Sharon Hodgson MP

Working hard for Washington and Sunderland West.

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Consumer Rights Bill debate - Secondary Ticketing Platforms - 12.01.2015

"I hope that Members of all parties will think on those points ... Let us finally do the right thing and put fans first."

Sharon Hodgson MP's speech during the Consumer Rights debate, where the All-Party Group on Ticketing Abuse were trying to bring transparency into the secondary ticketing market - to help stop ticket touts from ripping off genuine fans.

Consumer Rights Bill Secondary Ticketing transparency

 Edited transcriptIntroduction:

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson, Liberal Democrate): "I beg to move, That this House disagrees with Lords amendment 12.

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

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

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

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

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

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

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

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

Mrs Hodgson: If the ticket clearly states that it is not for resale—that it is non-transferable—then that is part of the terms and conditions that it was sold under.

In the new model that we are hoping to create, with a new level of transparency, there would be less need for that.

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

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

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

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

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

Mrs Hodgson: I agree with the hon. Gentleman and thank him for that valuable contribution.  He is not only a creator of music—he remains one to this day—but a huge supporter of the music industry.

Other signatories to the letter included probably the world’s most pre-eminent promoter, Harvey Goldsmith CBE; the operators of west end and regional theatres; a host of individual music managers who look after some the country’s leading performers, including Iron Maiden, Muse, Arctic Monkeys and even One Direction; and most other industry umbrella bodies, which represent countless businesses contributing to the vitality of our creative sector, such as the Association of Independent Festivals and the Event Services Association.

All those bodies, and more, joined together to call on the Government to make one simple change.  Would the Government rather listen to that collective call from the

live event sector: the people whose hard work, talents and investment create the demand that the touts exploit? Alternatively, would they rather listen to the four companies that have been lobbying so intensely—I have with me reams of letters they have been sending out lately—against opening themselves and their relationships with big-time touts up to scrutiny?

Nick Smith (Blaenau Gwent) (Lab): May I also praise my hon. Friend’s leadership?  She has done a cracking job raising the important point she is making.  Does she agree that we need to get at the touts?  Those internet spivs are ripping off fans across the country, rigging the market and preventing real fans from going to gigs by exploiting them through the hugely overpriced tickets that they have harvested.

Mrs Hodgson: My hon. Friend makes an excellent point.  If the Minister does not want to listen to him, me, Members from both Houses or the creative industry, she should at the very least listen to the police.

The “Ticket Crime: Problem Profile” report by Operation Podium has, of course, been quoted in this place before—several times by me, in fact—but it bears repeating.  This was, after all, the unit that was set up to tackle organised crime affecting the Olympic games, and it spent about seven years looking at the workings of the ticket market.  In particular, it looked at the major ticket touts—the very people my hon. Friend the Member for Blaenau Gwent (Nick Smith) spoke about—because of the links that many of them have to serious and organised crime and money laundering, and because it was likely that the same people would try to tout Olympic tickets.

After spending so much time looking at the ecosystem that exists behind the veneer of legitimacy provided by the secondary platforms, the Metropolitan police’s Operation Podium unit produced a final report on ticket crime in February 2013.

It found that:

“Due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”

It concluded that:

“The lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticket market encourages unscrupulous practices, a lack of transparency and fraud.”

It made the following recommendations:

“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets.  The lack of legislation in this area enables fraud and places the public at risk of economic crime.

The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”

Will the Government listen to the police, who have nothing to gain either way, or to those who have gained and continue to gain from the lack of the regulation that the police say is needed?

One public agency that might have something to gain from the change is Her Majesty’s Revenue and Customs (HMRC).  One effect of the new clause proposed in Lords amendment 12 is that it would be possible to see which individuals were reselling tickets as a commercial enterprise, and therefore who should be paying tax on the sales made through the websites.

At the moment, when somebody buys a ticket on such platforms, they are led to believe that they are buying from another fan, and the only VAT that they see on the final statement is the VAT on the service charge levied by the platform.  If they are, in fact, buying from a third party business—or even from the event organiser, or, as in some cases, the performers themselves—VAT should be paid on the ticket price, as well as, obviously, on its profits as a company.  That point was raised last weekend with the Secretary of State for Culture, Media and Sport in an e-mail from a live music agent that I was copied into.  They made the point that PRS for Music, which collects royalties to distribute to artists and music publishers, is also being deprived of its lawful entitlement.

I wrote to HMRC following the (Channel 4) “Dispatches” documentary, “The Great Ticket Scandal”, in 2012; I have also referred to that in the House countless times.  That programme clearly showed how tickets were being bought up and resold in huge quantities—indeed, channelled directly but surreptitiously to the secondary market by promoters and managers.  The response that I received from HMRC was that no investigation could be made unless there were specific questions about specific individuals or businesses.  Of course, we did not have those then and we do not have them now, precisely because we cannot see which individuals or businesses are selling the tickets and in what quantities.  If that transparency is brought into the market through the proposed new clause, perhaps the Treasury’s coffers will see a much bigger slice of a market that is estimated to be worth between £1 billion and £1.5 billion a year—that is the secondary market alone and does not include the primary market.

The same principle could be applied to the problem of botnets, which GET ME IN! has been saying is the biggest problem and should be the focus of any legislation.  There is certainly a case for keeping the law on the misuse of computers under review.  The hon. Member for Hove and I have met the Under-Secretary of State for the Home Department, the hon. Member for Staffordshire Moorlands (Karen Bradley), who has responsibility for organised crime, to discuss this matter.

It is welcome that primary ticketing companies, such as GET ME IN!’s parent company Ticketmaster, invest in their own software to try to stop people scooping up large quantities of tickets automatically.  However, let us be clear that touts use botnets only because they know that they can shift all the tickets they manage to buy from the primary market through the secondary market with the benefit of complete anonymity, with no questions asked by the platforms about how they got them.  The secondary platforms are best placed to detect ticket crime at the moment, but they do nothing, because that is to their benefit.  If we make the market transparent, it will be clear for everyone to see who has an abnormally large number of tickets, and I bet that the use of botnets would drop off sharply as a result.

This entire debate boils down to a simple divide: it is about whose side we are on as legislators.  Are we here to pass laws to protect and enhance the rights of ordinary consumers, or are we here to block laws that might make individuals and companies more open and accountable to those consumers?  It is about whose interests we are here to serve.  Are we here to serve those who elect us, or are we here to be spin-doctors for those exploiting them and apologists for those who know full well that they are lucky to be getting away with what they are doing?  It is about whose opinions we value most highly.  Do we listen to our constituents, the police and those in the live events sector, who all tell us that there is a problem and a gap in the law that needs to be closed, or do we listen to the few who benefit from that gap in the law?  I know whose side I would rather be on, whose interests I am here to serve and whose opinions I value most.

Nobody operating honestly in the secondary market has anything to fear from transparency, and no consumer will be left out of pocket.  If anything, the secondary platforms should be embracing the opportunity to build confidence in their sector and limit their exposure to criminal activity.  I hope that Members of all parties will think on those points when they go through the Division Lobby later tonight; I am minded that the amendment will have to be pressed to a Division.  Let us finally do the right thing and put fans first.


Hansard Source.

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