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10.40 am

Adam Afriyie (Windsor) (Con): There have been some excellent speeches today. Those from Government Back-Bench Members were a mixed bag, but they were fascinating nevertheless.

I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing the debate. He spoke in measured tones about the worthiness of the cause, and I agree entirely that artists should share in the value of future transactions involving their work. He spoke about the 568 British beneficiaries so far, and called in a measured way for an extension of the derogation to 2012, considering the effect that it might have on the art market.

The hon. Member for Aberdeen, North (Mr. Doran) was in favour of immediate implementation despite the risks, and the former shadow Secretary of State for Culture, Media and Sport, my hon. Friend the Member for East Devon (Mr. Swire)—the thin cat—made a both knowledgeable and impassioned plea that we take a realistic view of the impact on the art market.

The hon. Member for Sittingbourne and Sheppey (Derek Wyatt) made great play of defending artists. I could not help wondering if he was the same hon. Member who boasted in the not too distant past about the number of illegal music downloads he had enjoyed. To a large degree, I had to put his comments in that context.

Derek Wyatt: Actually, it was not me but my children. The hon. Gentleman should put that right.

Adam Afriyie: I am happy to put the record right: it was the hon. Gentleman’s family rather than him.

The hon. Member for Rhondda (Chris Bryant) spoke in favour of immediate implementation. He locked horns during interventions on him and made an important point about the maintenance of existing works of art by those who inherit them. That was a key point for all of us to take on board.

The right hon. Member for Makerfield (Mr. McCartney) rightly drew our attention to globalisation and the importance of international agreements and the international context. I could not help wondering whether he had had a direct hand in some of the formal negotiations that brought us to the present reasonable position.

Given the amount of time available, I shall briefly whiz through my points. Stage 1 of the EU regulations on artists’ resale rights was implemented in 2006. It entitles artists to a percentage of the sale price whenever original art works are resold in the British art market. The Government negotiated a delay to the full implementation until 2010, which can be extended on request until 2012.

Stage 2 would extend the resale rights to the heirs of deceased artists for up to 70 years after their death. The Government are currently deciding whether to push ahead with implementation or to apply for a further derogation. I hope that today, after so many representations, the Minister will finally reach a conclusion on the matter, because the current limbo and uncertainty are uncomfortable.

The UK, thanks to its artists, traders and entrepreneurs, is in the enviable position of being at the cutting edge of the art scene, as well as having a world-leading art
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market. Our painters, designers, sculptors and cartoonists contributed to an art market that was worth about £8.5 billion in 2007, as has been pointed out. It is the Government’s responsibility to ensure that no unnecessary obstacles are placed in the way of British talent, and I am not sure that we need extra bureaucratic grit thrown into the smooth-flowing machinery that is today’s successful British art market. We must nurture self-evident talent and protect and promote the free market that has given us such success.

The newly introduced resale right is certainly enabling artists and their heirs to share in the future traded value of their work, but many questions need to be asked. What will be the long and short-term impacts of the new resale rights on the UK art market? Will resale rights act as a barrier to emerging artists?

I appreciate that the decision has not yet been made, but it is worth reflecting on whether it is appropriate to extend the rights to the heirs of deceased artists. Some of those people may be non-UK residents. Indeed, some of the trusts may be based overseas and have aims that are in conflict with the UK interest. I do not express a view on those issues but simply flag them up for consideration before it is too late. I invite the Minister to explain the reasoning behind the decision that he may or may not have reached, because if the Government do not have a clear answer—[Interruption.] I am not pre-empting his taking a firm, clear view today. I hope that he will, but I am not pre-empting him.

We certainly believe that it is best if creators enjoy the value of the work that they create, not only because it is right but because it creates an incentive to develop new works of art for the enjoyment and economic benefit of the nation. The argument is that artists’ resale rights will enable creators and their heirs to share in future transfers of the value of their work. It is equally important that the law creates a level playing field for those engaged in similar pursuits—that is an age-old principle. It is worth bearing in mind that the resale right brings the copyright for visual artists into line with those for other artists such as writers and musicians. I suspect that that is welcomed on both sides of the House.

Perhaps, above all, it is essential that new regulations do not restrict UK competitiveness, so it is reassuring that the independent report commissioned by the UK Intellectual Property Office suggests that the resale right has not so far damaged UK businesses. The UK art market has been growing at a rapid pace: its £4.2 billion value in 2004 grew to £8.5 billion in 2007. I recently met with Joanna Cave, the chief executive of the Design and Artists Copyright Society, who emphasised that the royalties are capped at €12,500, thereby limiting future potential royalty costs, that the right does not apply to private sales, and that there is no evidence that phase 1 of the resale rights scheme has harmed the UK art market. However, I would point out that these are early days and that the full evidence is yet to be seen.

There remain major concerns about the implementation of phase 2. Although the resale right may enable artists to share in the future value of their work, there are concerns about the long-term impact on the competitiveness of the UK art market. Some crucial questions must be answered by the Minister today.

First, will the measure damage the prospects of new artists? Will art houses begin to avoid selling the work of unknown or emerging artists in order to avoid the
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added burden of paperwork, bureaucracy and expense? The IPO indicates that 80 per cent. of all payments were distributed among the top 100 artists, which seems to imply that, at present, it is protecting the most popular artists rather than specifically helping and encouraging new talent.

Secondly, what is the short-term impact? Extending the resale rights of deceased artists will account for a much larger share of market sales.

Chris Bryant: I have been listening carefully to the hon. Gentleman. He seems to be saying yes and no at the same time. Is he in favour of the artists’ resale right? Does he or does he not believe that there should be a derogation?

Adam Afriyie: I thought I was being fairly measured in my comments, unlike the hon. Gentleman. I am merely pointing out both sides of the argument to show that this is a difficult judgment to make, which is why I shall urge the Minister to make a decision immediately.

Chris Bryant: So no policy.

Mr. Eric Martlew (in the Chair): Order.

Adam Afriyie: If the hon. Gentleman will stop barracking, our position is absolutely clear. The resale right may enable artists to share in the increasing value of their work, but there remain real concerns over the long-term impact on the competitiveness of the UK art market. Ill thought through European regulations could have a devastating impact on the UK economy. To ensure effective implementation in the UK, we are calling on the Government—I shall do that in a minute—to extend the derogation until 2012. That is clear, and I am glad that the hon. Gentleman had the patience to listen.

Royalties collected in 2007 accounted for 0.04 per cent. of the total value of the UK art market, whereas they would have accounted for 0.2 per cent. if they had been collected for living and deceased artists. On the one hand, the amount represents a tiny slice of the total UK art market; on the other hand, it represents a massive increase in share. In fact, it is a 500 per cent. increase—a massive jump.

Thirdly, what is the long-term impact? I received correspondence from the British Art Market Federation, which points out that the UK art market has benefited from a global art boom in the past few years but that we should consider the long-term effects if we are not in a boom situation in the future. New York has arisen very quickly.

Fourthly, we must ask what will be the effect on international UK competitiveness. The right hon. Gentleman put that point very well when discussing globalisation and the context in which we survive. In seeking the delayed implementation of the measure, the Government sought a commitment from the European Commission to introduce resale right into the international Bern convention, the idea being to ensure that UK and European art markets could compete on a level footing with others, namely in the US and Switzerland. If the UK moves ahead with stage 2 without progress on international negotiations, the UK is bound to suffer. I
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urge the Minister and the Government to get off their hands and get this negotiation underway and ensure that it is in place.

We must not forget that this is a retrospective introduction of a right. That is something that we should always be cautious about. I urge the Minister to seek a derogation until 2012 and I look forward to a crystal clear response this morning, because any further hesitation or delay only insults our artists and risks our international art market.

10.51 am

The Minister for Science and Innovation (Ian Pearson): I warmly congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing this debate. I am glad to have the opportunity to talk about the artists’ resale right. I acknowledge the substantial contributions made by my hon. Friend the Member for Aberdeen, North (Mr. Doran), the hon. Member for East Devon (Mr. Swire), my hon. Friends the Members for Sittingbourne and Sheppey (Derek Wyatt) and for Rhondda (Chris Bryant), my right hon. Friend the Member for Makerfield (Mr. McCartney), the hon. Member for Bath (Mr. Foster) and the official Opposition spokesman, the hon. Member for Windsor (Adam Afriyie), who seems not to have realised that last week we launched a consultation document on the artists’ resale right derogation for deceased artists. It is therefore a little premature of the hon. Gentleman to expect me to make decisions immediately.

I appreciate how important the artists’ resale right is, both to artists and to the art market. The UK has a thriving, prosperous art market of which we can be justly proud. It makes a huge contribution to our economy; it is the largest art market in Europe and one of the largest in the world. I appreciate the arguments made by right hon. and hon. Members about the art market being highly mobile.

Without the creativity of artists there would be no art market. Artists make a valuable contribution to the cultural identity of the UK. The Government want artists to be to able to benefit from their creativity. The artists’ resale right raises strong, passionately held views on both sides in the debate, as we have heard this morning. The Government must strike the right balance between the interests of artists and the interests of those selling their work.

Droit de suite has been in place for just two years in the UK. The latest figures from the Design and Artists Copyright Society show that it has collected £4.2 million on behalf of 1,444 artists. That may not sound like a great sum in overall UK economic terms, but it is important to those who receive it. Has the introduction of droit de suite damaged the UK art market? The short answer, at least so far, is no. Since the introduction of the ARR, the UK art market has continued to grow. In fact, according to a recent study, it has grown more in the past two years than the art market in the United States, as a number of hon. Members have said. But we must not be complacent. Markets can change rapidly. It has been represented to us that the true impact of the artists’ resale right on the art market may be masked by the current derogation.

We must ask ourselves who is right: are we peering over a cliff edge or can we count on our relatively benign experience so far as a reliable guide? The
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Government are not omniscient in these matters; we are keen to listen to the different opinions out there. That is why we have launched the consultation. However, as those who read the consultation will understand, it recommends that, based on the evidence currently available, the option to seek an extension of the derogation is taken. However, the UK Intellectual Property Office is seeking views and evidence on whether that position is correct.

The consultation was launched last week. As we have heard already, the derogation was one of a number of concessions that the UK successfully fought for during negotiations on the directive, in recognition of the fact that the transition to artists’ resale rights may not be completed by 2010. Member states that were entitled to use the derogation can apply to continue to use it until 1 January 2012, which would allow more time for the art market and collecting societies to adapt to the right.

My hon. Friend the Member for Stoke-on-Trent, Central asked whether the right to derogate could be extended for a further 10 years. Our priority must be to deal with the possible extension of the derogation to 2012. As he will be aware, a longer derogation would involve reopening the EU directive. We cannot be clear that member states or Members of the European Parliament—this would be a matter for co-decision—if given the chance, would not want to change other aspects of the right, such as the current limit on the cap, increasing the rate, and so on. My hon. Friend and those in the art market will want to reflect carefully before pressing us for a further derogation. At present, we need to focus on whether it is right for the derogation to be extended to 1 January 2012. Clearly, there are differing views on this matter, as we have heard this morning. I heard what my hon. Friends the Members for Rhondda and for Sittingbourne and Sheppey said in their powerful speeches.

Hon. Members also mentioned the important issue of the international context of the decisions that we are
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taking. I take on board the points made by my right hon. Friend the Member for Makerfield and the hon. Member for Bath. As I said, the UK’s art market is the largest in Europe, so we need to consider the international position. The main competitors to the UK art market are, as we have heard, not other EU member states, but the United States, Switzerland and China, none of which has introduced an artists’ resale right. It has been argued that the application of the right could mean a seller of a deceased artist’s work moving the sale out of the UK to avoid the artists’ resale right payment. The hon. Member for East Devon made that point clearly in respect of collections. We want to hear more evidence on that.

I take the point about the need for international agreement and those aspects of the Bern convention that are appropriate in this regard. Surely, it is right that globally we look to have a level playing field, and I can confirm that the Government want to pursue that. Other countries are showing an interest in the artists’ resale right. Both Australia and New Zealand are considering introducing resale rights. That is positive news, but the major countries where art dealing takes place need to be part of an international agreement.

We also need to consider the effect that the introduction of the right for deceased artists will have on the administration of payments. That has not been discussed quite so much this morning, but it is important. I pay tribute to the work done by the collecting societies. That was acknowledged by my hon. Friends the Members for Stoke-on-Trent, Central and for Rhondda. The burden of administering the right falls on the art market. I do not accept that it is particularly burdensome to administer, but we always want to consider potential burdens on business.

I welcome this debate, which will help to inform the debate launched by the consultation document. I thank right hon. and hon. Members for their interest in the issue and encourage them to make representations during the consultation phase, which ends on 22 September.

8 July 2008 : Column 369WH

Human Trafficking

11 am

Mr. Anthony Steen (Totnes) (Con): Every few months, we debate human trafficking in the House and, with wringing of hands and tearing of garments, every speaker highlights how awful it is. Ministers are abject with apology and say how dreadful it is, and the Government say that they are doing everything they can to stop it. Let us give the Minister his due. He is thoroughly decent and is doing a difficult job with conviction and humour. We all know that he is a good egg. He travels the world searching for answers, studying the problem and meeting officials and, rather like “The Pilgrim’s Progress”, is bedevilled, I hope, by obstacles rather than temptations. I pay tribute to his commitment.

I had not considered human trafficking before 2005, although I was trained in the caring professions. I first became aware of its horrors when, as a member of the Select Committee on European Scrutiny, I visited Romania and Bulgaria before their accession to the EU. I had never travelled to eastern Europe before 2005, and I had no idea of the extent of the abject poverty there, nor that fraud was a recognised way of life and that the judiciary and the police were riddled with corruption. I was also oblivious to the fact that there is, and has been for generations, a Roma community with 6 million to 8 million disadvantaged people living in a similar way to that in the middle ages in Britain. Some 70 per cent. of people in most towns and villages live on the breadline, and their only means of transport is a horse and cart, with the horse sharing the accommodation with the family.

In that environment, there are inevitable risks of young people in such communities being trafficked to more prosperous western European countries. Children are often sold through debt bondage to successful gangs who prey on the poorest members of their own communities. Some are duped by the lover-boy syndrome, and are persuaded by lucrative jobs that do not exist but are under the illusion that the Elysian fields are not far away.

Three years ago, trafficking in Britain was hardly acknowledged. There is relatively little mention of it in Hansard before 2004. Trafficking tended to be confused with prostitution, and I believe that it still is. Child trafficking was considered to be something to do with adoption from families who had too many children and wanted to find homes for them. It was something that charities dealt with.

What is the reality? Human trafficking is one of the most lucrative businesses in the world, comparable drugs and arms dealing. If it were not lucrative, traffickers would not do it. However, when the going gets tough, traffickers become craftier. If the risks become greater and the money less certain, traffickers switch to another country or another field of criminal activity. There is a pan-European criminal network, but much trafficking is conducted by a loose association of men and women who make a living by exploiting poor and vulnerable younger people who are looking for a better life.

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