Examination of Witnesses (Questions 30-39)
8 MARCH 2005
MR ANTHONY
BROWNE, SIR
TOM LIGHTON,
DR IAIN
ROBERTSON AND
MS JOANNA
CAVE
Chairman: Good morning. Thank you very
much for coming to this inquiry. If I may say so I am particularly
grateful to Dr Robertson, who I understand has come at very short
notice. We very much appreciate that. I will ask Mr Flook to open
the questioning.
Q30 Mr Flook: You may have been as surprised
as I was that when the artists and representatives who are sitting
where you are now were asked about droit de suite they
neither had a view individually nor collectively about it. I know,
Mr Browne, you have been quite a keen critic of it. As far as
I can work out, the costs of implementing it, particularly at
the lower end, seem quite prohibitive. Do you want to comment
on that a bit further?
Mr Browne: Thank you very much,
Mr Flook. Yes, I suppose my views are fairly well-known on the
subject of droit de suite generally. I would have said
that I was not particularly surprised by the reaction earlier
on, because droit de suite, on first examination, does
appear to be a benign, philanthropic and appealing idea, and I
have to say when I first encountered it that is rather how I reacted
to it; but, having studied it and having studied particularly
how it works in countries which already apply the right, it does
seem to me to overwhelmingly benefit the people that it is not
really aimed in the first place to benefit, and I also was not
particularly surprised because we are very aware of the fact that
artists' opinions are very much divided on this issue as well.
Many artists are fundamentally opposed to it for a number of reasons.
I think probably the best place to look to see how it actually
works in practice is Germany, where it has existed for a number
of years and where it is said to be operated in the most efficient
and effective manner. The statistics there demonstrate absolutely
that only a handful of artists gain anything at all. I think in
1998 274 artists gained out of nearly 7,500 artists who were registered
with a collecting agency, but heirs 206 artists shared out seven
times as much as was paid to living artists. I would say that
if the starting point of your inquiry is how best we can help
young artists, and so on, I would suggest that droit de suite
is about the last idea we can come up with because it just does
not do that. In my view it was an idea which was very much at
home in the 1920s when it was first started, but it really fits
ill in the context of the twenty-first century in a different
economic, social and market environment.
Q31 Mr Flook: From a dealer's perspective,
more broadly, how do you and your competitors or colleagues, wish
to describe them? How do they see it as well?
Sir Tom Lighton: What we feel
is that what the artist needs is essentially a vibrant and flourishing
market, both at home and internationally. I think it is well documented
that we feel there is a big risk in this that a substantial portion,
certainly at the higher end of the market, will to move centres
where droit de suite does not exist—America and Switzerland—where
there seems little evidence of them being interested in introducing
it. That may not seem important to the young emerging artists,
but what they need is the exposure to international museum curators,
international dealers, international collectors, who visit London
two or three times a year for major auctions, major art fairs.
If those auctions are greatly diminished, they simply will not
come in such numbers, they will not go up to Hoxton or other parts
of London looking at the young artists visiting their studios.
Any artist, whether they are emerging, very prosperous, whatever,
needs a totally efficient and vibrant market.
Q32 Mr Flook: Taking your logic through,
as they already have it in France, does that mean that international
art buyers go to the Hoxton equivalent of Paris because they do
not go to Paris because they do not have droit de suite?
Sir Tom Lighton: I cannot answer
that precisely because I do not know, but if you look at the percentage
of the art market in Europe that France has, I think it has been
a declining trend over the last two or three decades at the expense
certainly of this country and others.
Q33 Mr Flook: Do you expect the system—a
question also directed as much to Ms Cave—to be up and running
on the basis, as far as I can see it, for those who are living
artists this will come into place from 1 January 2006 and the
Government have yet to put out a consultation document. Could
you respond quickly from your perspective when it is out? It has
just come out. It is amazing what influence this Committee has
on the Government! Do you think that you will be able to respond
to that document which you may or may not have seen?
Ms Cave: We have seen it and,
yes, absolutely we will be making a response. Can I come back
to the question you asked about costs? The costs of collecting
this royalty are not prohibitive. All 11 Member States where the
right exists at the moment, in those Member States where it is
collected it is collected without exception on the compulsory
collective model on a not for profit basis. I have to slightly
contradict my good friend Mr Browne, on my right here, because
the example he gave in Germany is not quite right. Last year (2004)
there were 9,500 sales that attracted the royalty, and the amounts
that were collected ranged from a few euros to several thousand.
The threshold for qualifying resales in Germany is currently 50
euros. If I may comment on the question you asked about France,
the right has existed in France since 1921, in Germany since 1960.
Neither of those markets has been adversely affected by its existence
at all.
Mr Browne: May I come back on
that, because that will not do. There was report to the Assemblée
Nationale by a member of, Deputé Douyère which categorically
stated that droit de suite was responsible for the fact
that France did not have a large enough market share. Indeed,
the French Government commissioned Arthur Andersen to conduct
a study which came to precisely the same conclusion. As far as
my statistics on Germany are concerned, perhaps it was parliamentary
privilege, but they were given out in the Bundestag by the CDU
culture minister. I would hope they are fairly reliable.
Q34 Mr Flook: And admittedly they did
relate to 1998?
Mr Browne: There may have been
a huge leap or maybe there were reforms made to make sure that
more people benefited.
Q35 Alan Keen: Tell me, presumably you
did not get to be a knight of the realm for not showing invoices
to artists?
Sir Tom Lighton: I am afraid I
did nothing to deserve being Sir Tom.
Q36 Alan Keen: Can you tell me a bit
about galleries that do not show. Is the practice widespread?
How does it occur? Is it that artists are so desperate that they
will accept any practice if the gallery will help them?
Sir Tom Lighton: No. I think there
is a fundamental myth that there is an artist on one side of the
fence and a dealer on the other side, which is truthfully not
the case. To work successfully in a relationship they have to
be aiming for the same goals, which is successful and progressive
development of the artist's career. We have many artists in the
particular firm I work for that we have represented for 30 years
or more. Some of them have very detailed written contracts which
are quite regularly updated if they have points they want to incorporate
or we have points we want to incorporate. We have very clear sort
of commission structures, the division of the percentage. I have
listened to what Rebecca Salter said and obviously I sympathise
with some of her comments, but I do not think it is widespread,
from my experience anyway. As regards this issue of showing the
invoices to the artist, there are obvious reasons that you would
not show the sales invoice for client confidentiality—it
has the name and address of the client—but I think there
is much greater transparency. We give our artists a great deal
of information. They know within the hour if a work has been sold.
They get regular accounts. I think it is also important to remember
that the artists are not employees of the gallery. You mentioned
the football analogy, but they are free. All the artists that
we deal with are free to ring us today or tomorrow and say, "Actually
we have decided after 30 years we would like to move to another
gallery." They are free to do that and I think it is a healthy
thing that they are. It would be very sad for us if they did,
but they do not all want to be committed to long-term contracts,
they do not want to work exclusively with one gallery even, they
like a certain degree of flexibility, but I am totally in favour
of as much as possible being put in writing. Certainly that is
the practice we follow.
Q37 Alan Keen: I am a great fan of my
fellow Teesider Mackenzie Thorpe. I can do the same paintings
as he does, but why am I not as famous or presumably as well off
as Mackenzie? It is a serious question. How do artists get recognised
and flourish in the way that someone like Mackenzie Thorpe has
done, because it will help us understand the market?
Sir Tom Lighton: I would slightly
go back to your football analogy. When artists are at art school
a lot of the dealers will go round and visit the degree shows,
visit studios, and so on. Very often the artists are signed up
by some of the smaller emerging galleries, and, when they have
had a couple of successful shows, or, if you like, scored a few
goals, obviously some of the bigger galleries, like in football
the bigger clubs, tend to sit up and take notice. Obviously it
is great for us if we can see the next Wayne Rooney when he is
still at art college, but we get a lot of applications directly
from artists—we probably ourselves get about five to 10
a week, I would think—and most of the galleries receive
a huge number. I think there are other ways that emerging artists
could be helped, and they are not all necessarily young. A lot
of major artists have not really emerged until their 40s and 50s.
To pick up on one point that was mentioned earlier, I think any
form of subsidy for exhibiting these artists' work at overseas
fairs that the Government was able to offer would be a major asset.
It is very expensive, and particularly for the younger galleries
it is a very substantial cost. It is extremely important for these
artists to try and get exposure internationally. Any form of help
that could be given there collectively to support a group of young
dealers exhibiting in an art fair in Chicago or in Basle would
be wonderful. There are lots of positive measures, I think.
Q38 Alan Keen: What would you like us
to put in the report to help?
Dr Robertson: We are dealing here
with a market which is completely unregulated, and that actually
is quite a good thing. It is probably one of the last markets
in which you can find opportunities to make extraordinary profits
which are then fed back into the system. To some extent, if you
overload it with too much regulation—the French example
being a very good one—the market declines dramatically.
The French market is now down to 9% of the total global art market,
from some 25% 30 years ago. Britain has a 25% share of the global
art market, second only to New York and the American market. That
is something which is extremely delicately balanced at the moment.
If we lose some of our competitive advantage the market could
just go overnight. I know this is something Anthony Browne believes
and I certainly believe very strongly that there are so many options
for dealers and galleries to move if the climate changes dramatically
that we could be left with talking over the crumbs if we are not
careful. The artists' community which we so cherish in Hoxton
and elsewhere is only really the cream on top of the cake. If
we do not keep the main industry in London and the UK generally
then I think we are in danger of losing an enormous income earner
and revenue earner for the UK. A certain amount of regulation
is fine—but countries like Belgium and France have actually
lost their market through over-assiduous application of certain
laws and regulations. The only reason France is now picking up
is because it has managed to smash the Commission Reserve Monopoly
so Sotheby's and Christie's can now trade there. The French market
is actually showing signs of returning to its former strength.
That is my view.
Ms Cave: On the question of artists'
ability to flourish, obviously a lot of artists depend upon their
ability to sell originals or obtain commissions, and dealers play
a very important part in that which we would certainly acknowledge.
The other point I would like to make is that income artists can
derive from their intellectual property rights, copyrights and,
in this particular case, the resale right are incredibly important
and (however modest those incomes are) do help them to survive
in between exhibitions or during periods when they are going through
an unfashionable or less productive stage in their careers. I
would like to draw your attention to the significance of rights
and income they provide for artists as another way that helps
them to flourish.
Mr Browne: I did want to make
one point about the market diversion. Picking up on what Dr Robertson
was saying, one of the characteristics about the market in London
and the UK is its international outreach. In other words it is
an entrepot market for sellers throughout the world—things
come in here, they are sold and they go out again—and that
is why the transaction cost and a level playing field internationally,
are so incredibly important. I did an off-the-cuff analysis of
some very major auctions last month in the contemporary art field
and I looked at the Christies' auction (and the non-EU imports
are symbolised because of the VAT situation) and 50% of what was
sold came in from outside the European Union; so that is crucial
and that is very immediately at risk if you impose a charge here
which is absent in New York, because these things are starting
out in Japan and it does not really make any difference to the
seller where it goes.
Q39 Derek Wyatt: Can I ask you about
the resale rights. Would you assume that your organisation would
run the scheme? Is that an unreasonable assumption?
Ms Cave: We already represent
52,000 artists who signed up for us to collect the resale right
for them in the event that it is introduced into this country;
so we feel we represent a significant number of artists; added
to which, we are the only copyright and collecting society that
works on a not-for-profit basis in the UK. Yes, we would see ourselves
as playing a significant part. Obviously if in the future other
such societies were to establish themselves, there would be nothing
to prevent them also participating, but at the moment there is
only us.
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