It is an honour to serve under your chairmanship, Mr Crausby. I believe that the free market is by far and away the best method by which to allocate resources effectively. Provided the often-quoted five criteria regarding the definition of perfect markets—identical product, all firms are price takers, all firms have a relatively small market share, perfect knowledge, and no barriers to entry or exit—are mostly met, the market should be left alone to do what it does best.
Consumers should have the ultimate say on how products are delivered and at what price. However, with live music and many other activities where a finite amount of tickets are available, there is a major perfect market imperfection. Music and other forms of creative expression are vital to the British economy—from earnings to employment—and for quality of life as well. The performing arts and sport sustain employment and tax revenues that benefit all our citizens. Some 1.5 million people are employed in the creative industries or in creative roles in other industries. Exports of services from the creative industries accounted for 10.6% of the UK’s exports of services, and there were an estimated 106,700 businesses in the creative industries, which represents 5.1% of all companies. British musical talent earned £139.6 million from overseas earnings in 2008. The top three earners, in order, were the Police, Iron Maiden and Coldplay. The Performing Right Society for Music has said that Britain is the No. 1 home of musical talent in the world. In short, it is worth us all taking an interest in the continued prosperity of the creative industries.
There is, however, a blight that creams off revenues by exploiting an imperfect market and contributes nothing to the creative copyright holders, or indeed the venues and staff who put on events. The blight consists of those who profiteer by exploiting excess demand. In rapidly changing times in the internet world, what was previously considered quaint and not much of a problem, or indeed a possible service, has now been overtaken by industrial-scale activities at the touch of a button. Government have not kept up with the rapid pace of change.