Examination of Witnesses (Questions 200
- 219)
TUESDAY 9 JANUARY 2007
MR MARTIN
LEVY, MR
JONATHAN SCOTT,
MR GERRY
MCQUILLAN
MBE, SIR NICHOLAS
GOODISON, MR
HUGH STEVENSON
AND MR
WILLIAM MASSEY
QC
Q200 Mr Evans: Is the problem more
at the very top end where the acquisition would cost perhaps in
excess of £1 million?
Sir Nicholas Goodison: Yes. I
did say in my Review that there was nothing that I could recommend
that would deal with the problem of a super-expensive object.
I must make it clear that I am not only talking about works of
art, I am talking about objects across the whole board of cultural
activity, but the really expensive ones do tend to be works of
art. There was nothing I could recommend which would solve them
other than Exchequer grants which I was warned off anyway and
it was not part of my brief I must observe that it was Exchequer
grants in Scotland that saved two great pictures which were integral
to Scottish collections: but the Treasury have taken the view
that the National Heritage Memorial Fund has taken the place of
Exchequer grants which it patently has not, but that is their
view. There was no other recommendation I could make and, therefore,
I recommended increasing the National Heritage Memorial Fund to
at least £20 million a year and I do stress the term "at
least": and of course it is going up to £10 million
in 2008 which, in my view, is nothing like enough. However, lower
down the scale from the very large acquisitions there is a host
of potential acquisitions which fall in the area of £5,000
up to £500,000 where you could still prove that works are
of pre-eminent importance, and that, I think, is where a big problem
that I was trying to tackle lies.
Q201 Mr Evans: Is the real issue
here though that museums and galleries in the United States, for
instance, to take one example, have access to such greater amounts
of money than we have that almost there is a culture of giving
up, that we cannot compete with them, so why bother?
Sir Nicholas Goodison: The United
States is a great deal richer, for a start. It is the leading
economy of the world, as Britain was in the 19th Century and the
18th Century You cannot do anything about that difference. The
fact is they are richer The fact is their museums, therefore,
are better endowed and of course they have great tax benefits
in the acquisition of works of art and culture in the States which
we do not have here. The thrust of my proposals on tax were, as
I said earlier, partly to persuade people to retain and partly
to persuade them to sell to museums if they do not want to retain,
but, above all, to give that 60% of their own money towards acquisitions,
at least 60%, and that was the thrust of my proposals. My belief,
and it was based on discussions with museum directors, potential
donors and others, is that it would make a difference.
Q202 Mr Evans: Do you accept as well
for the regional museums and galleries that they have a real problem,
and you have sort of intimated it, about using council tax money
to buy perhaps a work of art which may cost a lot of money, that
there would not be proper support for that, particularly at a
time when people are not getting their rubbish collected more
than once every two weeks and people would say the money should
be going there as opposed to buying fancy works of art?
Sir Nicholas Goodison: Well, I
think the enlightened council will back a good acquisition. You
have only got to go and look at an exhibition of a new acquisition
in a regional museum to see the excitement that it can generate:
and the well-chosen acquisition enormously enhances the educational
possibilities, the local pride in the collections and so on So
I think the willingness is there, but the funds are not there,
and most criticisms of the system are to do with the lack of funds.
I would add a postscript to that, and it is a very important one,
that museums must not sit on their backsides, they have got to
get out and cultivate potential donors. Nothing in my proposals
would work if the museums do not cultivate their potential friends.
Q203 Mr Evans: Do you think they
are being lazy then at the moment?
Sir Nicholas Goodison: I think
if you are in a local authority network, it is quite difficult
to cultivate potential donors. Some of them do it very well, others
became very dispirited quite a long time ago and worry of course
that, if they get private money, the public money will be chopped.
That of course is one reason why I recommended strongly that museums
should consider setting themselves up as trusts Local authorities
should back that because I think donors are much more likely to
give to charitable trusts than they are to local authorities.
Q204 Chairman: Can you give us an
estimate of how much your fiscal proposals would cost the Treasury?
Sir Nicholas Goodison: No. I was
asked that at the very first press conference and I said I really
could not give an answer to that, just as they could not assess
the results of the gifts of shares and land when they brought
that in. It is an exact parallel, that there is no evidence on
which to make an estimate, so I plucked the figure out of the
air that I thought it was quite likely to be of the order of £20-30
million, but I do stress that is a guess.
Q205 Chairman: But you said earlier
that you thought one of the reasons the Treasury were not attracted
to your proposals was because they felt that the existing concessions
were not being taken up as much as they could be, so that would
suggest it is not necessarily a matter of cost which determines
it.
Sir Nicholas Goodison: I do not
know, as I said earlier, what underlies that feeling. It was Lord
Evans who made the statement in the Lords and it appears to be
based on some work done in the Treasury which I have not had access
to.
Q206 Mr Sanders: Is there more work
to be done along the lines of your review to simplify, integrate
and promote the existing fiscal provisions that support museum
acquisitions and, if so, where should the responsibility for this
lie? You recommended to the Department that responsibility was
transferred from DCMS to the MLA for the export control and acceptance
in lieu programmes.
Sir Nicholas Goodison: I regret
to say I did not hear part of that question.
Q207 Mr Sanders: I think you had
answered part of it in earlier questioning, but is there more
work to be done along the lines of your recommendations to simplify,
integrate and then promote—
Sir Nicholas Goodison: The answer
is yes. The DCMS have transferred the functional parts of the
export review which I greatly welcome. They have held back the
right to approve in situ agreements under acceptance in
lieu and the right to approve export permissions. I regret that.
They have their reasons, but my proposal was that they should
delegate all those functions to a strengthened MLA. Nothing whatever
has come from the Inland Revenue- because my proposal was also
that those functions carried out by the Capital Taxes Office should
also be transferred But nothing has happened there, so it is a
disappointment to me that the proposal to build up within the
MLA an authoritative and consistent body which could give advice
and guidance and handle all the aspects, both of owners and museums,
has not yet been realised There is more work to be done.
Mr McQuillan: If I might add something
from the MLA's point of view, the unit which I head, the Acquisitions,
Export and Loan Unit, does provide advice to anyone who comes,
whether they be private owner or a museum, on the tax incentives
which operate in relation to acquisitions in the UK. We provide
a tailored service for each acquisition and in the last year,
2006, we had 40 such cases where museums or private owners came
to us and asked for advice and guidance, and that is considerably
up on 2005 when there were only 26 such cases, but there has been
some progress on this matter.
Sir Nicholas Goodison: I would
not want you to think I am criticising the present work of the
MLA. I think Gerry McQuillan in particular does a superb job and
it is my aim of course to build on that excellence.
Q208 Chairman: Just before we move
on from the question of Review, can I ask the Review Group, you
have set yourselves up to refine the proposals and then go on
and make recommendations, so given that you are getting no response
whatsoever, do you see any point in continuing to operate?
Mr Stevenson: May I say that is
something obviously we will discuss among ourselves. It is quite
dispiriting because a great deal of work has gone in, as you will
have seen from the paper, into putting some real flesh on the
bones of the Goodison proposals and it is clearly dispiriting
to get no response to it.
Sir Nicholas Goodison: But you
have to go on!
Mr Massey: I think since we started
we have had, I forget, it is either five or six committee meetings
to discuss the recommendations and in every one of those committee
meetings an item on the agenda has been the future of the group
and certainly on the last agenda, the future of the group was
very much something on everybody's minds. Obviously if one is
beavering away, but getting nowhere, that is a disincentive. After
all, none of us is paid to do this, it is benevolent work and
there is obviously a disincentive, if one is getting nowhere,
to stop, so time will tell and obviously results will tell, but
there is a limit obviously.
Mr Stevenson: But there is a great
deal of expertise and legal expertise within the group and practitioner
expertise and we love to see it being used.
Q209 Chairman: But even if the Treasury
are not listening to you, presumably others are?
Mr Massey: Well, our submissions
have been to the Treasury so far and to this Committee. That is
where the submissions have been.
Q210 Chairman: Sir Nicholas, what
do you expect to happen following your telephone call yesterday?
Sir Nicholas Goodison: I expect
to be called to the Treasury to have a very interesting discussion,
which I look forward to.
Q211 Chairman: Do you know who you
will be seeing?
Sir Nicholas Goodison: No, but
I imagine it will be a group of people who advise the Chancellor,
or I hope it will be.
Q212 Chairman: But not a minister?
Sir Nicholas Goodison: I very
much welcome the thought that they put to me yesterday, that it
would be in the broader context of philanthropy because I think
it should be seen in that context. My major tax proposals were
really to encourage people to give. There are a lot of rich people
around today and we need to encourage more giving.
Q213 Chairman: But have you asked
to see a minister?
Sir Nicholas Goodison: The invitation
was there right from the start. I have not pressed it.
Q214 Helen Southworth: If we are
looking at potential abuses of the systems, one possible abuse
which has been reported recently in The Guardian is that
a vendor applying for the licence may provide for the Reviewing
Committee a valuation or a fictitious sale at a price which far
exceeds the amount the object could fetch at a foreign sale with
the result that it could escalate the price for the UK. What processes
can you put in place to make sure that we are not actually sort
of affecting the market and actually undermining the whole system
by supporting acquisitions?
Mr Levy: When an application for
an export licence is made, there is a very detailed form which
has to be filled in in which as many questions as can reasonably
be asked are put and those, amongst many other topics, will involve
the destination of the object for which the licence has been applied,
the price at which the licence is being applied and what that
price represents. Now, when there is a situation where there is
a sale documented between the vendor and the buyer, there really
is no difficulty at all; it is clear cut and we accept it. There
have been occasions where we have had a certified letter from
an attorney overseas confirming the nature of the contract and
on that basis there is no problem. Where the questions arise which
you are alluding to is if something is going out speculatively
to be sold at auction or if something is being exported by an
owner to him or herself abroad, those who have residences here
and abroad. In those instances, we have the opportunity of consulting
the committee during the proceedings, the independent assessors,
for example, and sometimes people on the committee have expert
knowledge within a field as to whether the value is one which
is acceptable within the broad bounds of what is known about the
market. If we are satisfied that that value is reasonable, then
we accept it. If, on the other hand, there is considerable doubt
about that, we are in a position to call for independent valuations
which we do do, so we are mindful of this problem and, I would
say, ever more tightening up on this process and not letting things
go just because.
Q215 Helen Southworth: How frequently
would you say it is in terms of items which are difficult to value?
Mr Levy: Not that often really
because more often than not there is a sale from party A to party
B with a contract, so it is not that often. There have been instances
and there have been instances recently where things have gone
out to be sold without there being a contract.
Q216 Helen Southworth: Is that a
changing process?
Mr Levy: No, it has always been
the process that people can apply for a permanent licence for
something to be sold. As I say, I think the committee is very
concerned that things do not go out at the wrong price and, therefore,
the public purse is being asked to raise money at a figure which
is not justifiable.
Mr Scott: If I may add to that,
I was Chairman of the Export Committee between 1985 and 1995 and
it was a very rare problem 10 years ago or during that ten-year
period, but I think it is one that has increased in more recent
years.
Q217 Helen Southworth: In terms of
export to public institutions overseas, we have already touched
on the fact that there are nations which have far greater purses
than the UK. Is there an issue around there being less effort
made to save works for the UK if they are going to a public institution
overseas and are there any possibilities of discussions and negotiations
with institutions elsewhere so that we can identify items which
are specifically important for the UK and not have a sort of escalation
of prices?
Mr Levy: Well, I think one has
to understand the Waverley criteria as the background to this
and the Waverley criteria offer an opportunity, the last opportunity,
to retain something in this country which is considered of particular
significance under the three criteria. I think one has to understand
also that, of the something like, I think last year, 30,000 objects
for which licences were applied, something like 25 items were
eventually referred to the committee, so it is a very, very small
number of pieces. The committee then considers these against the
background of the Waverley criteria and there is no responsibility
on us, or reason for us, to consider where they are going, but
simply whether the pieces are of sufficient significance that
they ought to be kept in the country. The question asked about,
"If something is going to go to the Metropolitan in New York,
how tragic is that?", the thing is that we have no control
over it and, first of all, we are not in a position to make that
judgment at this stage, but once the thing has left the country,
we have no jurisdiction over what happens to it. For example,
we can say yes, the Metropolitan is a very worthy place and the
object is free to go, but the Metropolitan can go through some
financial crisis or change of taste and decide to go for deaccession,
in which case this great object, which might have been retained
over there, disappears into the ether. Then I think there is a
further problem with this, that many American museums actually
use benefactors to make acquisitions for them, so might not that
same use in the Metropolitan, just to take an example, say, "Mrs
X or Mr Y is going to buy this individually and promise it to
us as a gift", and why is that any different? We are on a
very slippery slope with that.
Q218 Helen Southworth: Is that an
issue which is changing currently or is this a static position?
Is it the same as it was 15 years ago?
Mr Levy: So far as attitudes are
concerned over here?
Q219 Helen Southworth: No, in terms
of volumes.
Mr Levy: I think the number of
cases fluctuates on a year-by-year basis, but probably no more
than about 40 at the most and not much less than 20, so it is
the same number of cases every year. Our prices go up, but not
the number of cases.
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