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9.44 am

Mr. Tam Dalyell (Linlithgow): That eloquent and elegant introduction by the right hon. Member for Cities of London and Westminster (Mr. Brooke) encapsulated the problem. It now behoves me to be succinct.

Incidentally, Madam Speaker, one of the shortcomings of these one-hour-and-25 minute debates is that Ministers are rarely given an adequate time to reply. The Minister in this debate has a great deal in the opening speech to which to reply.

Madam Speaker: Order. I regard these debates as a priority for Back Benchers.

Mr. Dalyell: Exactly, but Back Benchers deserve a reply to their questions; thus my speech will be in the form of questions.

The issue of droit de suite--part of the copyright law in several other EC states, which entitles artists or their heirs to receive a payment whenever an original work of theirs is resold while those works are in copyright--presents problems. What discussions have taken place with our European partners about their copyright laws? This issue is crucial to VAT harmonisation, which is partly at the root of the problem.

My second question concerns resale rights. The Government have described how, during our presidency, the UK was able to call for other member states to make cost-benefit analyses, and for the Council working group under future presidencies to study those. The then Minister, my hon. Friend the Member for Leeds, West (Mr. Battle), said:

In December, the then Minister for Arts, my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher), spoke to the French Minister of Culture, Mrs. Trautmann, who said that France had not made a study of the resale right but would ask the Commission to make one. What has happened about that?

My third question concerns an answer from my hon. Friend the Minister for Competition and Consumer Affairs:

That raises the question of the 2.5 per cent. and the 5 per cent. As the right hon. Member for Cities of London and Westminster said, 50,000 people are involved--the

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art industry is bigger than the music industry. The many related services, not only in London but in other centres such as Edinburgh, include picture restorers, framers, conservation specialists, shippers, insurers and exhibition organisers. Many substantial jobs are at stake, and the multiplier effect goes--I shall not say across the economy, as that would be to over-egg the pudding--very widely.

My fourth question concerns VAT and paperwork. May I ask a heretical question? Is it desirable for Europe to have VAT on works of art at all? The sum of it is that we lose out to Switzerland, and certainly to the United States. Is not import tax inappropriate? European Governments might get more into their treasuries out of returns from a healthy art market than they do by messing around with import tax.

My final question is on a slightly different issue. It concerns fraud and theft in the art market, which is a growing problem, especially in relation to bespoken theft. There are now specialists who do feasibility studies on action in transport getaways, break-ins, decoys, and all the other elements of highly professional art theft. I know that the Art Loss Register and James Emson do extremely good work. What is the police strength? Can my hon. Friend the Minister get figures from the Home Office on the seriousness of purpose of the police in this matter? I understand that art police resources have improved greatly in the past few years, but a decade ago they were deeply unsatisfactory.

As an example of the professionalism of art thieves, I point out that, at the time of the recent attempted theft at Belton house, if the police vehicle had gone at full speed down a particular lane, the police would almost certainly have sustained fatal casualties. Such are the lengths to which the perpetrators of the planned seizures of treasures go, and there is a huge amount of money in it for them. Are the police serious about counteracting these crimes? This is not an absolute police priority--that would be silly--but can the Minister tell us what is being done about this problem?

What about the artefacts that are coming in from eastern Europe? The hon. Member for South Staffordshire (Sir P. Cormack) used to lead the all-party arts and heritage group. I vividly remember visiting churches in Czechoslovakia, some of which were locked and others from which many artefacts had been stolen for the Amsterdam, Frankfurt or London art markets. The icons from eastern Europe--not least from the former Soviet Union--flooded out from the places in which they belonged. That is a serious matter for anyone who is concerned about the European heritage. Can anything be done about that? That may be easier said than done, but it is a real problem.

9.51 am

Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross): I have little to add to the eloquent plea made by the right hon. Member for Cities of London and Westminster (Mr. Brooke). The debate is timely, because the decisions of the Commission are imminent. The case that the right hon. Gentleman deployed was opened most forcefully last year by the right hon. Member for Wells (Mr. Heathcoat-Amory), who I think will contribute to the debate later. We are grateful to him for focusing on this threat to a major British trading activity.

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Is the Minister aware that these impending measures have already substantially transferred business from this country to the United States and Switzerland in anticipation of the almost inevitable--as it is perceived by the art market--development of the tax regime, especially the ending of the derogation from the sixth directive at the end of June this year, which will increase the VAT on imports from 2.5 to 5 per cent? It is my understanding that that measure can be reversed only if there is a unanimous decision of the Council to that effect, and such a unanimous decision is thought unlikely.

It is important that the arguments against the ending of the derogation--I add my voice to that of the right hon. Member for Cities of London and Westminster in seeking prolongation--are carefully rehearsed, and that the case that may be argued by the Commission is answered point by point. If, as the right hon. Gentleman has suggested, its case is intellectually unsound, it should be answered by a strong rebuttal from Her Majesty's Government.

I am aware of some of the arguments by Directorate-General XV about the impact of the droit de suite proposals, but I have not yet been able to elicit from the Commission the arguments that it is deploying about the impact of value added tax. It is perverse of the Commission to proceed with this proposal in the mistaken belief that it is in the interests of the European Union to have common rates of tax on important works of art when the sole consequence, as the right hon. Gentleman properly explained, will be to damage European trade for the benefit only of those trading outwith the continent.

Mr. Anthony Steen (Totnes): The right hon. Gentleman says that the proposal will damage European trade, but is it not also true that it will damage British trade more than that of any other European country?

Mr. Maclennan: That argument will undoubtedly appeal to Her Majesty's Government.

Mr. Steen: But is it correct?

Mr. Maclennan: I believe that it is correct. However, as we must persuade 14 other Ministers of the virtues of our argument, it may be best to couch it in European terms. I do not disagree with the hon. Gentleman's assessment, however.

Mr. Geoffrey Clifton-Brown (Cotswold): Is not the real kernel of the argument that, although Britain will suffer the most, the European Union will also suffer? The 5,000 jobs that will be lost in Britain will not be redistributed to Europe: they will go to auction houses outside Europe, notably in Switzerland and the United States.

Mr. Maclennan: That is exactly the point; it has already been made, so I do not wish to labour it.

Will the Minister use his influence to prevail on the European Union and the Commission to make their case transparent, for there is still time? If the arguments are to carry any weight--the matter should not be decided merely on the basis of Britain's interests alone--the Commission's view should be published. We have not yet had the conclusions of the inquiry. I understand that the inquiry is being led not by Directorate-General XV,

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which has some responsibility for the art world, but by Directorate-General XXI, which may have less direct understanding of these matters.

The harmonisation of droit de suite is a peculiarly perverse proposal. There is little evidence that droit de suite has been of great benefit to young artists, for whose assistance it was primarily devised, in the countries in which it operates--I am thinking particularly of France and Denmark. Indeed, young artists in this country have little expectation of deriving benefit from the proposal. They have expressed to a number of us the view that the complexities of seeking to raise and police such an operation are not worth the candle. Although it may benefit a handful of our most distinguished artists whose works command a high price in the secondary market, such as Mr. Lucian Freud, it will not give a great leg-up to young artists who are trying to make a living and establish a reputation, and for whom secondary market values are probably low.

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