Adam Smith Institute

Never depend on common sense from politicians; it's not their strength. But in rejecting the idea of a ban on secondary online ticket sales by both touts and bona fide organizations the Culture, Media and Sports Select Committee has come close to showing something akin to sense. While their criticism of the rogue elements of the ticket touting world is justifiable, they are right to ignore those calling for a levy on secondary ticket sales.

The entertainment industry should provide solutions to the problems of its own creation and desist in seeking government intervention. In attempting to squeeze more cash out of the punters through a further levy they are merely trying to keep their up-front ticket prices artificially low.

Within each segment of the entertainment industry, from sport to music, through to such things as opera, ballet and musicals, each has its own individual economy; yet touts appear regardless. The touts may have purchased tickets and be looking to sell for a profit, perhaps cashing in on sold out shows and the increased demand upon a scarce resource or they may be selling on the tickets of those who couldn't attend. Either way all the tickets have been legally purchased from the seller, so the seller should have maximised their profit from the event, in which case what happens to the ticket after that point is irrelevant.

The under-pricing of tickets creates an unnatural scarcity which is reflected in the prices paid to ticket touts. We should leave the touts alone, and start suggesting that the producers and entertainers charge the real market value of their product. They will know when they've succeeded in this – the touts will only ever be able to garner face value prices for the tickets in their hands.

And for those that can't afford the real prices, the providers should find a way of redistributing the wealth within the prices they ask.

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