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24 Apr 2008 : Column 504WH—continued

If that means only cultural events to which tickets are free, that is drawing it more narrowly, but even if that is the Government’s view, the Government say rightly that they do not want to legislate and that they hope a
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solution can be achieved through agreement in the industry. I must say, however, that there is absolutely no sign that the secondary market will agree to it. Indeed, responses to the Government’s proposals from bodies such as Seatwave make it clear that they do not agree to them at all. It may be over-optimistic to think that agreement can be achieved.

However, I share the Government’s wish. The Minister said in his evidence to us that, if possible, there should be voluntary agreement rather than Government intervention. For that reason, the Committee was particularly interested and encouraged by the development of a proposal, first introduced by the Music Managers Forum, for the establishment of a resale rights society. The idea has attracted support from a number of different parties in the industry, and it seems to offer at least the possibility of achieving the voluntary approach that both the Committee and the Minister think is the most desirable outcome.

I think that everyone supports the first part of the proposals, which concerns the general need for a code of conduct, but I found the second part attractive. It states that there should be an agreement that, where a ticket is sold for a large amount in the secondary market, the owner of the original intellectual property right—the performing artist or the sporting body organising the event—should get some benefit. It has certainly been a great cause of resentment that artists see tickets for their performances being sold for hundreds if not thousands of pounds and get absolutely no benefit from it.

There is a precedent in artists’ resale rights, which were introduced a few years ago, mainly as a result of European Union intervention. Those rights require that, if a work of visual art is sold at auction, a payment should be made to the artist if they are still alive or to their estate if they died within the past 70 years. The rights have established a precedent that artists are entitled to some reward for their efforts not just the first time their work changes hands but on subsequent sales. Applying that precedent to secondary ticketing seems to have the same logic, and it is encouraging that the proposal is achieving widespread support.

I understand that the proposal is supported by artist management organisations representing more than 300 artists, including Mr. Williams, whom I have mentioned, the Arctic Monkeys, Franz Ferdinand, Girls Aloud and a vast number of well-known artists. It is also supported by the Performing Right Society and the Concert Promoters Association. The Association of Secondary Ticket Agents supports it as well, or at least accepts the principle, so at least some members of each component part of the industry are willing to sign up to such an agreement.

Since the Committee produced its report, there has been some movement. It appears that what was, in our view, an almost intractable problem when we set off on the inquiry might have a solution that everybody can support. We are optimistic that the voluntary arrangement that all of us want might be within reach, but I am not necessarily persuaded by the Government’s proposal that additional restrictions should be placed on the so-called crown jewels. I shall be interested to hear the Minister’s further comments on that in due course.

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2.58 pm

John Robertson (Glasgow, North-West) (Lab): It is a pleasure to serve under your chairmanship, Mr. Weir. I congratulate the Select Committee and its Chairman on the report. Although I do not necessarily agree with everything in it, it is a report on a subject of some importance.

The report poses the question, “What is ticket touting?” I think it is fairly clear that a tout buys tickets and exploits demand to resell them at a profit. In my view, the Secretary of State for Culture, Media and Sport was absolutely right when he said that touting

As chair of both the all-party group on music and the all-party group on communications, I am disappointed that neither the Select Committee’s report nor the Government’s response reflected that. Although I welcome the attention given to ticket touting and much of the discussion in the report, I feel that the recommendations give a green light to touts and will ultimately prove counter-productive and lead the industry down a dubious path.

There are two main classes of victim of touting: first, the fans and consumers and, secondly, the primary sellers and the entertainment industry itself. I have little doubt that everyone here will know someone who has attempted to buy tickets, but missed out and then seen them on sale on auction websites going for vast multiples of the face value. In fact, last year, my daughter found tickets for a Take That concert on sale on a site before they went on sale officially—so the 20 minutes that the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) was talking about did not exist. They were actually on sale on sites before being released to the public. How is that possible?

With every ticket sold in that way, those who missed out originally, those whose bid was insufficient and the person who eventually bought the ticket at a vastly inflated price are all victims of this exploitation. The Select Committee’s final recommendations failed to bear that in mind. One reason for that was perhaps a lack of evidence from individual consumers, but then, it should hardly surprise anyone in Parliament that so few individuals submitted evidence to the Committee’s inquiry. I wonder whether a more proactive approach is required.

We can all reflect on this sentence from the report’s conclusion:

The majority of constituents and music fans to whom I speak are overwhelmingly against ticket touting. On the consumer side, the Committee mentioned conflicts of opinion in a number of polls. That could be summed up by Pink Floyd’s lyric:

It is interesting to note that both opinions cited in favour of touting came from eBay and viagogo—internet auction sites. Against that, a poll by the New Musical Express, a magazine for music fans, showed seven out of 10 people against touting; that was backed up by a poll from YouGov.

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Mr. Nigel Evans (Ribble Valley) (Con): I do not discount what the hon. Gentleman says about polls showing that the public are against ticket touting. However, the public tend also to get depressed about corporate hospitality, particularly when there is a scarcity of tickets. They say that genuine fans cannot get tickets because they have all been snapped up by big multinationals, employees of which then give them out to their friends. Would he consider banning that as well, or does he treat that differently?

John Robertson: The hon. Gentleman makes a fair point, but I must confess that I had not thought about it. I shall ponder on it and perhaps slip something in at the end of my speech. I understand what he says, but the ordinary, everyday punter usually cannot afford £200 or £300 for corporate hospitality. I also understand why football clubs provide corporate hospitality to bring in extra revenue and why, when they build new stadiums, they build in the relevant facilities while—hopefully—still leaving plenty of room for other fans. After all, some of these are big stadiums, such as Arsenal’s Emirates stadium. The old Highbury had a capacity of about 37,000 to 38,000, compared with the over 60,000 capacity of the Emirates. They have probably tried to cater for everyone there. However, that cannot be said of ticket touting.

An interesting phenomenon a few years ago, which the Committee did not mention, was people putting in unenforceable bids of hundreds of millions of pounds. Glastonbury was one such example of ticket bids being made to scupper the auction. On that occasion, nobody won—nobody got a ticket—so the situation had to be looked at again. However, those things can happen.

The industry is the other key victim of touting. As the report usefully highlights, there is a practice of selling below the clearing price, particularly on the basis of the long-term commercial interest of the whole industry. That is why touts are able to prosper, exploiting the fact that the tickets have been sold at a cut price. Music fans spending hundreds of pounds on one ticket are unlikely to be able to afford to attend many of the smaller events in the industry; that would lead us to believe that the money being spent on the big events will affect the small ones, which might not be as well attended. That, in turn, will affect the future richness of talent, of which this country has an abundance coming through. Will that talent still find a way through if the only people being attended are those with a big name and big advertisers behind them?

The hon. Member for Maldon and East Chelmsford mentioned Robbie Williams, who of course did not come up through the clubs and pubs—he emerged on the scene because he was manufactured, along with a few other boys. As it turned out, they had talent, but he managed to bypass the kind of events that I am talking about, which we must support.

Joan Walley (Stoke-on-Trent, North) (Lab): Does my hon. Friend agree that Robbie Williams is where he is today because of the rich cultural life in Stoke-on-Trent, in Burslem and other towns of the Potteries?

John Robertson: I have visited Stoke-on-Trent many times, but I might have missed that rich culture—in those days, when I was an engineer, I went for the pubs and clubs.

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Paul Farrelly (Newcastle-under-Lyme) (Lab): May I add the name of Newcastle-under-Lyme to this debate, where there are also many Robbie Williams fans?

John Robertson: There are many clubs and pubs in my hon. Friend’s constituency, as well. I used to be a BT engineer, and it had a training centre there, which took me away from home for many weeks, so I know that area very well. I must say that I enjoyed it. It is a great area and an excellent place to live—and I have now lost my place.

The report usefully highlighted the practice of selling below the clearing price, which we must remember. The industry also looks at ways in which to cultivate long-term fans, which is why the first response of the primary sellers was not simply to increase prices on their auctions, although they now seem to be going down that road. Pictures for identification have been introduced on to some tickets. Why would the primary sellers want to do that if they were happy with secondary selling? We must consider that, as well. Later, I shall go into more detail about where the industry is going. The Committee’s final recommendation, for the profits of touting to be shared with the primary market, does not recognise the additional, new ticketing costs aimed at beating off touting. We need to consider how recompense can be provided. Indeed, if the recommendation were supported, the added legitimacy of the industry’s involvement would be likely to increase the secondary market. That is unrealistic in the light of current trends.

Yesterday, Geoff Ellis, the director of T in the Park, told me that artists are now beginning to ask for tickets to events to be auctioned on their behalf, so that the profits go to them, rather than to the ticket touts. He also informed me that the Concert Promoters Association is looking to set up its own auction site and allocate a certain percentage of tickets to it from the primary market. Ticketmaster, another recent development, has formally called for regulation. It has purchased Get Me In!, which is another ticket auction site. So the primary market is now looking to make a greater share of its profits from providing a secondary market itself.

The report points out that the market has a moral right to receive what the consumer would like to pay. Where I think that it fell into error was in failing to question the moral right of a tout to share in the profits. The report also recognises that it would be wrong for someone to profit from the sale of a free ticket. I have difficulty seeing why, given that the industry deliberately sells below the clearing price, that principle should not apply to all tickets.

Another question that I would put to the Government is this. If someone deliberately exploits demand for an event that has deliberately been made more open to the public, what difference will it make if the ticket costs £20 or nothing?

On the middle-way solution recommended by the Committee, the secondary market undoubtedly has several benefits for the consumer, but I find it difficult to understand why such benefits should be seen as exclusive to touting, where profits are involved. There is an imperative for a better system of refunding and reselling that involves primary sellers. A ban on reselling tickets for vast profits, as the industry urges, would be a sensible trade-off in return for a number of measures. Such measures could include more guarantees on refunds,
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an industry-endorsed internet marketplace for resale and selling a percentage of tickets in batches over time. To take just one individual measure, Queensland’s ban on selling tickets for more than 110 per cent. of their face value would be a more equitable path for the UK.

My point, essentially, is that the benefits of the secondary market are not a persuasive reason to preserve it in its current state. When tickets can be provided more fairly and securely, and prices can be kept down, we could perhaps look at the issue again.

Mr. Don Foster: I have a lot of sympathy for the direction in which the hon. Gentleman is travelling, but would he acknowledge that operators in the legitimate secondary market—the ones with appropriate conditions and guarantees to the consumer—are providing a valuable service, as has been suggested? It is perhaps worth reflecting on the fact that more than 50 per cent. of the hundreds of thousands of tickets sold on viagogo in the past 12 months were sold at below face value, not above it.

John Robertson: I thank the hon. Gentleman for that, but the primary sellers are going down that road themselves and, given support, they will take on that roll. I would much rather see the primary sellers doing the reselling than see a secondary person come in, because although 50 per cent. of tickets might be sold at below their face value, 50 per cent. are not. Of those, some are sold for not just one or two pounds above face value, but for far more.

I always cite the example of the pair of tickets for disabled spaces at Wimbledon that went on sale on eBay for £7,000. That is obscene, and the chances are that the person who got them was able bodied, so a disabled person would not have got a seat. Such problems outweigh the hon. Gentleman’s point, which is why I would like the primary sellers to do the reselling.

Paul Farrelly: Does my hon. Friend agree that it is also quite possible that the person who bought the tickets at that inflated price was refused admission to the seats, so there are real consumer protection issues here?

John Robertson: My hon. Friend is absolutely correct, and it is hoped that that happened in this case. Unfortunately, although such people might be refused in one or two cases, the vast majority slip through the net. That is why it is important that the primary seller, not the secondary seller, should do the reselling.

Mr. Ellwood: The hon. Gentleman suggests that there is an obligation on the primary seller to take responsibility for any resale. What happens if they do not want that responsibility and want to outsource it to one of the legitimate organisations that we are talking about? Furthermore, what happens if a disabled person has a ticket to Wimbledon but cannot go and wants deliberately to sell it? I am curious to know whether the Wimbledon ticket sold in the hon. Gentleman’s example was from an able-bodied person or a disabled person.

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John Robertson: The hon. Gentleman misunderstood what I was saying about primary sellers. I am saying that they are going down that road now, not that they are obliged to do so or that an obligation should be put on them. They are doing that now and looking into the fact that obscene profits can be made that could not have been made when the tickets were sold at their old face value. In other words, there would not be a face value on these tickets; they would just be auctioned, and whoever bid the most money would get the ticket. Of course, the chances of tickets going to a secondary seller would be remote, because the person selling them would want to sell them at a profit. If I got what would normally have been a £50 ticket for £300, I would be unlikely to get more than £300 if I tried to sell it, although that is always possible.

On the question about the disabled person’s ticket, such tickets are usually put aside for disabled groups and usually sold through them. I would hazard a guess that the person who originally had the ticket was disabled. They might or might not have been able to go, but if one disabled person cannot go, another should. Whether the person was disabled or not, what I object to is the fact that they were trying to make an obscene profit—in this case, £7,000 for a ticket that probably cost about £120. I would like to see such tickets go to other disabled people.

Mr. Ellwood: The hon. Gentleman has raised this example, and it is worth work-shopping it a little, if I can use that term. If the ticket is sold, it is surely the responsibility of Wimbledon, in this case, to ensure that it is accompanied by a blue card, for example. In that way, the operator can ensure that the disabled place goes to a disabled person. I do not understand why the Government should be involved. There is a responsibility and a duty on the operator to ensure that disabled tickets are taken up by disabled people.

John Robertson: I will come to the Government’s place in this a few pages further on in my speech. I hope that I can answer the hon. Gentleman’s question then, but if I do not, he should feel free to ask it again.

I gave one example, but there are plenty of others. Tickets for the Bon Jovi concerts, which are starting soon, were going for more than £400 on eBay. It was not disabled people, but ordinary people who were selling their £70 or £80 tickets for £400. The most expensive ticket for Take That came in at about £2,500, while the tickets for the Police concerts hit a record of about £3,500. There are lots of examples of people grossly and obscenely making money. My objection is that they are deliberately selling tickets to make money on the back of fans who probably should have got the tickets at the proper price in the first place.

I accept that the Government have tried to grasp the nettle to some extent. We have the proposed agreement on crown jewel events, but there is little detail, and I know from talking to people in the industry that they want some detail about what constitutes a crown jewel event.

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