In which case, we return to the argument about how an individual chooses to sell works. I thought that the hon. Gentleman was referring to the consignment of lots of works coming from the estate of a recently deceased artist. In that case, it is very unlikely that an
individual will say, Yes, it is a good idea to sell 20 paintings by the same artist at the same time, because that might dramatically affect the value of each painting and might not produce the best result for the individual.
In the end, the Government must face not only the rights and wrongs of artists resale rights, but what should happen with works by deceased artists. As Members have said, the Government have a derogation until 2010, and if they want to, they must prove to the Commission that there is good reason for extending it until 2012. I will suggest two main reasons why I think that there is no good reason to do so: first, families are often the vital guardians of the an artists artistic heritage. An interesting case is that of the artist William Scott, who sadly suffered from Alzheimers for the last eight years of his life. His family passed on to me an interesting story through the William Scott Foundation. In 1950, he created a painting that sold at the time to a collector for £60, of which William Scott received £30the dealer took the other half. Out of William Scotts £30, he had to pay £14 for the frame. So he received all of £16 for that artwork in 1950. Last month, that painting sold at auction for £1.1 million. William Scott is deceased, so the family do not receive anything. Some might think, Thats fair enough. He sold it. End of story!
Actually, however, after William Scotts death, his family founded the William Scott Foundation, which provides a catalogue résumé of all his oil paintings, which was not likely to have been done commercially. They have also maintained an archive and, as often happens with many families, provide advice on whether works are fakes. Again, such services are nearly always provided free by families. As I said, they are providing a full authentication service for William Scott works to galleries and auction houses. They also assist students with theses and art history projects, deal with all the copyright and reproduction rights and have already established that 27 works are fake. And what do they do with all the money coming into the foundation? Every single penny goes towards Alzheimers research.
Those who think that, by extending the right to the families of deceased artists, we will simply help the fabulously wealthy children of successful artists could not be further from the truth. I have one other example from Wales. Incidentally, £23,000 has been paid out to Welsh artists since the rights began. I am sure that many hon. Members will know of Sir Kyffin Williams, one of Wales great artists, who generously gave a large number of paintings to a new gallery on Anglesey. His artwork is still significantly undervalued. I suspect that, in the next few years, it will significantly appreciate. If I could afford to buy one of his paintings, I would. He died nearly two years ago, in September 2006. Again, managing his estate is very complex. Nicholas Sinclair, who manages his estate, says that, in some cases, it is pretty much a daily job. He deals with licensing inquiries, memorial exhibitions and the fakes that have started to appear in auction houses. All that work is done on an unpaid basis.
The value of a Kyffin Williams in five years time will largely depend on Mr. Sinclairs unpaid work. Those who own important paintings, or paintings by artists who are recently deceased, are likely significantly to benefit from the artists resale rights going to ensure that families can maintain the heritage of the individual artists. If we want a vibrant British art marketas
vibrant as possiblewe must ensure that the derogation is ended and that artists resale rights apply not only to living artists but to those who are deceased as well.
In the end, there is a moral point: those who benefit most from the great creativity and imagination of individual artists should surely be the artists themselves and the families who supported them, and whom they supported. If we cannot stand up for that in the House, I do not know what we can do of value.
Mr. Ian McCartney (Makerfield) (Lab): I congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing the debate on artists resale rights. I, too, have some form: it was 10 years ago this week, on 15 July, that I first participated in a debate in the Commons on this issue with the right hon. Member for Wells (Mr. Heathcoat-Amory), who sadly has had to leave the Chamber on other business. In addition, I was the Minister of State in the Department of Trade and Industry who, for two years, had to travel around Europe, negotiating with other Governments on this subject. Whether or not my activities were successful is another matter. Such is the life of a Minister.
My visit to Vienna was somewhat more difficult than my visits to Paris, Brussels and other places in Europe. When I arrived, a coalition Government had just taken power. I do not make this point to warn against coalitions, but I had to see two Ministers on the same day: the Minister for Legal Affairs, who was on our side, and the Minister for Art, who was not. Although we had decent discussions, I left with no clue what the position of the Austrian Government would be in the Council of Ministers. I hope that my hon. Friend the Minister of State will not have that problem in his discussions in the coming weeks and months.
We must consider how to manage globalisation with regard to the art market, in the same way that we have done with the financial markets, insurance markets, and education and health services. As markets change, there is always a debate about what role Government should play to help to manage the change, so that at the end of the change resulting from globalisation, there is an effective market in the UK. The marketplace is still changing, and 10 years on, the arguments put to me when I was a Minister remain legitimate.
As the market has changed, we have benefited from a global explosion in the number of paintings coming on to the market and from the price on resale of those works of art. Let us be clear, however: no country has a guarantee for ever and a day that it will be the place in which business is done. I do not agree with my colleagues when they say, London has always been the place, and always will be. That is not true. As we have seen in the past decade, as our market has grown, new markets have emerged and grown from not having a single sale to being the second biggest marketplace in the world. In the next 10 years, there will be further significant changes. I want to ensure that, in the next 10-year cycle, the UK remains in as strong a position as it was 10 or 20 years ago and as it will be 10 or, I hope, 20 years from now.
Difficult decisions have to be made. At the end of the discussions, such decisions can only be made on the balance of probability; they can only be a judgment. As my hon. Friends the Members for Rhondda
(Chris Bryant) and for Sittingbourne and Sheppey (Derek Wyatt) eloquently said, that does not mean that we should use globalisation as an excuse or a barrier, because it will undermine artists and artists rights. They are absolutely right to say that we cannot have art without artists. Nor should we have artists who sell on. Those who do well find that they can look after themselves in the marketplace, but for many artists, that is not the case. Many artists who are deceased left their work to their estate, but that work should be better handled and managed and recognised for its worth. That is all true. To do that, we have to operate in way that is consistent with the changes in the global marketplace. The argument that we heard 10 years ago remains the same today. We should all be in favour of artists rights; but in a globalised marketplace, wherever that artist sells, they should be protected. It should not be part of the selling mechanism that one part of the world has an advantage in the marketplace over another part of the world.
That argument was made 10 years ago about the national minimum wage. The old argument for the minimum wage was that we needed to establish a right in the marketplace so that no employer undercut another on the basis of the wages and remuneration paid to their employees. That applied to small and national markets. Before the national minimum wage was introduced, whether it was a small company or a national company, people were being unfairly undercut in the marketplace. If we have a national mechanism in which everyone is involved, there is no disadvantage. The same is true in a global sense in this international argument that we are having. It is certain that had we not had the derogations that we have had, the UK would have suffered proportionatelyeven in an increasing marketplace.
Mr. McCartney: My hon. Friend says it has not. What is true is that we have been able to argue our corner and maintain our share during the exponential increase in the value of the marketplace. However, my hon. Friend should acknowledge that it is also true that in new and emerging markets and traditional markets, our competitors are at an extreme advantage in the coming years because they are not going to implement any international agreed norm in terms of payments of resale rights for artists. That is the reality. Therefore, we should not be arguing against each other; we should be trying to find a way forward. Perhaps my hon. Friend the Minister will come up with one in a few minutes time. [Laughter.] The hon. Member for Bath (Mr. Foster) laughs. I was not attempting to undermine my hon. Friend.
The point that I am making is that the Government, over the past 10 years, have done quite well in getting us to the present position. Those who cried out from the sidelines have done nothing practical to resolve the two issues that must be resolved: one is to protect our place in the international marketplace, and the other is to do something about artists resale rights, for which there is a desire. We need to do both things. I think that they can only be achieved by international agreementwhether it is by amendments to the Berne convention or by some other mechanism. Perhaps that is how we should be spending our time over the next two or three yearsusing the time for which we are arguing with the EU to have
genuine international discussions, so that we can reach a conclusion on the matter. Even if we do not come to a conclusion, we cannot keep coming back to the marketplace with the changes in globalisation and use that as the only lever to defend the rights of the British marketplace. That will not work and it cannot work.
The Chinese experience proves that. From a standing start, the Chinese now have more than 46 per cent. of parts of the international marketplace. I hope that in 2010 at the Shanghai ExpoI will be the commissioner-general for this House at that eventwe ensure that British artists are prominent, as one of the examples of how the UK is an international market leader and wants to remain so. I also hope that we will open up our businesses to increasing business opportunities in markets such as China.
I know that the Minister and the Opposition spokesmen need to respond to the points made so far, so I will make a final point. I say to my hon. Friend the Minister that I hope that he continues to take the position that he does regarding the negotiations, but at the same time we need to recognise that simply asking for a derogation is not good enough anymore. We genuinely need to try to find a way of gaining an international agreement that deals with the points that all of us want to be dealt with. We want to see Britain in a strong position in the top three places in the international art market, but at the same time we want to see artists and their families, or whoever comes after them when they die, getting their due worth for the works that they have produced, because, in the end, without the artists, there is no marketplace to defend.
Mr. Don Foster (Bath) (LD): I am delighted to follow the right hon. Member for Makerfield (Mr. McCartney) and other hon. Members who have made very valuable contributions: the hon. Members for Aberdeen, North (Mr. Doran), for Sittingbourne and Sheppey (Derek Wyatt), for Rhondda (Chris Bryant) and for East Devon (Mr. Swire). Above all, I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher), not only on securing the debatein a sense, that was the easy bitbut on setting it out in such a rational and calm manner, quite rightly pointing out that we were going to have a finely balanced argument. He put that case very fairly. I will argue that, yes, the argument is finely balanced, but I come down on the other side of the argument to him.
We are debating whether the UK should take up the opportunity of derogation to pass on deceased artists resale rights to their estates and successors from 2010 to 2012. This is a really important debate. However, what has hardly been saidonly the hon. Member for Rhondda mentioned it, I believeis that there are rules surrounding whether or not we can take up that derogation. It is worth reminding ourselves that article 8 of the directive states very clearly that member states may apply to have:
up to two more years, if necessary to enable the economic operators in that Member State to adapt gradually to the resale right system while maintaining their economic viability.
Those are the criteria against which we must judge whether we even have a case that we should be making. I do not believe that we have a strong enough case against those criteria, although I accept that there are counterbalancing arguments.
When we obtained the extension to the derogation, we also obtained a number of other measures, including the limit of €12,500; I think that that is the figure, but if we can get the correct figure on the record, that would help. That limit has been very significant in ensuring the success of the artists resale right scheme for artists who are living now. It has not put a huge burden on the art market, despite all the fears that were expressed on its introduction; we have heard them expressed by other hon. Members today, and they were also expressed in the run-up to the introduction of the scheme in 2006. There were those who said that the art market in this country would collapse as a result of what was allegedly a huge imposition on the art market. We have heard the figures; the art market has doubled from £4.2 billion in 2004 to £8.5 billion today. The capping of that limit has been crucially important to the growth of that market.
We only have to look at some of the record-breaking prices that have been reached recently to show how vibrant the art market is. Reference has already been made to the sale in June of the Lucian Freud picture for nearly £12 million at Christies in London. The interesting point about that particular sale is that the picture was in fact being sold by a private art collection in America, and the owner chose not to sell it in the United States but to sell it in this country instead. That shows the vibrancy of the art market here. With the works of artists such as Freud and Bacon going for such astronomical sums, it certainly seems that that €12,500 limit is hardly having a huge impact on sales. Robin Woodhead, the chief executive officer of Sothebys Europe, said:
At the top end of the market the €12,500 ceiling for droit de suite [ARR] on any single work is not going to be a deciding factor. London is such an important centre and the market here is so strong, led by names like Freud, Bacon and Caro, that ultimately I do not believe it will make a difference.
However, the hon. Member for East Devon and other hon. Members are right to ask whether or not extending the right to another groupthe inheritors of the estate of deceased artistswill make a big difference. So far, nobody has given an estimate as to what they think that figure will be and what the impact of that change will be on the market. I am certainly no expert, and if the hon. Gentleman has better information than I do, I would be interested to hear it. However, the figure that I have been given is that the likely figure that will be collected will be somewhere in the region of £18 million or £19 million. That would equate to something like 0.4 per cent. of the value of the art market, which is a very small proportion in comparison to the figures of 10, 15 or 25 per cent. that we heard earlier on. I genuinely do not see that there has been a strong enough argument to show that this change will have a huge impact on the art market.
We have already heard from the hon. Member for Sittingbourne and Sheppey about the very detailed study that was conducted by Maven Research and I will not repeat all of the figures that he has given. Suffice it to say that the vast majority of artists believe that the scheme has been beneficial to them and that its extension would also be beneficial, encouraging them to do more work, which in turn would benefit the art market. As the right hon. Member for Makerfield has said, without the artists there simply is no art market, so we should be
encouraging them. Equally, the vast majority of those people who work in the art market itself have said that the current system is not burdensomethey say it is neither time-consuming in terms of bureaucracy, nor unduly costly, and they support its extension.
However, there are some matters that it is important to address. The right hon. Gentleman made the very important point that those of us who believe that the scheme should be extended without the derogation for two years must acknowledge the point made by the hon. Member for Stoke-on-Trent, Central and other hon. Members, which is that we must remember that we are operating in a global market. There is a threat from the Chinese, the Swiss and the Americans, who are not applying these sorts of additional costs, however small I might argue those additional costs are, to their art market. That is why the right hon. Gentleman is 100 per cent. right to say that one of the crucial things that the Minister must doI, too, hope that he will do itis to confirm continued support for what was said in 2006 at the introduction of the scheme, which is that the European Union would work to try to ensure that those elements of the Berne convention that apply are adopted globally. It is critical that we work hard to do that and to show the benefits of the artists resale rights worldwide.
However, I would also say that if we in this country are not prepared to carry on with the scheme that we have already agreed to, that can hardly be a very strong argument in negotiations, as we go around the world and say to people, You should do it, but incidentally we are not prepared to do all of it ourselves. It is important that we maintain the scheme.
It is also important that we recognise that some of the arguments against the scheme really do not stand up, for example, suggesting, as some hon. Members have done, that it is only the very rich and very successful artists who have benefited. That is simply not the case and other hon. Members have given the figures that show why it is not the case. Other hon. Members have also pointed out that the costs of the scheme are very much lower than some people have suggested.
Since it was raised by the hon. Member for East Devon, I also want to refer to the letter that appeared in The Daily Telegraphon 30 June. He said that it was a letter signed by the likes of Damien Hirst, Sir Nicholas Grimshaw and others, and that it was hardly surprising that they would say what they did in the letter. However, I am sure that he also looked, as I did, at the full list of 500 artists or members of artists families who were signatories to that letter. The vast majority of them are not household names. They are not making vast sums of money. I shall end by reading a brief extract from the letter:
We are a group of British artists and artists families. Some artists achieve success during their lifetime; many do not achieve recognition until after their death...The Government must make the right decision in order to protect the legacy of artists and the heritage of our nation...We should be entitled to bequeath our intellectual propertythe value of our lifes workto our families. After all, musicians and writers have long been used to a royalty system which has not harmed their respective industries. The Government must implement stage two of the Artists Resale Right immediately.