Starmer’s Promise on Oasis Tickets Is Economic Illiteracy

Sure, some fans were undoubtedly frustrated when Ticketmaster’s dynamic pricing for Oasis seats hit them with higher-than-expected prices after long waits online. Being forced to accept or reject an inflated, time-limited, take-it-or-leave-it price offer was stressful, without question.

Yet Starmer’s response went beyond merely advocating for more transparent pricing. “We’ll grip this and make sure that tickets are available at a price that people can actually afford,” he said, in a classic bait and switch. Officially, his government’s review into dynamic pricing — that is, algorithmic pricing that adjusts near-instantaneously with demand pressures — is about fair dealing and transparency. His words, however, imply he can guarantee lower prices, as if his government knows what the true, fair cost of tickets should be.

If you think Starmer misspoke, think again. His cabinet appears to believe that market prices shouldn’t adjust to reflect high demand. Bridget Phillipson, the education secretary, told the BBC Today programme that the government “would like to consider” why holidays were more expensive outside school terms too. Really? Will Starmer and co soon be pressuring Center Parcs, Spanish resorts and airlines into fixed annual prices, irrespective of when people want to travel? The mind boggles.

This anti-market rhetoric taps into a broader recent trend towards “just price” economic illiteracy. We perhaps shouldn’t be surprised that high inflation has led to market prices becoming politicised. Many people mistakenly believe that corporate greed, rather than supply shocks and monetary mismanagement, caused the recent price level spike. Politicians, keen to shift blame for excessive macroeconomic stimulus, found it convenient to scapegoat companies for these economic realities.

Hence, our Competition and Markets Authority was spoiling for new powers to cap hand sanitiser and facemask prices during the pandemic. European governments capped energy prices after Putin’s invasion of Ukraine. In the US, Kamala Harris, the Democratic presidential nominee, champions rent controls, new laws to stop grocery prices rising significantly during emergencies and clampdowns on supposed “junk fees”. Starmer’s intervention suggests this “war on prices” is coming to Britain.

This kind of thinking, though, fundamentally denies basic economic truths. If you don’t want to use willingness to pay to allocate goods or tickets, the alternatives include rationing, queuing, lotteries, black markets, or, particularly when prices are capped by governments, shortages. There’s simply no way for everyone who wants them to get “affordable” tickets for Oasis, or any other event with such a limited supply and huge demand, despite Starmer’s claims to the contrary.

Historically, artists have underpriced concert tickets to ensure sellouts and to avoid alienating their low-income fans. Pricing below what the market would bear, however, often crystallised an excess demand for tickets, allowing touts to swoop in and resell to those willing to pay more.

Dynamic pricing algorithms help artists and venues capture some of this profit, but competing considerations prevent them from simply auctioning every seat. Yes, they want higher profits and obtaining them encourages adding dates. Yet they also know that providing a supply of first-come, first-served cheaper seats maintains a broader fan base and buy-in for future tours. Hence the uneasy mix of online queues and dynamic pricing we see.

While populist politicians rail against Ticketmaster as a “monopoly”, the band approves the pricing strategy. So, did Oasis get it right? Time (and the impact on their reputation) will tell. It’s remarkable, though, that a government focused on economic growth is already sidetracked by public grumbling about how sought-after concert tickets are allocated. Especially when the outcome Starmer promises — abundant, low-priced tickets — is unattainable.