs Hodgson) mentioned and that offer multiple ticket buying in different formats. If the promoter wants to offer a maximum of six to an individual, he should be allowed to do so.
Sajid Javid
I take the point that my hon. Friend is making, but I have already answered that question.
Ticket resellers act like classic entrepreneurs, because they fill a gap in the market that they have identified. They provide a service that can help people who did not obtain a supply of tickets in the original sale to purchase them for sporting and cultural events. As long as those tickets have been acquired genuinely and lawfully, it is an honest transaction, and there should be no Government restriction on someone’s ability to sell them.
Ian Austin
I am grateful to the hon. Gentleman for giving way again. Given that he was unable to guarantee that nothing could be done to improve the primary or secondary markets, will he guarantee that he will not talk out the Bill, so that it can go into Committee and these issues can be discussed properly by Members on both sides of the House?
Sajid Javid
I did not say that there could not be any improvements in the system. I have no intention of talking out the Bill, but I cannot guarantee the intentions of other hon. Members.
The hon. Member for Washington and Sunderland West referred several times to real or genuine fans, and to the fact that they cannot buy tickets because they are priced out of the market. She referred, too, to speculators. I do not understand what she meant by that, as I shall explain, and perhaps she will be able to clarify what she was implying. Her argument sounded far more anti-capitalist than anti-tout.
Let me explain by way of the example of a Wimbledon final. Only 10,000 tickets are available, but demand is three times as high—30,000 people want a ticket, which is not atypical by any means. If the tickets are priced at £20 a head and are sold in a secondary market at five times face value at £100 a head, who is being exploited and how? I assume that the hon. Lady would say that the ticket tout is exploiting people in that example by making a profit of £80.
Perhaps that could be avoided if the club priced the tickets at the outset so that there was not a mismatch between supply and demand by selling them, for example, at £100. If that is what the hon. Lady is suggesting, the corporation or company behind the club or event would make the extra profit. I would have thought that, as a socialist—I assume that she is a socialist—she would welcome the small man or the honest ticket tout who has bought their tickets legitimately and offers them for sale, making a profit for themselves, as opposed to the corporation making those profits.
Let me use a personal example. I was brought up in a part of Bristol called Bedminster. It is a working-class neighbourhood and, as a child, I lived near the Bristol City football ground. Many times at weekends I would pass the ground and see ticket touts trying to sell tickets. I would hear them offering their tickets, sometimes at prices that were multiples of the face value. Many of the touts were ordinary hard-working people. One may not have liked the look of some of them, and they may have seemed unsavoury to some people, but they were ordinary people providing a service in a legitimate way. I would rather be on their side than on the side of the large corporations.
Mrs Hodgson
The hon. Gentleman is talking about those salt of the earth-type individuals selling on tickets and doing a hard day’s graft for their little reward, but are they paying any income tax like the rest of us? Is he condoning black market activity? Does he think it is right for those salt of the earth types to stand outside selling tickets at Bristol or wherever, at mark-ups that my hon. Friend the Member for Dudley North (Ian Austin) considers rather high, and without paying any tax on that, unlike the rest of us?
Sajid Javid
I think the hon. Lady will find that most secondary market sales, such as those on eBay, are exempt from income tax and other such charges. If that is her concern, there is no reason to single out tickets, as opposed to other items that might go on sale in the secondary market. Although she described ticket touts as the salt of the earth, that is not a phrase that I used. I am not suggesting that some of those characters might not look unsavoury or that they might not have a tattoo on their head, for example, but that does not matter. As long as they have tickets that they acquired legitimately and they wish to sell them at a price that is higher than the face value, the Government have no responsibility to intervene.
The interests that the hon. Lady is representing are probably those of the chattering middle classes and champagne socialists, who have no interest in helping the common working man earn a decent living by acting as a middleman in the sale of a proper service.
Ian Austin
Setting to one side the ludicrous fantasy that tickets at Bristol City have ever gone at many times their face value, which is a total invention, the hon. Gentleman’s point is interesting. If he is saying that ticket touting ought to be allowed at football games, how could he prevent the admission of people who are subject to banning orders for causing trouble at football, how could he ensure the proper segregation of fans, and how could he guarantee public order in the grounds? He ought to be aware that ticket touting at football is illegal for precisely those public order reasons, as I am sure the Minister will confirm. Has he discussed with the police his desire for ticket touting to be allowed at football, and sought their advice?
Sajid Javid
I am sure the hon. Gentleman is aware of the current rules and regulations surrounding the issue. We are debating a Bill that seeks to change those rules and regulations. Perhaps it would be easier if I explained the role of a middleman using an example that is not as sensitive as that of tickets.
The hon. Gentleman may have sold one of his used cars in the past. If he wanted to sell a car, he could try and sell it himself, but most people would try to find a middleman to help with the process. They might go to a car dealer. Their car might be sold for £1,000 to a car dealer. If they learned that the car dealer who purchased their car and helped them went on to sell it a few days later for £1,500, they would not say that the car dealer had ripped them off by £500, because he had provided a service. A middleman in a ticket transaction provides a service no different from that, as long as—I stress this—he had acquired the tickets honestly. That is why we have a secondary market in the sale of tickets and will continue to do so. So long as the individual involved in secondary market transactions has acquired the tickets legitimately, they are providing a service that deserves to be rewarded.
The hon. Lady should understand, as has not been made clear today, that not everyone has the time to queue for a ticket, or leads a well-regulated life or knows months in advance, when tickets might go on sale, whether they can attend an event, and not everyone knows privileged insiders who can get hold of tickets that would otherwise be difficult to obtain. However, everyone, to a greater or lesser extent, has money. If a person wishes to devote a large part of their disposable income to see something that is disproportionately attractive to them, why should anyone else care and why should it be their business?
The hon. Lady seems to believe that touts are ruthless exploiters whom no one in civilised society should countenance. Nothing could be further from the truth. If the tout has come by his tickets in an honest way and offers a genuine service with a real risk of loss in the pursuit of profit, that is not a problem. As someone who believes passionately in the virtues of the free market and who is on the side of the ordinary, common working man, I respectfully oppose the Bill.
Philip Davies (Shipley) (Con)
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on bringing forward the Bill. I think we ought to be aware that ticket touts can lose money—on many occasions they do—as well as earn it. I will give an illustration: if a ticket tout had decided to buy up tickets for the Labour Benches today, hoping to sell them on at a profit to the supporters of the Bill, they would be badly out of pocket. What surprised me from the outset is that the hon. Lady, despite making such a passionate speech on how annoyed her constituents are about ticket touting and how passing the Bill was the most important thing anyone could do, has spectacularly failed to persuade any of her colleagues to attend. Had they considered it at all important, there would be at least 100 of them here to support a closure motion and guarantee that the Bill went into Committee, which the hon. Member for Dudley North (Ian Austin) is so anxious to see happen. I am afraid to say that I will not take any lectures on how important the Bill is to people across the country when the hon. Lady cannot even persuade her colleagues of its benefits.
I agree with my hon. Friend the Member for Bromsgrove (Sajid Javid): it struck me that the hon. Lady’s speech was more against capitalism per se than against any kind of ticket touting. She seemed to indicate—she will no doubt correct me if I am wrong—that to sell a ticket at a profit of more than 10% was verging on criminality and that it was completely unacceptable and outrageous. If it is the view of the Labour party that anyone who happens to sell a product at a profit of more than 10% is verging on criminality and is totally undesirable, it seems to me that many people will be interested to know that.
If the hon. Lady goes to any clothes shop and asks for the profit margin on the clothes being sold, she will find it is considerably more than 10%. In fact, she will find that the profit margin on anything in any shop will be considerably more than 10%. She seems to be saying she does not believe in the business world or capitalism at all, and the hon. Member for Dudley North, who is pushing for the Bill to go into Committee, seems to be endorsing that approach. I knew that new Labour was dead, but I had not realised it was dead to that extent. This really is old Labour with bells on.
Mrs Hodgson
I know that the hon. Gentleman is having sport with me, because he knows I am not saying that people should not be able to charge a mark-up of whatever percentage they choose in shops. That is not what I am saying at all. The principle would apply specifically to tickets for events whose organisers would choose to opt into the Bill. It would not cover every event, as the promoter would have to choose to opt in to be covered under the Bill’s proposals and so control the amount of money that those tickets are sold on for. That would mean that there would be more chance of genuine fans buying them at source. It would not stop genuine fans buying tickets at the last minute either, because genuine fans would still be able to get them through a resale, but there would not be the huge market that encourages tickets to be bought up at source within minutes of their going on sale.
Philip Davies
I heard the hon. Lady’s argument the first time around; I was not persuaded by it then and I am not persuaded by it now.
Before anybody suggests that I am going to talk out this Bill, I should say that it is absolutely my intention—in fact, it is a guarantee—to speak for less time than the hon. Lady did when proposing it. So I hope there will be no arguments about that.
Jacob Rees-Mogg
My hon. Friend will have to do that, because this particular business ends at 2.30 pm so the time available is obviously less.
Philip Davies
My hon. Friend spotted that, too, but the situation is beyond my control. If you, Madam Deputy Speaker, tell me—not for the first time—that I have to conclude my remarks, I shall accept your ruling with the good grace that I always show.
Ian Austin
I can assure the hon. Gentleman that new Labour is not dead. I said I believed in free markets, open competition and fair access for ordinary people. I want to ensure that the organised bulk-buying of tickets which excludes ordinary fans is prevented, so that ordinary people get a fair crack of the whip when it comes to buying tickets. When he thinks about it, he will find that that is a more free-market approach than his. It is the Opposition who are standing up for open access, competitive markets and free competition. If he believes that there are no problems at all with secondary markets, fair enough; but surely he can see that there must be some ways of improving them. My hon. Friend’s proposal might not be the best way of doing so, but I simply say that we should get the Bill into Committee so we can debate it.
Philip Davies
That is a perfectly fair point, but the hon. Gentleman did not manage to persuade his Government to adopt that approach when they were in office, as they killed the Bill when it last came up, so I am not entirely sure why anybody who is against it now should be considered a tyrant, because his Government killed exactly the same Bill in the previous Parliament.
New Labour clearly is not dead, because the hon. Gentleman seems to think that just by asserting something, it is therefore true: so if he says that he believes in the free market, it is therefore sufficient proof that the Labour party believes in the free market. I take a rather different view: I think our policies have to reflect our assertions. We cannot just say, “I believe in the free market” and then pass laws that completely fly in the face of the free market. I ask him for some consistency, so that his lofty words about believing in the free market might be followed up by action and policies that support them. I am afraid, however, that I cannot see any of that happening.
Mr Deputy Speaker, you are in a privileged position in this debate, because you were also on the Culture, Media and Sport Committee with me when we considered this matter two or three years ago. We conducted an interesting inquiry. The hon. Lady was absolutely right: not only did we find the secondary market to be perfectly legitimate, but her Government found exactly the same. She did not mention this point, but she will also be aware that the Office of Fair Trading has always made it clear that the secondary market for tickets is not only not a bad thing but actively works in the consumer’s favour.
That brings me to my hon. Friend the Member for Hove (Mike Weatherley), who says that the people who own the rights to an event—the promoters or, in his words, the holders of the intellectual property—should be free to determine such matters. That is a perfectly legitimate and respectable view to hold, but I do not agree. I was encouraged, nevertheless, as he said he was not really taking the consumer’s interests into consideration. They did not matter; what mattered was the intellectual property holder. That is a perfectly respectable view, but I do not agree. I think that the public—the consumers—are an important part of the process.
Mike Weatherley
My hon. Friend makes a good point, and I thank him for his comments, but does he agree that the point is not about the free market, which we all fully endorse and support, but about the ownership of the product, control over the creative product and the ability to determine whom one should sell to and deal with?
Philip Davies
I agree with my hon. Friend on many things, but not on this. I believe that if I sell a product to somebody else who hands over the money that I have asked for to purchase it, I have ceded that product to that person. That is the whole point of the free market. If somebody goes into a supermarket, buys a product and sells it on, I do not believe that the supermarket should have a go at that customer for doing that; once it had sold it, it was that person’s to do what they wanted with it.
The issue comes up in all sorts of things outside sporting and cultural events. We did not have time to go into other matters during the speech made by the hon. Member for Washington and Sunderland West, but I would be interested to know how she feels about them.
To save any misunderstanding, I make it clear that I am not arguing from a personal interest perspective, but there is often a big hoo-ha in the press when a limited edition of designer handbags goes on sale in Selfridge’s or some other big department store, and there is a huge queue outside to buy the 25 available. Alternatively, Buzz Lightyears go on sale at Christmas—everybody wants one, but there are hardly any left. Massive queues form outside overnight. The lucky 20 dash in and buy the few available and within five minutes flat the product is on eBay being sold at 20 times the price because the person who bought it knows that there is a much bigger demand than the shop was able to accommodate.
I am not entirely sure whether the hon. Lady or the hon. Member for Dudley North are suggesting that, from their party’s perspective, it is the Government’s job to start regulating all these matters, so that if somebody buys somebody else’s intellectual property and then uses the free market to sell it at 25 times the price, the Government should stop that. If the hon. Lady or the hon. Gentleman are suggesting that, I should like them to stand up and say so; if they are not, perhaps they will explain what the difference is between somebody who buys a ticket to an event and somebody who buys a limited edition of a Buzz Lightyear, a handbag or anything else. Perhaps my hon. Friend the Member for Hove could do the same. I see no difference at all. It seems to me that once the Government go down the road of controlling the market in tickets, they are opening up the floodgates, or a slippery slope, of intervening in every single nook and cranny of the commercial world.
Mr Nuttall
That raises the interesting question of what would happen in the stamp market. People often buy stamps, especially commemorative issues, for the purpose of holding on to them for a number of years in the hope of selling them on for a profit.
Philip Davies
My hon. Friend’s question helps to illustrate the point: where would it end if the Government went down such a road? Where would it all end indeed?
It does not surprise me at all that the Labour party wants to interfere in every nook and cranny of everybody’s lives—what they buy, how much they can sell it on for and all that kind of business; that is its raison d’être as a political party. However, I hope that the one thing that the coalition Government will not do is adopt that kind of socialist agenda. That would be very worrying indeed.
The hon. Lady talked about how popular the issue was among the general public, if not among her own colleagues. However, I take issue with the notion that the reselling of tickets is unpopular; I am not entirely sure that there is a great deal of evidence to suggest that. ICM conducted some opinion polls on this matter. As I mentioned earlier, 86% agreed with the statement:
“If I had a ticket to a sporting event, concert or other event that I could no longer use then I should be allowed to resell it”.
Some 83% agreed with the premise:
“Once I’ve bought a ticket it is my property and I should be able to sell it just as I can any other private property”.
That point was made by my hon. Friend the Member for Bury North (Mr Nuttall). Some 86% agreed:
“It shouldn’t be against the law for people to resell tickets that they no longer want or can’t use.”
The hon. Lady, or her cheerleader on the Front Bench, made the point that the Bill would not ban the resale of tickets, but simply restrict the price at which they could be resold, and that therefore the opinion polls were irrelevant. However, the same opinion poll also found that 56% agreed that the price of a ticket should be determined only by what they were willing to pay, which seems to fly in the face of the hon. Lady’s argument that everybody in the country is appalled by the current situation and that something needs to be done about it. Perhaps she has taken only a small or a biased sample of opinion; if she has a better mechanism for opinion polls than ICM, she should share it with the organisation. Furthermore, 61% agreed that the second-hand or secondary ticket market enables real fans to get hold of tickets that they would otherwise have missed out on. Contrary to the hon. Lady’s contention that most people think that the secondary market stops real fans getting their tickets, 61% of people think the exact opposite.
Mr Nuttall
My hon. Friend has just mentioned the term “real fan”, while earlier we heard a number of references to “ordinary fan”, “average fan” and “biggest fan”. Is he aware of a definition for any of these terms?
Philip Davies
My hon. Friend makes a good point about what constitutes a “real fan” in these matters. If somebody is prepared to pay £2,000 or £5,000 for a ticket to a concert, I would argue that it provides the best example of a real fan. Nobody is going to pay that kind of money for a ticket to an event in which they are not really interested. It seems to me, then, that the free market and ticket touting help the real fans to find their way to the front of the queue rather than get clogged up by people who might be buying on a whim because the tickets are rather cheap.
The hon. Lady says that she is trying to help the organisers and others to sell the tickets for the benefit of real fans, but perhaps she should reflect a bit further. Some of the concert and sporting promoters should also reflect on the part of the ICM opinion poll showing that 71% of people agreed that too many tickets for major sporting and cultural events were allocated to corporate sponsors, hospitality packages and VIPs. On this particular matter, I tend to agree with my hon. Friend the Member for Hove, who would presumably say that these are their tickets and they are entitled to give them to whomever they want. I would not gainsay that in this particular case. It is a bit galling, however, for people to be lecturing everybody on how they want the real genuine fans to have the tickets at a price they can easily afford when they are some of the worst when it comes to real fans not getting their tickets, because of the “prawn sandwich brigade”.
Mike Weatherley
Would my hon. Friend care to meet some of the music managers with me and be lectured by them? Perhaps we could also invite some real and true fans to come along to express their opinion so that we get a breadth of viewpoint. I wonder whether the Minister would also like to accompany us on this particular venture.
Philip Davies
My hon. Friend makes a tempting offer and it would be churlish of me to turn it down, so I look forward to receiving that invitation. I am encouraged: the longer I speak, the better the invitations I get. That encourages me to keep going a little while longer. I do not mind the free market—if anyone has a better offer, I would be prepared to hear it. I can assure my hon. Friend that I have already heard these arguments, as the Select Committee heard the views of promoters. I suspect that even the mere mention of my name to a certain Harvey Goldsmith is likely to give him a near-heart attack. Some of the spats that he and I had—not just in the Select Committee, but on radio interviews afterwards on the issue—seem to have done his health more harm than good. I am certainly aware of the arguments, but I was not persuaded by them.
My hon. Friend the Member for Bury North made a good point about who the real fans are in this case. Who are we trying to protect? Who are the people who are losing out as result of ticket touting? I have never worked out who the losers are, but they are certainly not the promoters. They do not lose out in any shape or form from ticket touting and nor do the artists.
Mr Christopher Chope (Christchurch) (Con)
Is my hon. Friend sure that the promoters are not losing out? They could be selling their tickets at a higher price, and if they are worth more on the open market than the promoters are selling them for, then they are losing out.
Philip Davies
If my hon. Friend does not mind my saying so, he states the obvious. Obviously, if the market would guarantee a higher price for the tickets and the promoters were to sell them at a higher price, they would make more money. My point, however, is that that is their choice. If a promoter has 50,000 tickets to an event and chooses for one reason or another to sell them at £20 per ticket, their ambition is to bring in £1 million from the sale of those tickets. Rather than ticket touts causing a problem for the promoters, I assert that they are helping, because the more tickets they buy, the more likely the promoters are to sell the amount of tickets required for them to raise the sum of money for which they have budgeted. The ticket tout is therefore helping the promoters reach their targets. If there is no ticket touting, the promoter is not going to bring in more than £1 million; the tickets will still all be sold for £20 each. That is the only income the promoters are going to get, so they are certainly not losing out.
Ian Austin
I would like the hon. Gentleman to address the central question; it has not yet been dealt with. Is it fair that individuals are excluded from the market because cartels buy up the tickets in bulk and then rig the price? That is not a free market. Is the hon. Gentleman saying that that is fair? If he agrees that it may not be fair, and that it may need to be looked at, why is he not going to help get this Bill into Committee?
Philip Davies
I do not accept the hon. Gentleman’s assertion that ticket touts prevent people from accessing tickets. I would make the opposite point. Tickets for an event might sell out in five seconds flat, before a genuine fan has the chance to realise they were on sale or before they could check whether they could get time off work or child care. If they later realise that they can go to the event and there were no ticket touting, they would have no chance of going to the event. The only mechanism that enables them to have a chance to go to the event is the secondary market. It may well be that the price the secondary market charges is more than the person is prepared to pay, but that is their choice. If the ticket touts were not there to offer their services, that person would not even have that choice in the first place. It is therefore my assertion that ticket touting gives the genuine fan more access, rather than restricts it.
Ian Austin
I am not arguing with the points the hon. Gentleman makes about the secondary market. I am simply asking him this: is it right that people should be able to use technology to buy up all the tickets right at the outset, prevent anybody else from having a fair crack of the whip, and then fix the price? That is not a free-market solution.
Philip Davies
I am not aware that the hon. Gentleman in his speech or the hon. Member for Washington and Sunderland West (Mrs Hodgson) in her Bill advocate that these provisions should be limited to people who buy huge quantities of tickets over a website. This is a principled point about people selling tickets at more than a 10% mark-up, however they come by them.
I always thought that the Labour party believed in the redistribution of wealth from rich people to poor people. I thought that was the way they wanted to go. I am therefore a bit flummoxed by what has been said. A constituent of mine who has not got a great deal of money but is a great fan of cricket might buy a ticket to the cricket world cup final for, let us say, £25. They then go to the pub where a fellow says, “Do you know what? My lifetime ambition is to go to the cricket world cup final but I cannot get a ticket as they have sold out. I am so keen, I would give £3,000 to get a ticket.” My constituent might then think, “£3,000 for this ticket! All my Christmases have come at once. This fellow has obviously got far more money than he knows what to do with if he is prepared to pay £3,000 for my ticket.” That would be an example of great redistribution of wealth from rich people to poor people. The richer people are giving the money to the poorer people for a commodity that they want to sell. I would have thought that Labour Members would be all for that kind of redistribution of wealth. What on earth has happened to them? They have given up being new Labour, and now they have given up being old Labour.
Mrs Hodgson
The hon. Gentleman is making a flamboyant and interesting speech in his usual manner, and he may have made some valid points. I suggest that he allows this Bill to go into Committee and perhaps allows the Minister to speak in the last 10 minutes available. I am sure that the Minister has prepared something and has some pearls of wisdom to offer that I really want to hear and that should be on the record. Will the hon. Gentleman allow the Minister to speak so that the Bill can pass to Committee?
Philip Davies
It was the hon. Lady who spoke for an hour, not me. If she had shown some discipline during her speech, we might well have got on to the Minister. We might yet. However, the more interventions she makes the less chance I have of getting beyond my opening remarks.
Joan Walley (Stoke-on-Trent North) (Lab)
On a point of order, Mr Deputy Speaker. Further to my point of order earlier this morning, is this not just one more example of the filibustering and archaic procedures that are preventing genuine private Members’ Bills from receiving scrutiny in Committee?
Mr Deputy Speaker (Mr Nigel Evans)
I know how frustrating Fridays are for those who have Bills that are down the line, but my job in the Chair is, if a filibuster takes place, to stop it immediately. That is not the case and the hon. Member for Shipley (Philip Davies) is in order.
Philip Davies
I am grateful, Mr Deputy Speaker, and I am glad that you think that the points that I have made are relevant to the Bill. I am genuinely disappointed that Opposition Members do not wish to engage in a debate. I thought that that was the whole point of Bills going through Parliament—that we debated them. When I have finished making the points I have to make I will, in customary fashion, sit down. I always thought that that was the way that debates worked in this place—that people spoke until they had finished and then they stopped.
Philip Davies
My hon. Friend is ingenious as ever. That might be something that the Procedure Committee will want to consider. I suggest that my hon. Friend mentions it to our right hon. Friend the Member for East Yorkshire (Mr Knight). I shall look forward to that system being introduced.
I do not think that things work against the interests of the promoter. The promoter gets all the income that they were ever going to get in the first place, so the promoter is looked after. The issue is then whether things work in favour of the consumer. As I hope I have argued, the fact that the consumer can buy tickets right up to the end means that it works in their best interests, too. I must say in passing that if ticket touting is such a big issue for concert promoters and sporting promoters—if it is the be all and end all and the biggest single threat to their business—it is a wonder that they do not do more imaginative things to try to stop the antics of ticket touts. My hon. Friend the Member for Hove said that it should be up to them what they do, and it is. Perhaps, rather than selling all the tickets in one go right at the start so that they are sold out in five minutes flat, which provides a perfect market for the ticket tout because no tickets are on open sale, why not sell tickets gradually week by week, so that there are still some tickets on open sale right up to the day before the concert? There would therefore be no market for the ticket touts.
I do not think that the solutions to the problems lie with more legislation, but of course that is what the Labour party always reaches for. If Labour Members perceive a problem—for the avoidance of doubt, I am not saying that there is a problem—they think the only solution is more Government legislation, more Government interference and more of a nanny state. The solutions to these things are often in the hands of the promoters and I want to see an explanation of why more promoters do not sell tickets bit by bit, week by week and day by day, so that tickets are still available on the open market the day before. There would then be no market. Perhaps the hon. Member for Dudley North could explain what is wrong with that solution. I see that he does not want me to give way, so perhaps I have talked him round. Perhaps this is a triumph that I did not anticipate. He appears not to disagree with me, so I shall leave it at that.
I want to refer to the Office of Fair Trading. People seem to think that not allowing the person who owns the property to set the price will make the price more expensive for the consumer. I take issue with that, because when I had the pleasure of working for Asda, it challenged the net book agreement. I do not know whether hon. Members remember the net book agreement, which allowed publishers to set the price of books and which prevented anyone else from selling the book at a different price.
I presume that my hon. Friend the Member for Hove supports the net book agreement, because the book belongs to the publishers, who should therefore be able to force everybody to sell it at a particular price. At Asda, we thought that that was against the interest of the consumer, that it was a protection racket and that it flew in the face of the free market. We took our case to court to argue that we should be able to sell books at the price that we wanted to sell them at and that there should be a free market. After a lot of to-ing and fro-ing and a lot of expense, I am delighted to say that Asda won its case and the net book agreement was broken.
What has been the upshot of the end of the net book agreement? If the argument advanced by the hon. Member for Washington and Sunderland West holds, prices would have risen: people would have abused the system by charging all sorts of prices. The nice, kind publisher would have wanted as many people as possible to read the book, and would have sold at the cheapest possible price, while the nasty retailers would have hiked up the price to increase their profits. The exact opposite actually ensued. Since the net book agreement ended, book prices have decreased, so breaking that restriction worked in the best interest of consumers. I do not see the difference between books and tickets, because the principle is the same. The free market won out in the courts, and I hope that it will continue to do so.
Mike Weatherley
My hon. Friend has set out a good economic analysis. Does he accept that in commercial terms there is such a thing as price differentiation in different markets for various reasons by the producer for long-term commercial purposes?
Philip Davies
Indeed. My hon. Friend has made some perfectly reasonable points, but I happen to disagree with them. Most of the problems that he has identified can be solved by the industry itself, and I have made some imaginative suggestions. If ticket touting is such a big issue, tickets should be sold on the open market by auction, as my hon. Friend the Member for Christchurch has suggested, which would maximise income and get rid of ticket touts, who would have no business.
Mrs Hodgson
In the two minutes remaining, I wonder whether the hon. Gentleman will allow the Minister to say a few words.
Philip Davies
As I made clear at the start of my speech—I hope that I am considered to be someone who sticks to their word—I will speak for less time than the hon. Lady, and I intend to keep that promise.
Mr Nuttall
My hon. Friend may like to know that those who have spoken in favour of the Bill spoke for 85 minutes; even if he continues until 2.30 pm, those who oppose the Bill will have spoken for only 51 minutes.
Philip Davies
My hon. Friend is, with good reason, considered to be the expert on Friday rules, if I can put it like that. I am sure that the hon. Member for Washington and Sunderland West is grateful that he has not charged for his advice on getting her Bill through in future weeks. I commend his advice to her.
When the chief executive of the Office of Fair Trading gave evidence to the Select Committee, he did not just say that the secondary market was working in the best interests of the consumer, although he did say that. I add that the right hon. Member for Barking (Margaret Hodge) also said that when she gave evidence as a member of the Labour Government; she was a passionate supporter of the secondary market. The chief executive also made it clear that he considered that the secondary market also worked in the interests of promoters. Let me quote what he said—