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10.12 am

Mr. Ian Taylor (Esher and Walton): I support the condemnation by my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) of the Commission's proposals. I do so with some sympathy for the Minister for Competition and Consumer Affairs. I was his predecessor in the previous Government and dealt with these matters. It is appropriate that a Department of Trade and Industry Minister is on the Front Bench, because the issue stems from the whole genus of measures that come under copyright.

I agree with my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley). The industries that are covered by copyright, and for which it is important that intellectual property is protected, are among those that do most to benefit the British economy. They include the music industry--the commercial aspects of which I was also responsible for--publishing and many others. They are at the heart of what we have been proud to achieve in European and world markets. We send an important message to the public in not overlooking the contribution that those industries have made to our commercial as well as cultural life.

When I was upstairs in a Standing Committee at the beginning of 1997, my right hon. Friend the Member for Cities of London and Westminster also made a forceful presentation of the case for the British art market. There is no doubt in these circumstances that the Commission has made a monumental error. I rapidly say that I happen to be one of those Conservatives who is a Europhile, and that the Commission is important for us to carry out our objectives within the single European market. As a general point of principle, without the Commission,

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we would not have made tremendous progress in the European Union in breaking down trade and non-tariff barriers.

Mr. Dalyell: As a fellow Europhile, may I ask the hon. Gentleman a matter of fact? When he was dealing in a ministerial capacity with Commissioner Monti, what did commissioners say in defence of the droit de suite?

Mr. Taylor: Commissioners said a great deal. Commissioner Monti and the Internal Market Council had many discussions on those matters, none of which was convincing. As my right hon. Friend the Member for Cities of London and Westminster has said, their undertakings to come forward with further evidence and documentation did not materialise, certainly not while I was a Minister.

As someone who is not, in principle, against the Commission, I hope that the House will bear with me when I say that the Commission is not always infallible. On this occasion, it has been fallible. It has made a mistake about harmonisation of a sector where the damage will be to the European Union as a whole, and specifically to one member country--the UK.

There seems to be an argument for looking at taxation across the European Union and for saying that there are cases where harmonisation will improve the competitiveness of the European Union, but proposals should not be made to try to create harmonisation if they damage one country and do not benefit others in the European Union itself. That is a more communautaire view than that being expressed by Commissioner Monti.

I want to assist the Minister in the deliberations in which he will be involved in the next few days. Does he know from the legal advice that he is receiving whether the proposal has been made under the right article--100A? I was nervous of attempting to label it a taxation measure because I feared that that may not count in our interest in the long term, but I would nevertheless be interested in what the Minister has to say.

Has the Commission attempted to show that those countries that have not applied the artist resale right have done that because it does not work in favour of those whom they most hope to benefit--the struggling artists--and tends, as has already been said, to apply only to the estates of dead artists who have been extremely successful? Has the Commission examined the way in which the art market will move off shore, either to Geneva or to New York, as it undoubtedly will? It will probably not move to California because it has a levy; there is an internal distortion in the United States market. Nevertheless, that is a matter for the United States, not an argument that the Commission can use. That is why I raise it; I know that the Commission has used it.

Those are serious questions. I am not sure that the Commission has done its homework since the days when I was attempting to put pressure on it. The matter is too important for the art market in the UK, all the jobs that it provides, the prospects for the art world and Britain's role in the world.

I hope that the Minister can give more up-to-date information than was available to me when I left office. I hope that he will use every endeavour to put across that

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we make not an anti-European criticism, but a criticism of the way in which the Commission is applying certain principles. We must stand up against its making that mistake. If it makes it, the Commission will damage its credibility on a much wider basis.

10.18 am

Mr. James Gray (North Wiltshire): It is an honour to follow my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke), whom I congratulate on securing the debate on such an extraordinarily important issue. It is also a great honour to follow so many other distinguished and eloquent right hon. and hon. Friends on the Opposition Benches and hon. Members across the Floor. I am particularly grateful to them for their concise, brief contributions, because that allows less distinguished Back Benchers to get a word in edgeways, which, as Madam Speaker made clear earlier, is the purpose of such debates.

The debate is broader than simply the issue of art. It is about the way in which we tend to talk about many difficult and different political issues. In the world and in the Chamber, we tend increasingly to use single, often meaningless, words to try to encapsulate the things that we are getting at.

For example, the word "modernisation" is uttered in the Chamber more often than any other word. It is, of course, entirely meaningless. All Governments modernise everything. "Equalisation" is another oft repeated word. It seems to be presumed that equalisation is necessarily a good thing, but it may mean making things worse--equalising down. Integration may mean forcing together into one place things which should be different. Harmonisation is perhaps the greatest of those meaningless mantras that Europhile friends tend to use so much. They suggest that harmonisation is necessarily a good thing, but today's topic amply demonstrates that it is not and that the Government should stand up for British, not European interests. We have a strong art market which is the envy of the world and the mantra of harmonisation could lead to its destruction.

Either of the tax proposals before the Commission would damage the art market, but together they could destroy it. In that context, and given that there has been no economic analysis of their effects, it is quite extraordinary that the proposals got off the starting block. They provide a bizarre window into the workings of the European Commission, which produces politically correct, wonderful sounding ideas, for example, that tax harmonisation will help young artists. They all look marvellous on paper, but the costs have not been considered. What progress has the Minister made on asking the Commission to look into precisely what the proposals would mean for the British art market?

Once again, Britain seems to be at the receiving end of the rawest deal from the European Union. We are expected to sit back and say, "This is all fine. Harmonisation is marvellous. It is the European Union at its best. Okay, chaps. Crack on. Qualified majority voting is fine. We'll lie down and take it." Perhaps this should be the issue on which the Government should say, "No. Hang on a minute", as Baroness Thatcher, with her handbag, did so memorably on the subject of the rebate. We ought to take a stand. It may be a small issue, but it may be the one on which the Government should stand up and say, "Enough is enough. We intend to go no further."

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All our European partners--I am not sure that I like the word partners--have so much to gain, but we have so much to lose as the proposals would do down the London art market. Unlike us, they do not care what happens to the international art market because they play just a small part in it. Our art market is unique in Europe and we should stand up for it.

If the Government are looking for a cause to demonstrate their clout in Europe, about which they brag so often, what about this one? Perhaps they should stand up and say, "Okay, Europe. We are going to make you listen and do something about this iniquitous tax." Both proposals are entirely indefensible and would damage an immensely successful and internationally renowned British industry.

Mr. Ian Taylor: My hon. Friend used the word "tax". Is he absolutely certain that it is a tax and involves the Exchequer, or is it a levy? Precision is quite important when the Minister has to raise the matter at the Internal Market Council.

Mr. Gray: My hon. Friend is quite right. I used the word loosely. I was referring to VAT derogation, which is a tax. However, the provision which I tend to refer to as "droit de seigneur", although that that is not quite the right expression, is a levy rather than a tax. I apologise to my hon. Friend, who is quite right.

In the circumstances, the Minister's response in a written answer to my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) was unsatisfactory. He said:

The Minister referred to minimising the damage, not stopping it. He did not say that Britain would not agree to the proposals, but appeared to accept that they would be introduced and was looking for ways to minimise their damage. If the Minister intends to do something to stop the iniquitous proposals from Europe, his answer to my right hon. Friend was weak and he should correct it.

At the Internal Market Council on 25 February, I hope that the Government will make it clear that we shall have none of it and that through our high-level contacts we shall seek enough allies in Europe to stop the proposals. I understand that the Italians may be considering voting with us. Perhaps the well-known hotline between No. 10 Downing street and the Prime Minister of the Italian Republic could be used usefully on this occasion, not to help Mr. Murdoch but to help the London art market.

I call on the Government not just to pay lip service to the marvellous mantras of which they are so beloved, but to help one of our key British industries--the British art market--and to do something on 25 February that will not necessarily help Europe, but will help Britain.

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