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House of Commons

Wednesday 10 February 1999

The House met at half-past Nine o'clock


[Madam Speaker in the Chair]

Art Market

Motion made, and Question proposed, That this House do now adjourn.--[Mr. Robert Ainsworth.]

9.34 am

Mr. Peter Brooke (Cities of London and Westminster): My first, very pleasant, duty is to thank you, Madam Speaker, for the serendipity under which we meet this morning to debate the British art market, in the context of the European Union, within 15 days of a critical Council meeting of EU Trade Ministers, with the seemingly innocuous, but potentially devastating, subject of droit de suite on the agenda.

Secondly, I must again declare my own unremunerated interest as president of the British Art Market Federation, a body created in the closing years of the previous Government, at the request of that Government, to provide a single conduit for the market to make representations to the three Departments that share umbrella responsibility for different aspects of the market's affairs. In alphabetical order, those Departments are the Department for Culture, Media and Sport, the Department of Trade and Industry--appositely represented today by the Minister for Competition and Consumer Affairs, given that the Council of Ministers meets on 25 February--and Her Majesty's Treasury. I pay tribute to my hon. Friend the Member for South-West Hertfordshire (Mr. Page), who initiated the British Art Market Federation, and to the way that Ministers have acted to date on behalf of the market. I include the Prime Minister in that tribute.

Thirdly, I thank parliamentary colleagues who are attending this earliest of events in the parliamentary day. I risk sounding like the dodo in "Alice's Adventures in Wonderland" by saying that all have won and all shall have prizes, but I shall certainly embrace brevity in the hope that the maximum number of my colleagues can speak, and I hope that they will follow my example. I am particularly grateful to my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) for encouraging me to initiate this debate.

Although I risk playing the dodo, that charge cannot be laid against the British art market. The market's history goes back centuries, but its practices, services and scholarship are highly contemporary. Its integration with the continent is long and profound. If a flood of church art and church furniture left this country for the continent in the aftermath of the reformation, a similar tide returned during the neo-Gothic period of the first half of the previous century under the influence of the younger Pugin, who did so much to adorn this Palace.

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If it is timely that we meet within 15 days of the Trade Council, it is also timely that we meet within 10 days of the 350th anniversary of the death of Charles I, whose martyrdom, in the eyes of some, makes him the putative patron saint of British art collecting--a practice that was reinforced by the grand tour of subsequent centuries. Continental artists and craftsmen have been as welcome here as they have been prevalent--from Rubens, Holbein, Van Dyck and Kokoschka to French carvers and Italian plasterers--and vice versa.

A peculiarly British contribution to the market is our genius, attributed to us by Bonaparte, as shopkeepers, which covers a multitude of skills and functions. The British Art Market Federation is made up of 15 different organisations and, if ours is a niche market, it is a larger niche than most: more than £2 billion is involved and it employs more than 50,000 people. The market can be read across into hotels, restaurants, other shops and theatres--many of which are concentrated in my constituency--as the magnets of our great art fairs bring foreigners from outside the European Union to London.

If that market leadership were a lonely issue, the preoccupation of the European Commission with level playing fields might be more tolerable. What is ultimately anti-European about the Commission's interest in the market is that the practical consequence will primarily be not to transfer business to the continent, but to move it inexorably from the European Union to the rival markets of Switzerland and the United States. Last week, elsewhere in this Palace, during the Standing Committee proceedings on the Greater London Authority Bill, I tabled an amendment stating that the mayor of London should pay due heed to London's global competitiveness. In the context of today's debate, a similar duty should notionally be laid on the Commission: to pay due need to the European Union's global competitiveness.

The great Bagehot remarked that in 1802 every hereditary monarch in the world was insane. In this year of grace, I do not want to lay such a charge against the entire Commission, but there is a manic quality to its thinking on the subject of our debate. Europe's economic welfare is not so well founded that we can afford to behave like Gadarene lemmings and cheerfully expel our traditional businesses to Geneva and New York. Why do I say that? Because, in a world of narrow margins, arbitrary transaction costs are slow poison to the competitiveness of even the healthiest of industries. The market here is threatened, first, by the charge of droit de suite--the imposition of an extra cost whenever a work of art changes hands up to 70 years after its creator's death. Colleagues will dissect the absurdities, contradictions and excesses of that apparently virtuous principle. It is threatened, secondly, by a doubling of value added tax in this country on works of art imported into the European Union.

My principal charge against the Commission is its unwillingness to face the reality that those moves will not enlarge the EU market; they will simply export trade and jobs to competitors beside Lac Leman and the Hudson river, who could be forgiven for scarcely believing their good fortune. The Commission has an obligation to us all to explain why that analysis is wrong. Its inadequate economic justification for the droit de suite proposal two years ago was subject to acute criticism, which inany intellectually rigorous climate called for a rejoinder,

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but answer came there none. The analogous request from Her Majesty's Government for an impact study has been similarly disregarded.

The Commission was due to publish a review of the effects of VAT by the end of last year. There are rumours that it will dismiss the risks, but six weeks into the new year it has not been published. That might be charitably attributed to embarrassment about its intellectual rigour, too.

The great artist, Max Ernst, told the story of how his father had painted their garden omitting a tree for reasons of composition, but had then been so troubled by what he had done that he had gone out and cut down the tree. That story has two morals in today's context: first, that we are in danger of needlessly cutting down one of the great trees in the European forest; and, secondly, that the event is not being attended by the intellectual rigour that Max Ernst's father displayed.

One rejoinder that the Commission might make is that the percentages are small and their effect is being exaggerated. By the same lucky chance that is giving us this debate, last Saturday our television screens showed a film of that European cockpit, Yugoslavia, during the last war. A black American soldier complains to Edward Fox that his high explosives seem to have had no visible effect on the dam that they seek to blow up. Edward Fox languidly replies that he must not be in a hurry--the dam is very large and the high explosives very small; the high explosives will create a wound through which nature will then do its work. Just such a sequence of events threatens the British art market, and thus the European art market as well. Initially, the effect may seem small, but the nature and essence of markets will ensure that, in the fulness of time, the imbalance of costs will transfer advantage massively outside the European Union.

The percentages may seem small, but they deter trade. In a world where 70 per cent. of the droit de suite paid in France in 1996 went to the six or seven impressionist families, a small percentage of a large sum would still be massive.

What are we asking of those on the Treasury Bench? My right hon. Friend the shadow Chief Secretary, whose pamphlet last year did much to illuminate the issue, will spell out the official Opposition's view. My plea, which is understandably on behalf of the British Art Market Federation, is for time. Time in the EU means derogations--a derogation of decent length in connection with droit de suite, if that directive is to come, and an extended derogation for VAT. I ask for time because, in the recent past, time has not been used by the Commission, to use my metaphor of the dam, to test the dam to see how genuinely secure it is against the flood waters moving out of the EU, as the ecclesiastical furniture moved out of this country in another period of seismic European development after the Reformation.

I close on a personal note. I have lived thrice on the continent: twice within the European Union and once outside. I have no little sympathy for the European ideal, but it troubles me when I see us collectively acting contrary to Europe's best interests in creating an unnecessary level playing field, as in the garden of the Ernst family. Composition has much to recommend it, but global competition is ultimately all. However, my views

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are as nothing compared to the frustration and sadness of the natural internationalists who make up the art market in this country.

A moment ago, I mentioned Yugoslavia. One of the taproots of our European culture is the Homeric saga of the Trojan war, excavated by a great German scholar. Contemporary scholarship says that that war was about competition for trade routes rather than possession of a great beauty. It would be sad today if we were to lose not only the trade routes but the beauty.

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