Sharon spoke to make the case for cross-party amendments to the Consumer Rights Bill seeking to reform the secondary ticketing market in the interest of fans.
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Mrs Hodgson: I am delighted to be able to speak on new clauses 18 to 21, which stand in my name and those of the hon. Member for Hove (Mike Weatherley) and other hon. Friends. I add my support to new clauses 8, 16 and 17, which were tabled by my hon. Friends on the Opposition Front Bench and ably argued for by my hon. Friend the Member for Walthamstow (Stella Creasy) this afternoon and in Committee.
New clause 18 follows directly from the conclusions and recommendations of the recent excellent report by the all-party group on ticket abuse. I want to put on the record my thanks to colleagues across the House and all the outside experts who contributed to that excellent report. We found that the existence of a secondary market for event tickets is justified by the need of genuine consumers to pass on tickets that they can no longer use. To some extent, that is because event holders are not very good at facilitating refunds or exchange mechanisms, even though they sell tickets many months in advance of the event.
On that point, I will speak briefly to new clause 12. It is a shame that the hon. Member for Shipley (Philip Davies)—he is not listening now—would not allow any interventions, because I wanted to correct for the record some of the errors in what he said. He is right that we have regularly locked horns on the issue, but that does not mean I will sit back and not seek to correct him when I think he is wrong. First, the Opposition are seeking not to ban the resale of tickets, but to regulate and reform the market in the interests of consumers through these very sensible cross-party proposals. My hon. Friend the Member for Walthamstow did not “allude”—I think that was the word he used—to trying to ban the resale of tickets.
Secondly, the hon. Member for Shipley was incorrect to claim that no one gives refunds at the moment. The Rugby Football Union guarantees full refunds for high-demand matches—I am sure that the World cup would qualify—up to an hour before kick-off. It also provides legitimate resale platforms. This ensures that any investment goes back into the sport of rugby. The England and Wales Cricket Board has established ticket exchanges at each venue and centrally so that a supporter who can no longer attend a match or has a spare can legitimately re-sell their ticket. Those are just two examples among many more that are out there.
Nick Smith (Blaenau Gwent) (Lab): Does my hon. Friend agree that new clauses 16 and 18 are particularly powerful, because they would enable us to identify the power sellers—the people who buy tickets on an almost industrial scale, and by doing so corner the market, rip off consumers and push up prices? Unless we do so, it is more likely that £250 tickets for the rugby world cup can be sold for over £1,000, as is happening at the moment. That has to be a bad thing, and we must stop it.
Mrs Hodgson: I agree with my hon. Friend. I thank him for his work in the all-party group in producing the report that has led and informed us in tabling the new clauses.
Our report recommended that the live event industry should do more to provide refunds. The new clause tabled by the hon. Member for Shipley could be ruinous for the live event industry while removing all the risk for the industrial touts of whom my hon. Friend the Member for Blaenau Gwent (Nick Smith) spoke. Most touts will aim to sell their tickets on the internet about four days in advance, so under the hon. Gentleman’s plans, any they do not manage to sell for a profit they could simply give back to the promoter for a full refund the day before, by which time the promoter will be unlikely to be able to sell them all on again. I fear that rather than helping ordinary consumers, as the hon. Gentleman has no doubt argued, that would mean more tickets being acquired by ticket touts who no longer face the uncertainty of whether they will be able to shift them, thereby manipulating the supply even more than they already do. A better balance would be to give refunds up to a reasonable point before the event, with facilitated resale after that if the event has sold out—as we set out in our report, which I hope the industry will take on board.
While accepting that there is a role for a legitimate secondary ticket market, the all-party group found considerable problems with how this market, which is estimated to be worth about £1 billion a year, works at present. In particular, we found that it does not adhere to the same principles of transparency and consumer protection that other markets are held to. To address these shortcomings, we have put together some modest proposals which, far from driving ticket resale underground, as some of those involved in it have claimed, would increase consumer confidence in the secondary market and therefore be very good for business.
Our first two new clauses address the lack of transparency. New clause 18 is about who is selling the ticket. It would place a duty on secondary ticketing platforms to provide basic identifying information about the individual or business offering a particular ticket or set of tickets for sale. It would allow consumers to say how prolific and reliable a particular seller is—in other words, whether they are a tout or a fellow fan and, if they are a tout, whether the tickets they have sold in the past have been as advertised. That would make the secondary ticketing platforms a lot more like the other internet marketplaces that many of use regularly and with confidence, such as eBay, Amazon and Play.com.
Importantly, the new clause would also require secondary ticketing platforms to be transparent in cases where the seller is also the event holder. The practice of event organisers secretly allocating whole blocks of tickets directly to the secondary market has been on the rise, due to the failure of successive Governments to intervene in the market on behalf of consumers or the creative sector. It was exposed in the Channel 4 “Dispatches” programme, “The Great Ticket Scandal”, broadcast in 2012. I cannot blame those who do this. They cannot stop the touts, who have not contributed in any way to the event—unlike the artist, the venue, the agent, the promoter, and so on—from making huge profits off the back of their hard work, so why not try to make some of that money for themselves, or, as I like to see it, have a piece of the poacher’s pie? That is their decision, but they should have to be transparent about it. Hiding behind the secondary market and allowing fans to believe that the ticket they are buying has been sold at face value before and they are buying from a third party is simply dishonest.
There is also a dishonest practice whereby a secondary ticketing platform or its employees or shareholders buy and sell tickets themselves, as the “Dispatches” programme also exposed. Employees of the platforms featured were shown with catalogues of credit cards, trying to buy as many tickets as possible to gigs. A leaked operations manual sent to me shortly after “Dispatches” aired showed that that was also a key part of the viagogo business model. The manual showed, among other things, that a company called Andro Capital, which was linked to viagogo’s then chief executive, Eric Baker, was also its most favoured power seller. Interestingly, a box at the start of the chapter explaining such dealing to employees stressed:
“Not only do we have private and power sellers, we also sell tickets on the website. PLEASE NOTE THAT NEITHER SELLERS NOR BUYERS SHOULD KNOW THAT WE ARE THE SELLER OF CERTAIN TICKETS. NOR SHOULD ANY OF THE INFORMATION BELOW BE DIVULGED TO OUR POWER SELLERS!”
Viagogo has since said that it has abandoned that practice, and Christoph Homann of GetMeIn! also assured the all-party group in his evidence that it does not itself buy tickets, either. In that case, they will not be affected by the new duty and have no reason to oppose it. Even if they or other secondary ticketing platforms still engage in such dealing, I can see no good reason why the law should permit them to keep that information secret from their consumers when it may make a material difference to a buying decision. I hope, therefore, that the Minister will consider adopting the measure.
I have mentioned the Channel 4 “Dispatches” investigation into the problems and I am also pleased to inform the House that the BBC’s “Watchdog” is also very keen on highlighting them. Indeed, they will feature in its shows on 21 and 28 May, and I am sure that hon. Members on both sides of the House will be glued to their TVs, watching them. “You and Yours” on Radio 4 also runs regular features on the issue, as do numerous national newspapers, including The Mirror, the Daily Mail and The Times, as well as trade magazines, such as the excellent Audience.
New clause 19 relates to the transparency of the product itself—that is, the ticket. Knowing the characteristics of a ticket would in many cases make a material difference to a buying decision, particularly in the case of seated events, in which a person’s position in the venue can make a significant difference to their enjoyment of the performance or the experience. Providing that information —or, indeed, the ticket number when there is general admission to the event—would also give consumers the confidence that the individual or company selling the ticket actually has tickets in hand and is not just speculating that they will be able to provide them at a later date. When a consumer wants to buy a number of tickets, the information will help them to ensure that they get seats together or at least close by.
The secondary platforms themselves were asked about that as part of the all-party group’s inquiry. StubHub said in its evidence that it requires seat information to be provided, but an investigation of its website shows that such information appears to be hit and miss. On the whole, it tended to be single tickets, which were probably being sold by ordinary fans, that had full information, while listings of two, four, six or more tickets, which were probably being sold by a professional, did not.
One of the other key pieces of information of which a consumer should be aware is a ticket’s original face value, which in many cases is another indicator of the quality of the product. In their evidence to the inquiry, representatives from the Rugby Football Union said that the cheapest tickets at Twickenham—those they keep cheap to try to get families to come along and to encourage grass-roots participation—often end up being resold at higher prices than some of their premium tickets, some of which may still be available.
Many consumers who are less conscious of how these secondary markets work think that because they are paying more for a ticket, they will get a premium service or seat. Many others do not even know that the website they are using is a secondary market rather than the primary or official source, given that such sites pay significant sums to show up first in Google rankings. Making sure that consumers are made aware of the original price of the ticket they are buying at the earliest opportunity, not just on the last screen—if at all—therefore gives them another piece of the information that they need to make an informed choice about whether to enter into such a purchase.
I do not think that any genuine fans who needed to sell on their tickets would have a problem with providing the basic information about the product they are selling, and I cannot see why any professional reseller would either. Even a street tout shows people a ticket—and therefore the seat number and face value—before they buy it. The secondary ticketing platforms, which claim to have higher standards, should therefore have no problem adapting to the new provisions.
Moving on from transparency, more of which should reduce the chances of things going wrong in the secondary market in the first place, new clause 20 concerns the recourse available to consumers when they do. There have been numerous recent reports of thousands of event goers being turned away with counterfeit or invalid tickets that they had bought via the big four secondary ticketing websites, all of which heavily promote their reliability, with prominent guarantees that tickets are genuine. The latest example to make the news involved the hundreds of Drake fans turned away from the O2 arena in north Greenwich.
It is welcome that all the big four companies say that they offer refunds, although over the years I have received a handful of complaints about their being less than prompt in doing so. As Reg Walker from the Iridium Consultancy pointed out during our second evidence session, people who turn up at venues with unusable tickets have all incurred at least some travel costs getting there, and in some cases they have come from abroad for the express purpose of using the ticket. That echoes the findings of the recent UK Music report on music tourism, including that ancillary spending just from music events is worth more than £2 billion a year to the country’s economy.
For such people, a full refund on the ticket, while welcome, will still leave them out of pocket. New clause 20 would, therefore, allow those consumers to claim back the extra costs associated with attending an event up to a reasonable level, which we suggest should be 200% of the total purchase price paid to the platform. The new clause would place responsibility for that initial payback on the secondary ticketing platforms, because they offer guarantees that they say consumers pay for in their significant service charges. However, having paid out that money, the new clause makes it clear that the secondary ticketing platform may recover it from the seller of the ticket. The payback should be made promptly, unless the police or other relevant authorities are investigating the buyer or seller for committing or trying to commit fraud. The only individuals or businesses that the new clause would hurt, therefore, are those who have sold dodgy tickets and consequently caused financial loss to the consumer.
The new clause would have the positive benefit of giving consumers the confidence that they will not be left out of pocket when they purchase tickets through the secondary market if those tickets turn out to be counterfeit or invalid. Again, far from driving the trade in tickets underground, it would have the effect of driving consumers to use websites that offer such protections, instead of those that do not and, in particular, instead of blokes outside the venue on the night.
Our last new clause, new clause 21, simply defines terms used in the previous three new clauses, so I will not detain the House by explaining it.
The proposals are not radical. If the Minister or hon. Members who have spoken against them asked their constituents whether they want to know what they are buying and who they are buying it from when they spend what are often significant sums, they would find that most of them said yes. The proposals would not abolish the secondary market or drive it underground; in fact, they would bring it out of the shadows into the mainstream. No longer would so many people still see it as a murky market; it would be a legitimate secondary market that works—as all markets should—in the interests of consumers, with full transparency and adequate protection. The only people who have opposed the proposals are those making large amounts of money from the status quo. It is time that this House and this Government stopped standing up for the interests of such people, and finally put fans first.