My Lords, many of us love British sport and our creative industries. This love unites most of us in the House and certainly those in the Chamber today. As the noble Lord, Lord Stevenson, said, it has been a very good debate. We have had a star cast, including ladies of sport—the noble Baronesses, Lady Grey-Thompson and Lady Heyhoe Flint—and the noble Lord, Lord Holmes, so we have had real experts.
Noble Lords will know that I take a great deal of personal interest in this issue. In fact, I should almost declare an interest as a mother of three cricketers. I have met the England and Wales Cricket Board, the organisers of Wimbledon and the Rugby Football Union. I have also met Which? and I am aware of the interest of UK Music, which I meet on other things. I have actively engaged with Mike Weatherley MP and his All-Party Parliamentary Group on Ticket Abuse. I have been working with these bodies to try to get to the core of this issue: what we can best do to help and protect the fans? It is the fans who really matter in this equation.
I congratulate the noble Lords, Lord Moynihan and Lord Clement-Jones, and the noble Baroness, Lady Heyhoe Flint, on their extensive work on this issue and the expertise they always bring to our debates. Most fans buy tickets direct from the venue or the organiser, often well in advance of the event. To pick up a point made by the noble Baroness, Lady Heyhoe
Flint, debenture holders and sponsors often get ticket allocations well in advance, which is why there are sometimes tickets on sale well ahead of events. A lot can change between a ticket being bought and the event itself—people fall ill or make other plans—and these fans then resell their tickets to other fans. This is the market we are discussing today, for which there has been great support. I agree with the All-Party Parliamentary Group on Ticket Abuse when it says that,
“the existence of a secondary market is justified by the need of consumers to pass on tickets bought for events that they can no longer use”.
Let me be clear: we believe fans should be protected in this market.
If the House will bear with me, I will respond to the debate and will then set out some new plans to take things forward. The noble Lord, Lord Moynihan, talked about fraud. Fraud is a criminal offence under the Fraud Act 2006. It covers activity by all sellers, including consumers and traders. Many of the actions referred to are fraud: selling tickets you do not have and have not purchased is fraud; traders impersonating consumers to sell tickets are committing criminal offences; and, arguably, selling tickets knowingly in contradiction of their terms and conditions without informing the consumer of this may be fraud.
Repeating in the Bill that fraud is a crime would not make it any more illegal. What matters to fans, and many of your Lordships, is enforcement of the law that we have. There is fraud in the ticket market: we do not dispute the numbers quoted from the National Fraud Authority on this. In the specific case of ticket fraud, it reports £1.5 billion of losses. That is not a number to be ignored and we are not going to ignore it. As my noble friend Lord Grade said, there is a serious problem.
The Government have a huge focus on cutting economic crime, and we have created a powerful Economic Crime Command within the National Crime Agency to drive this forward. We have also strengthened the reporting and intelligence arrangements for fraud. ActionFraud is now the single national reporting centre for fraud and financially motivated cybercrime. Since 1 April this year, responsibility for ActionFraud rests with the City of London Police, bringing it closer to the National Fraud Intelligence Bureau. This allows links to be made between disparate crimes that would otherwise not be connected and it has led to a significant increase in the reporting of fraud. The Government are also investing £860 million through the National Cyber Security Programme, which includes work on online fraud.
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The efforts of the police during the Olympic and Paralympic Games have been referred to, including by my noble friend Lord Deben. We have learnt from the Olympics how better to work with the enforcement community and the ticketing marketplaces, but of course, as has been said, the Olympics had separate legislation that banned resale. A great deal of special enforcement effort was put into the Olympics. Even so, there were some empty seats. The Olympics were
special but they were different. That system is not appropriate for the great range of tickets that we are talking about today.
I assure the House that the City of London Police will continue to undertake work against ticketing fraud as part of its overall response to the problem of fraud; for example, it has already been working with the organisers of the Rugby World Cup to exclude those participants in the ticketing lottery who have links with previous reports of fraud. It is also working in partnership with the Get Safe Online campaign to ensure that advice on staying safe is made available to fans who may be targeted by ticketing scams.
I move on to consumer law. As has been said, a substantial body of consumer law is in place to protect consumers, wherever they buy their tickets, and this is backed up by enforcement and sanctions. The Consumer Protection from Unfair Trading Regulations 2008 protect consumers from misleading actions. We have also introduced the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which ensure that buyers get the information they need. We have spelt out in guidance what information a trader must provide. It sets out plainly what they have to do, and the courts will often rely on such guidance in interpreting the law. I add for the benefit of my noble friend Lord Deben that these sets of regulations stem from EU directives. I agree with him that we need to be a major and constructive force in Europe, so I do not think that we should sweep away provisions in this area that come from the EU.
I also want to address the suggestion made in the debate that the inclusion of “I don’t know” drives a coach and horses through these regulations. That is not the case. There are allowances for the practical reality that there will be some details that a seller just will not know; for example, if the tickets are for a standing area, they will not have a seat number. If traders know details but do not give them or say that they did not have them when they did, they will be in breach of the 2013 regulations. The requirement is to provide the main characteristics, and that is set out in UK law and in the EU directive. If details are not given and traders claim that they did not have them, it is for them to prove that they could not give them; for example, if it was simply the case that they had not opened up the confirmation e-mail to find the seat number, that would not be acceptable.
In response to the third question from my noble friend Lady Heyhoe Flint—she gave me an exam paper—regulations do not rely on guidance. The guidance merely aids interpretation, which is ultimately a judicial matter. The definition of a trader follows the EU directive, and it has been widely used for some time. The courts will be the final arbiter of this term. Of course, the regulations are not voluntary. They are secondary, not primary, legislation, but that does not mean that they are not legally binding. They are binding and a civil enforcement regime led by the Competition and Markets Authority is behind them. I will be passing on the Hansard report of this debate to the authority, and indeed I will also be passing on the helpful suggestions from my noble friend Lord Younger about how we might improve enforcement.
Although the guidance is not statutory, traders in breach of it are very likely to be in breach of consumer contract legislation. I should add that criminal sanctions are available if the 2008 regulations are breached: a fine of up to £5,000 and up to two years in prison. Enforcement is by local trading standards services and the Competition and Markets Authority, which I have already mentioned.
We believe that the best way to protect fans from fraud and breaches of consumer law is to ensure that they have a safe place to buy and sell tickets. It would be “Christmas for ticket touts” if government regulations were to push fans away from these safe places. One in four resales takes place outside the venue—the most unsecure and risky place for fans. Almost half of resales take place through online classified ads. These numbers are already too high. We should be nudging consumers away from these fora, not increasing the incentive for them to use the black market.
I agree with the brave intervention from my noble friend Lord Stoneham, as well as with the comments of my noble friend Lord Borwick, about the risk of tickets being cancelled. There has been a very welcome trend in recent years towards safe, tailored online ticket marketplaces and away from touts. These websites offer a high degree of consumer protection—infinitely more than was there before and often in excess of what the law requires. These sites have processes in place to prevent, discourage and punish fraud, and I know that they work with the enforcement authorities. Additional regulation via this amendment, such as long forms for individual consumers to fill out when they sell, would only deter consumers from using safe sites. No one likes filling in forms; no one likes being told what to do. If we try to do that, there will be a grave risk that fans will move to unsecure sites or to buying tickets overseas.
That brings me on to where we see problems with the amendment. I welcome the changes made to it since Committee but I am still not able to support it. It goes far beyond guidance and it would be a much bigger burden on consumers and business than the status quo. The fact is that it is not light touch, to use the words of the noble Baroness, Lady Crawley. It is certainly not feather-light. I am against regulating consumers, by which we mean fans. Sometimes a fan cannot attend an event, for reasons that I have stated. I truly believe that supporters should be free from government regulation. Given that over 75% of our fans think that they have a right to resell their ticket once they have paid for it, regulation may in any case cause them to revert to the black market.
The information to be provided would be a considerable burden on both traders and consumers. Providing “all relevant information” is a huge ask, as I think the comments from my noble friend Lady Heyhoe Flint showed. I am particularly worried about requiring the name of the seller for individual consumers. That seems like an open door to identity theft. When experts such as the Metropolitan Police and eBay advise internet users not to give their real name online, I would be uncomfortable about requiring that.
Likewise, having a requirement, such as in subsection (7) of the proposed new clause, to state whether a ticket is sold,
“in contravention of the terms and conditions”,
on the face of the law makes me distinctly uncomfortable. I draw the House’s attention to the scope of this amendment, which covers all tickets—from those for the Royal Opera House to those for the Hay literature festival, and from £500 tennis tickets to £10 Young Vic tickets. Over 30% of UK adults buy tickets to live events every year, and I am reluctant to introduce regulation with this wide scope. I agree with the Culture, Media and Sport Committee, which said:
“Any attempt to ban the secondary market outright would also be a very serious step in that it would criminalise what has been a perfectly lawful activity”.
That is not what is being asked for, but that, I think, is the risk.
I must mention the requirement to comply with EU law. There are specific requirements not to go beyond what the law requires and the consumer rights directive is partly subject to such a requirement. Our analysis is that this amendment could breach that requirement.
To return to the exam paper from the noble Baroness, Lady Heyhoe Flint, on her first question we do not agree that the amendment places a low burden on the seller, for the reasons I have stated. The requirement for all relevant information by all sellers is substantial. On her second question, consumers must, of course, be protected from being misled. That is why it is essential to keep sales above ground and in the open.
I turn finally to what we are doing. We should not undermine the resale market. We should ensure that consumers are protected whenever and wherever they buy tickets. We agree that there is an issue around consumers selling large batches of tickets for a profit and we should discourage this behaviour and protect consumers when they buy from these individuals. These sellers often impersonate real fans in order to sell without complying with consumer law—something that is already an offence punishable by a fine or imprisonment. I can therefore announce today that we will begin a programme of work to address this.
First, we will work with the marketplaces to deter those sellers. We will ensure that it is very clear to those sellers that they will be committing a criminal offence if they impersonate a real fan—a genuine consumer—to evade consumer law. We will also ensure that sellers are aware of the information they must provide to the buyer. This will take the form of wording on the sites based on what eBay uses now, in clear, easy-to-understand language.
As the second part of our programme—and picking up something that the noble Lord, Lord Moynihan, said—we will include in our guidance on the Bill detail on what constitutes a “trader”. This is a point of legal detail but I think from today’s debate it is a very important one. I do not want these sellers to be able to claim that they are a consumer and therefore evade their obligations under consumer law based on the legal definition of trader. The guidance will state that it includes people who have a day job but also sell tickets for profit on the side; we had an example of a BA pilot, whom we spent a lot of time on in Committee. They would be traders not consumers and therefore have to operate transparently as required in the law; for example, an office clerk who has no interest in
“X Factor Live” but buys and sells “X Factor” tickets to top up his pay would be considered a trader and therefore have to provide information about himself and what he was selling in order to protect consumers.
I have spoken at length, but this is an important issue. I have studied this issue intimately with an open mind. After talking to all interested parties, and given the very recent changes made to legislation, I am not convinced that legislation is the right answer. However, I am convinced that we can always do better at enforcement and ensuring compliance. The online ticket marketplaces provide a safe place to buy and sell online. We must not push the industry back underground. If we do that, we will create the conditions which allow fraud and scams to flourish. We have taken action and I have committed today to a package of measures to do more. Work is being done by the City of London Police to tackle fraud and we are deterring criminals from the market and committing to give more information to sellers.
However, I am keen that the Government should keep a beady eye on the consumer regulations and on how the revised BIS guidance and other aspects of ticket practice and regulation are progressing. My officials in BIS will therefore host, in partnership with DCMS, a round-table meeting in June to hear stakeholders’ views on this and ensure that this issue is not put on the back burner and that all parties, from the Competition and Markets Authority to the Home Office and police, are involved.
I have responses to the questions from my noble friend Lord Holmes and others, which I think I will pass on in bilateral discussion. I agree with my noble friend Lady Wilcox that rewriting the law is the wrong way to tackle this issue. Legislation exists and I think it can be enforced better. We are committed to taking action and to keeping this issue on the agenda. I therefore ask the noble Lord to withdraw his amendment.