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8 July 2008 : Column 350WH—continued
9.54 am
Mr. Hugo Swire (East Devon) (Con): I am conscious that many of the arguments have been rehearsed before, and many hon. Members want to contribute to this debate, so I shall keep my comments brief. I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing this timely debate, and I hope that the Minister will reflect on various points.
First, it is too soon to say whether droit de suite has had an adverse effect, or otherwise, on the UK art market. The UK art market has been thriving. The Minister will have seen the report in The Timesthis morning on the huge prices paid by international collectors for impressionist and post-impressionist works. That, I think, has artificially maintained London as a centre of the art world in the current uncertain economic climate. The key point relates to international collectors. We are not talking about the small consigner or small purchaser. What really drives the auction houses and dealers—their engine room—is the big, expensive items, which are being collected by a new group of international collectors, who are united by one thing: their mobility. They may have properties here and elsewhere, and they move around the world. Consigners recognise that.
It is less a matter of the single consignment that might attract droit de suite than of the fact that in an estate with a multiple consignment, the impact of droit de suite on several paintings might seriously affect where the executors choose to consign those works of art. We are playing with fire if we choose not to extend our opt-out in this matter at a time when the United States and Switzerland—both vibrant centres of the art market—are not prepared to join in. I would have a rather different view of droit de suite if I knew that, rather like the buyer’s premium, it was a universal levy. However, until it is, it would be foolhardy not to extend our opt-out.
This is not a question of fat-cat auctioneers, of which I was one—or rather I was a thin-cat auctioneer, associated for many years with Sotheby’s, although I have not been for six or seven years now. When we talk about the art market, we should recognise that we are talking about dealers, the hotels that put up people who come to the great auctions, and—this will be of interest to the shadow Arts Minister, my hon. Friend the Member for Wantage (Mr. Vaizey)—museums and galleries, and exhibitions, all of which piggy-back on London’s identity as an art centre. One only has to talk to the Mayor of London to realise that he wants London to remain pre-eminent as an art centre. That is not something that just happened, or will just continue. Other world centres would love to take on the role, not least Paris, as has been said. It is interesting that President Sarkozy, who is keen to re-establish Paris as a centre of the art market, is apparently having second thoughts. We can all subscribe to the romantic idea of “La Bohème” and the starving artist in the garret, but the reality is somewhat different.
Mr. Heathcoat-Amory: It is sometimes said that Christie’s and Sotheby’s are behind what is happening, and that allegation was certainly made when the matter was originally debated, but they own companies and have auction houses in New York, so in a way they will be the last to lose. It will be the small people such as packers, porters, framers and insurers—in other words, the workers—who cannot move, who will lose when jobs go from the London and European art markets.
Mr. Swire: Indeed that is true. My right hon. Friend has been a champion of the art world in that respect for many years—he has form.
To quote some more statistics, in the first 18 months of the measure’s operation in the second largest art market in the world, only 1,104 artists benefited, of whom only 568 were British. The top 20 artists received 40 per cent. of the total collected, and the top 10 per cent. shared out 80 per cent. The idea that the money has filtered down and is saving artists from penury is far from the truth. The signatories to a letter in The Daily Telegraph last week suggesting that the artists’ resale right should be imposed immediately, for ever and a day, were headed by the excellent artist Damien Hirst. He is not exactly a starving artist by anyone’s reckoning. It is interesting that some other leading artists, such as David Hockney—I am not sure about Lucian Freud—are on record as being against droit de suite. There is by no means universal demand from the artistic community.
Who benefits from droit de suite? DACS clearly benefits. It has been driving hard to promote it; of course, that is what DACS is in the business of doing. I do not believe that the evidence suggests that droit de suite makes a material difference to struggling artists in this country. What makes a material difference to artists in this country, struggling or otherwise, is that London is still the centre of the art world, and that people from around the world come to the UK because of that. That has a huge knock-on effect, and it is incredibly important that that position be maintained.
Mr. Don Foster (Bath) (LD): Will the hon. Gentleman give way?
Mr. Swire: I am just concluding. We would be doing artists of every sort, as well as dealers, collectors and small auction houses, a huge disservice if we did not continue the opt-out, particularly at a time when the United States and Switzerland are not playing ball.
10 am
Derek Wyatt (Sittingbourne and Sheppey) (Lab): I congratulate my dear Friend the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing this debate, even though, for the first time in 11 years, we are on opposing sides. Like my hon. Friends the Members for Aberdeen, North (Mr. Doran) and for Rhondda (Chris Bryant), I served on the Select Committee in 2005, and I think that it was our Committee that changed the view on the issue.
I have heard Members say, “We mustn’t do this,” or “We mustn’t do that,” using exactly the same argument rehearsed in 2005. We were told that the measure would devastate the market. It has not. We are talking not about a major overhaul—it involves just under 2 per cent. of turnover—but about the rights of individual artists. That is something that the Labour party should be proud of. They are the people that we represent and should represent. I disagree, for the first time, with my hon. Friend the Member for Stoke-on-Trent, Central.
The Design and Artists Copyright Society’s management of resale rights has been a great success. DACS has collected £5.2 million in royalties since February 2006, on behalf of just over 1,500 artists. Those royalties have reached a wide range of people, including the artists
whom the measure was intended to benefit: young artists and those on low incomes.
We are told that the UK art market has been in a terrible position. In 2004, the value of the market was £4.2 billion, but resale rights have had such a devastating impact that the value is now £8.5 billion. Perhaps we need another two years to check, but to say, “My goodness me, it’s really dangerous to do this” is absolute nonsense. That growth is not just due to one or two large buyers, either; it is because London is the centre of the marketplace and always will be. That has been proved categorically. I simply do not see a danger that less than 2 per cent. of the market will alter or change habits; I do not follow that argument.
Mr. Heathcoat-Amory: The hon. Gentleman is displaying a bit of financial optimism. The world art market has enjoyed a comparative boom in the past decade, but that may come to an end. Also, the London art market might have done even better in the good years. Should we not prepare the ground for a further shift of economic power and buying ability to other countries, instead of putting further fiscal disincentives before foreign people who might want to continue coming here to buy and sell art? It is no good looking at the past; he must look ahead, rather than simply saying that, because the change was not too disastrous, everything must be all right for the future.
Derek Wyatt: What I find when I travel around the world—whether to an Organisation of Petroleum Exporting Countries summit, a G8 summit or other summits—is that the people who support France, Germany and America are British solicitors and British accountants. The whole service industry supports the whole world, and the art market is one part of that. I disagree; the measure will enhance the market.
Since the law was implemented, resale royalties equate to less than 1 per cent. of the current value of the UK art market. The cap on the maximum royalty payable for each work sold ensures that the royalties do not adversely affect the behaviour of sellers and buyers. The royalties change, so that those at the top get less and those at the bottom get more. That is redistribution, which is something that the Labour party should be proud of.
Some 87 per cent. of art market professionals say that the resale right has not damaged their business. I shall cite more of the report in a minute. The implementation of the UK regulations and the management of the resale right in the UK have been held up as a model of excellence by other countries around the world. The European directive obliges the UK Government to complete the implementation of the right for artists’ heirs and beneficiaries. There is simply no evidence to suggest that buyer behaviour has been adversely affected by the introduction of the resale right during the transition period, and no evidence yet to suggest that it would be adversely affected by the implementation of stage 2 of the directive.
In work commissioned by DACS, Maven Research spoke to 335 art market professionals and 151 artists. I understand that the Antiques Trade Gazette report “The Impact of Artist Resale Rights on the Art Market in the United Kingdom”, which was supported by the British Art Market Federation, only surveyed 35 art market
professionals. That is astonishing. DACS surveyed 335 art market professionals and 151 artists. What did it find? I have said that about 87 per cent. of art market professionals felt that the measure had not damaged their business. More than 60 per cent. of them said that resale rights take them less than five minutes and cost them less than £10 a quarter in administration, and 76 per cent. of them said that the purchase of artworks was unaffected by the new law. Some 39 per cent. of art market professionals feel that the impact of artists’ resale rights has been positive; 95 per cent. of artists are in favour of them, and 90 per cent feel that the law should be extended to the beneficiaries of deceased artists. Some 80 per cent of the artists who receive resale royalties are British. The report’s findings are broadly in line with the view of the UK Intellectual Property Office.
Mr. Don Foster: The hon. Gentleman rightly draws our attention to an important report. However, he has missed one important figure from it: 11 per cent. of the artists surveyed said that the implementation of the scheme has encouraged them to do more work.
Derek Wyatt: Indeed. Well spotted.
I hope that my hon. Friendwill understand that it is important to support young artists. The measure is a way to help them grow into different artists, and who knows where that will lead? I hope that we can persuade the Minister that 2010 is enough and that we do not need to change the date to 2012.
10.7 am
Chris Bryant (Rhondda) (Lab): I have, on occasion, disagreed with my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher), but I have never disagreed with him quite as strongly as I do today. What I find most depressing about the contributions to the debate—not those of the two colleagues who served with me on the Select Committee on Culture, Media and Sport when we did our report on the art market, but those of other Members—is that the arguments are precisely those that we heard before.
I remember Anthony Browne, the chairman of the British Art Market Federation, telling the Select Committee that Cork street was going to die. He said in the Financial Times:
“In effect we’re going to hand a large part of the London market to New York on a plate. This is the single biggest threat to the competitiveness of the UK’s international art market.”
The Antiques Trade Gazette wrote:
“The introduction of Droit de Suite in the UK could result in the loss of up to ten art dealing jobs for every artist who would benefit from the tax.”
So far, 1,500 artists have benefited, so 150,000 people working in the art market have apparently gone—completely and utterly disappeared—in the past two years.
Chris Bryant:
My hon. Friend may think that that argument is silly, but my point is that those who campaigned against the introduction of any artists’ resale right in
this country said that, for every artist who gained, 10 people would lose their jobs in the British art market.
The hon. Gentleman opposite, whose constituency I cannot remember—the hon. Member for Sotheby’s. [Hon. Members: “Withdraw.”] I do not mean that in any derogatory way; that is merely how I often think of the hon. Member for East Devon (Mr. Swire), because of his previous job. He knows a great deal about the British art market, but I was intrigued by the fact that he said that the British art market consists not just of auction houses but of museums, galleries, hotels and all the people who work in the industry. The only people that he left out were the artists, whom he did not mention at all as part of the British art market, yet one of the reasons why the British art market and the auction houses and galleries in London are doing phenomenally well is that Britain has an extremely vibrant group of artists at the moment. France’s art market is finding it very difficult to take off—or to regain the position that it once had—partly because it lacks that artistic vibrancy.
As several hon. Members have mentioned, since the introduction of artists’ resale rights, there has not been a collapse of the British art market, but, if anything, a resurgence. I do not attribute that directly to the introduction of artists’ resale rights, as my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) was half suggesting, but it cannot be argued, as it was three years ago, that the British art market will suddenly become less competitive as a result and lose out to other markets around the world. Indeed, as we have seen, the market has grown from £4.2 billion to £8.5 billion.
Another argument used three years ago was that it would be impossible to administer the rights and almost impossible to find all the artists and to ensure that money was taken from those buying the paintings and so on. In fact, out of the 1,500 artists who have benefited, there have been difficulties probably on two or three occasions—absolutely minimal difficulty. In fact, the administration has gone more smoothly certainly than that of many other parts of government, such as working tax credits or—
Mr. Edward Vaizey (Wantage) (Con): The Child Support Agency.
Chris Bryant: Indeed. There is perhaps an argument for asking DACS to run parts of the Treasury.
There is a serious point: those who campaigned against artists’ resale rights, arguing that it would be impossible to administer, must face the fact that it has been introduced remarkably smoothly. As my hon. Friend said, 60 per cent. of art market professionals say that it takes merely five minutes to do the paperwork for each transaction and that, per quarter, the administration costs them about £10.
The hon. Member for East Devon said that one of the problems is that those who receive the money are those who least need it, and my hon. Friend the Member for Stoke-on-Trent, Central referred to public lending rights. I must confess that I have published a few books that are available in libraries, but I gain nothing from the public lending rights.
Mr. Swire: Because nobody borrows them!
Chris Bryant: Quite probably. And neither are they available in any good bookshop.
From the inception of public lending rights, they extended to all writers who wanted to participate—one has to register to receive any money. As my hon. Friend the Member for Sittingbourne and Sheppey said, a large number of artists have benefited from resale rights—some 1,500 so far, and I am sure that there will be more—and significantly more will benefit if we stop the derogation and extend the rights to the estates of deceased artists. Only 2 per cent. of artists who have received money under the rights received more than £50,000, so those who suggest that it benefits only the Damien Hirsts and the Antony Gormleys of this world are wrong. I accept that the list of those who wrote to TheDaily Telegraph was headed by some very famous names, but it included some 587 names, the vast majority of whom most ordinary people in Britain would not have heard of.
The artists’ resale right works so effectively not only because it is a progressive tax—the larger, more valuable articles do not attract the same percentage—but because there is a cap of just €12,000. Some have argued, including three years ago—the hon. Member for East Devon repeated the argument today—that people might say, for example, “If you extend the right to deceased artists, those selling Bacon paintings will take them to the USA.” I do not think that, if one is selling a work for 5 million, 10 million, 15 million or 20 million dollars or pounds, the €12,000 will make a significant difference. What does make a difference is where one believes that the best market is for an artist. For example, it is pretty unlikely that Lucien Freud works will go to the USA for sale, but many Francis Bacon paintings are already going there.
Mr. Swire: I believe that Lucien Freud’s works are going there, too. The point that I tried to make was not about individual paintings, but multiple consignments. With a multiple consignment, auction houses, for example, will already be considering what seller’s premium could be secured. They will factor in all those things, and I submit that, if someone has 20 or 30 paintings, all of which might attract the €12,000 charge, they will consider where best to sell them.
Chris Bryant: I am not so sure, although, obviously, the hon. Gentleman has a great deal more experience than I do in auction houses and the consigning of art works. However, I would have thought that someone thinking of consigning 20 or 30 artworks by the same artist at the same time—
Mr. Swire: Not the same artist.
Chris Bryant: Sorry, the hon. Gentleman is grumbling from his seat.
Mr. Swire: I was talking not necessarily about 20 or 30 Bacons, but about multiple consignments, which could consist of 20 or 30 works by different artists.
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