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24 Apr 2008 : Column 523WH—continued
Despite all the divisions, the Committee found that certain practices of secondary sellers were distasteful. They are not the angels that the hon. Member for Shipley portrays. Indeed, he agreed that we should urge the Government to look at three particular areas. One was the selling of free tickets, often for charity events. The second was the selling on of reserved tickets for particular groups such as the disabled and children. The third was the selling on of tickets that were reserved in allocations for ordinary grass roots members of amateur sports clubs. That is explicitly reflected in the report, and I shall address it towards the end of my remarks.
I worked for The Observer before I came into the House. When I looked at the news pages on the weekend and saw a piece written by a former colleague, Gaby Hinsliff, who is the political editor, my heart jumped. I knew that the Minister was sympathetic—probably much more sympathetic than his colleague, my right hon. Friend the Minister of State, Department for Culture, Media and Sport, was when she was in the Department of Trade and Industry—to a tougher line and to more help for the crown jewels, for example. I knew that the Secretary of State, who is a keen footballer, was more sympathetic as well, so I thought that, with the article, I would be 4-3 down at the end of our report, but that it was only half-time. I had the Chairman, potentially, and two Ministers, so the final score would be 6-4, and I had visions of the hon. Member for Shipley mounting the rostrum to collect his loser’s medal. However, I worked on Sunday newspapers long enough to recognise an overwritten article when I see one, so I waited for the Government response the following day.
I welcome the Government response. It does more than inch in the right direction. It recognises the concerns, but, based on some of the evidence that was given to us, I suspect that Ministers are up against a brick wall, given the attitudes of some civil servants, not least those in the former DTI, where I suspect some Ministers are simply captured, but I shall not name names. The Minister used to be a consumer affairs Minister, so he will know very well what I am talking about.
In many respects, much as I welcome the tone of the Government response, I would like more substance, and I hope that the Minister will be able to provide more later. Like The Observer article, there is a lot of great wrapping, but I want to see the present from the Minister underneath.
I would like to make a few remarks on some aspects of our report and the Government response. First, on the voluntary code, I agree that legislation should be the last resort. I agree with the hon. Member for Shipley that legislation has to be well thought through, as it can often have unforeseen outcomes, particularly if there is a blanket approach to specific abuses. However, as I said, we do have legislation to protect the 2012 Olympics. It is an irony to many people in the sporting sector in particular, and to people such as Mr. Goldsmith, that we will have protection for events such as handball, volleyball and synchronised swimming, which are far less popular than the six nations, a cup final or the Wimbledon final.
The Government say that they will discuss the development of a voluntary code of principles with key stakeholders. The response states that
“STAR”—
the Society of Ticket Agents and Retailers—
and the OFT are close to agreement on the draft model terms and conditions.”
That does not really take us any further than we were when we conducted the inquiry. In fact, the draft code was due to be produced by the Office of Fair Trading last August, so I would like to get a feel from the Minister on progress. If it is not possible to agree a draft code—I understand that the secondary ticketers are completely in opposition—what will be the next step? The Government have made some noises that there may need to be action down the line if they cannot get a voluntary code. I welcome that, but I would like to get a better feel for what might be intended in substance.
The Chairman mentioned that one way the regulators might show some teeth is to threaten a test case if the secondary ticketers do not come to the table and properly agree a voluntary code. When I was talking to John Fingleton, the chief executive of the OFT, in front of the Committee, I used the example of the banking industry. The OFT had already taken a test case on credit card charges, and people were crying out for it to move on the banking sector on overdraft charges. There was a precedent for doing so. Paradoxically, a couple of weeks after our session, the OFT opened a test case against the banks on overdraft charges, which it won today. I will obviously claim credit for that, but as far as the OFT is concerned we have got to the position where, as the Government’s response says:
“If in the event a voluntary agreement within the ticketing industry is not reached, the OFT would need to consider the appropriateness of any court action at that time, according to the principles of proportionality and”—
“administrative priority.”
The OFT is saying publicly, “Actually, this is not at the top of our agenda. We’ve got far more important things to do, what with the banks and the construction industry.” That is all very well, but it does not actually say that because it would be signalling that it has no teeth, and would not use them anyway, and has no willingness to bite. That is a mistake, in terms of encouraging the industry to sign up to a code.
Philip Davies: The hon. Gentleman used banking as an analogy, but would he not agree that a better analogy is the net book agreement? When I worked for Asda, we challenged the net book agreement, under which publishers set the price of a book and retailers had to sell it at that price, with a restriction being placed on their selling it at any other price. We at Asda challenged that in the courts and the net book agreement consequently collapsed, with the effect that people can sell a book at whatever price they want to, irrespective of what the publisher states, even though the book is their intellectual property. Would it not be strange, in respect of tickets, for us to go in the opposite direction to the net book agreement, which collapsed a number of years ago?
Paul Farrelly:
I shall answer that head-on by saying that there were issues for small booksellers then. But if
the hon. Gentleman looks at the Competition Commission’s investigations, there are ongoing concerns about whether supermarkets, such as the hon. Gentleman’s former employer, are anti-competitive when selling things below the cost of production simply as loss-leaders to invite people in. So there may yet be an issue there. But what the OFT has succeeded in doing now, finally, with the bank charges is at least the first step.
I wonder whether the hon. Member for Shipley, with his “all’s fair in love and war, the state should stay out of it” attitude, thinks that the OFT should have taken that case in the first place and should have stood up for consumers in the way that some of us would like the Government or the OFT to stand up for consumers of sports and music events.
Philip Davies: The OFT will stand up for consumers, and thank goodness it does. That is why it has concluded that ticket touting—the secondary market—works more in the interests of consumers than against them. The OFT is doing exactly what it wanted and standing up for consumers.
Paul Farrelly: I hope that hon. Members will bear with me in this game of table tennis across the Chamber.
The OFT’s seeking of a voluntary code shows that there is an issue to be addressed. Clearly, had it got more staff and resources, this issue might be higher up the agenda compared with other items. The Government’s response to some of the criticism of the OFT has missed the point. During the various sessions and in the report, I was criticising the OFT for the amount of time it was taking to reach a decision, not for not addressing the issue at all. I urge more speed.
I should like to address what might be covered by the voluntary code. We are at a disadvantage because we still do not have a draft to comment on, either in the Government’s response or in this debate. The Committee focused on three instances of abuse: free tickets; allocation for the disabled and children; and the situation regarding amateur sports clubs. Clearly, with regard to free tickets, the Government could not be clearer, because their response says:
“The Government agrees with the Committee’s views about the sale of free tickets”.
However, I am afraid that they are silent on the other categories. I should like to hear a little bit more from the Minister about whether other categories of concern might be included in the draft code.
In respect of amateur sports clubs, which are close to my heart through my involvement in rugby union, the Rugby Football Union distributes tickets to amateur clubs by allocation. Most of the clubs are scrupulous and give their members a fair chance, often by ballot, to get those tickets, but a small minority are unscrupulous. A small minority of clubs, officers or lucky recipients will simply sell their tickets on the black market. That denies ordinary members who want to go to a fixture a chance of doing so, be it Mrs. Bloggs or not. It also places a disproportionate cost for policing fixtures on the Rugby Football Union and all the administrative bodies. In 2006, for example, 157 RFU clubs, schools and universities, and some debenture holders had their allocations reduced because they sold their tickets on the black market, in
breach of the terms and conditions. The cost of that is high for the administrative body, which takes out resources that could otherwise be ploughed into developing the game and grass-roots sport.
I accept some of the points that have been made. The industry should do more to identify certain tickets and, by making them appear different, highlight the risk to those buying them and those willing to sell them of people with such tickets being refused entry. I also accept that there must be much better mechanisms for authorised reselling. For example, during the rugby world cup in Paris—this has nothing to do with the home unions—there was not a reselling mechanism. Frankly, most of the Kiwis and Aussies, whose teams were knocked out earlier, were still in Paris against their will. It was a great joy to see rows of miserable faces outside the pubs and cafés of Paris, but they should not have been in that situation and there should have been an authorised reselling mechanism. I hope that, when we win the world cup in 2015, those arrangements will be far better administered by the home unions here or the English RFU than they were by the French and the International Rugby Board. I would still like to see some protection in the code, when it emerges, for ordinary members receiving allocations from amateur sports clubs.
I want to touch on the practice, which was criticised in the report, of so-called futures selling, whereby tickets are advertised for sale by secondary sellers before they have even been marketed. The likes of eBay, Seatwave and viagogo have definitely been selling tickets that they could not possibly have. There are clear consumer protection issues. Hon. Members only have to look at the evidence provided by Harvey Goldsmith about eBay’s attitude to people who offer tickets fraudulently: people pay up and the tickets never appear, but eBay effectively does not want to know. Now, eBay is a big corporation and the buyers are small individuals, so what can they do? The Department for Culture, Media and Sport and the Department for Business, Enterprise and Regulatory Reform might want to look at wider issues of protection regarding buying on the internet.
Philip Davies: The hon. Gentleman ought to qualify his remarks slightly. Internet companies such as Seatwave, eBay and viagogo have excellent refund policies—far better, I might add, than those of the primary ticket sellers. So, as he well knows, people who buy a ticket that does not materialise would definitely get their money back from those websites. I hope that he will make that clear. This is not a question of consumer protection. The consumer is often better protected by these websites than they are by primary sellers.
Paul Farrelly: I suggest that the hon. Gentleman look carefully at some of Mr. Goldsmith’s evidence about eBay. The other resellers that the hon. Gentleman mentioned have refund mechanisms, but there is a practice within the industry—so that the policy can be underwritten—whereby the agreement that they make with sellers is tantamount to collusion to receiving tickets from sources that will breach terms and conditions. That is another area about which I am concerned, because the practices of the secondary sellers certainly encourage clubs and members to breach those terms and conditions.
The hon. Member for Shipley mentioned one company. We heard from Seatwave—Mr. Joe Cohen, its chief executive gave evidence to the Committee—which denied that such a thing happened. Yet we had evidence that Seatwave was offering tickets for the rugby six nations championship in 2008 that were not yet designed or printed. His evidence was contrary to what we were seeing. Following the Committee’s report, we received what I can only call an ill-advised letter from Seatwave making serious allegations and questioning the report. I shall read a relevant passage in which it justifies its practice of advertising allocations that clubs knew that they would get. Joe Cohen’s letter stated:
“It was, however, perfectly valid for ‘tickets’ to be offered for sale as the seller’s entitlement to the entrance to the event was secure. The entitlement to attend an event was legitimately being offered for sale on Seatwave, not the actual purchase of a paper ticket—a point that the RFU misled the committee on.”
That was a serious charge against the Rugby Football Union, so we invited the RFU to respond. Nick Bunting is its Government relations director, and Paul Vaughan, its business operations director, wrote to me stating:
“Seatwave make the point that it is perfectly valid for future tickets to be sold on the basis that the seller’s entitlement to the entrance to the event is secure. This is not correct...Entrance to a major international at Twickenham is only secure if the ticket holder is entitled to that allocation. If a buyer purchases a ticket from the black market, or secondary market, as Seatwave refer to it, the RFU reserves the right to deny entry to the ground.”
He then cites some of eBay’s practices, and states that individual tickets on Seatwave
“for the England v Ireland match on 15th March 2008 were being offered to buyers...at up to £1400 each.”
The highest face value was £70. Mr. Vaughan continued:
“In all cases of RFU tickets Seatwave are inducing a breach of the ticket terms and conditions.”
On the so-called robust consumer protection system to which the hon. Member for Shipley referred, Mr. Vaughan said:
“Seatwave have no right to purchase tickets for major internationals at Twickenham either through an allocation process or an entitlement...Seatwave purport to have a ‘right to purchase alternative tickets’ but this translates into the reality which is a contract between the seller and Seatwave allowing Seatwave to use the seller’s money to acquire tickets in the black market. The RFU is obviously not party to this agreement...If Seatwave buy on the black market they are encouraging the seller to break the ticket terms and conditions...The RFU reserve the right to cancel”
those tickets. There are clear consumer protection issues here. The practice is unacceptable, and I want that to be included in the draft code. Seatwave’s response was too clever by half.
I shall come to a conclusion because I know that other hon. Members want to speak. Another consumer protection issue that we address in the report is that in trying to protect people against fraud and denial of entry, it would be helpful if tickets advertised on exchanges had block, row and seat numbers printed on them, so that people could be sure that they existed and check them out.
I welcome the sympathetic tone of the response, the direction of travel, and the Government’s approach to
the crown jewels list, but I would like to hear a little more detail in the Minister’s response about some of the issues that we raised in the report.
4.23 pm
Joan Walley (Stoke-on-Trent, North) (Lab): It is a great privilege to take part in a parliamentary debate with a ringside seat as a spectator of the inside workings of the Culture, Media and Sport Committee. All parliamentarians want to see how well our Select Committees are not only scrutinising what the Government are doing, but contributing to future policy and guiding the direction of travel. Stoke-on-Trent is the birthplace of Robbie Williams, and it is good to hear in this debate that he is recognised as a national icon. So many people in Stoke-on-Trent and the borough of Newcastle-under-Lyme want ringside seats at his concerts.
The debate has shown that the Government’s response to the Committee’s detailed report on ticket touting sets out the importance of ensuring that major sporting and music events should not go ahead if they exploit fans. In taking the report forward—whatever differences of opinion there may be, or votes against the majority view—the thrust of the Government’s policy should be to be fair to fans and to ensure that ticket touting does not undermine the integrity of our sporting organisations. They must ensure that ticket touting does not result in concerts that only those with a lot of money can afford to attend.
The Government must ensure that in the cultural life of our cities and towns—the Axis festival is starting this evening in Stoke-on-Trent, and I hope that we shall complete our proceedings in time to enable me to get home to attend its launch—we have the equivalent of grass roots music, so that we have the big, showcase, crown jewel concerts. They must deal with ticket touting and ensure that fans, concert-goers and followers can be there at every step along the way when they want to. I hope that the report will inform the Minister’s general direction of travel.
At this stage of the debate, almost everything that can be said has been said, and I want to broaden it. I congratulate the Chairman of the Select Committee on the way in which he spoke about its conclusions this afternoon and clearly set out the role of secondary ticketing and whether there is a third way of dealing with it. I very much hope that the Minister will find that third way. In the environmental area, I do a lot of work on my Select Committee and voluntary action has been a much more forceful route than regulation or law enforcement. I hope that the Minister will be able to adopt that approach.
To use an analogy with environmental issues, prevention is often the best cure. Having read the report and given thought to the evidence, I wonder whether in its inquiry, the Select Committee was slightly narrow in terms of the bigger picture. I suggest to the Committee and the Minister that, when they consider cultural diversity in music and sport, and fairness for everyone, they should also consider what can be done to prevent ticket touting.
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