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Lord Clement-Jones: My Lords, I thank the Minister for his introduction of the regulations and the noble Lord, Lord Brooke, for giving us the opportunity to debate these regulations so vigorously.
I and my honourable friends in another place have considered very carefully the various reports, including that of a Select Committee of the other place, the Merits of Statutory Instruments Committee and, most recently, the report of the London Assembly Economic Development, Culture, Sport and Tourism Committee. We have held meetings with representatives of the British Art Market Federation and DACS.
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Despite the vigorous arguments put forward by BAMF, we have come to the conclusion that the Government's approach is correct and that the €1,000 threshold set out in the regulations is right, as is the decision to require collection by collection societies. That is the conclusion that the Culture, Media and Sport Committee came to last year, and we have reached it because of very similar motives.
We on these Benches are not great fans of the resale right; we believe that it is an extremely blunt instrument, for many of the reasons put forward today. The original reservations of the noble Lord, Lord Freyberg, were entirely correct. However, on the basis that it is a fait accompli in EU terms, it is important that it benefits young, newly emerging artists and not simply established or better known ones—or, indeed, their heirs.
At the €1,000 level, it is estimated that some 50 per cent of living artists will benefit. This is where I am at variance with the figures put forward by the noble Lord, Lord Brooke.
Lord Brooke of Sutton Mandeville: My Lords, the Arts Council thinks that there are 96,000 artists. In a submission to parliamentarians, DACS suggested that there might be 130,000. We are talking about a figure of less than 1,000. How does the Liberal Democrat Party make that 50 per cent?
Lord Clement-Jones: My Lords, that is the evidence that has been put forward by a number of bodies, and it is what we rely on.
That, surely, must be the right way forward. It is clear that the Government have changed their mind in terms of where the threshold should lie, but we believe that they are right to do so.
The countervailing argument put forward by BAMF is strongly supported by the report from the London Assembly's Economic Development, Culture, Sport and Tourism committee—that the imposition of a lower threshold will greatly damage the competitiveness of the London art market. That report faithfully reflects concerns about trade going to New York and Zurich but it does not give any conclusive evidence of this. In any event, such evidence as there is affects the higher priced works of art, not those at the €1,000 to €3,000 level. I accept that at the top level, that may be the case in future, but there is no flexibility in applying resale right at that higher level. It is true that, as the London Assembly report points out, multiple costs add up, but I do not believe that this is a reason to penalise less well known artists.
Let us also not forget that there will be a maximum of €12,500 of royalty payments, the exclusion of works sold on within three years for less than €10,000 and the exclusion of works of deceased artists until 2010. I welcome the Minister's statement about the application for permanent derogation. I strongly agree with the London Assembly committee report on the question of monitoring. I want the Patent Office to publish details of how it intends to measure the impact of the droit de suite on the UK art market. In
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particular, the committee wanted to assess the impact on the sale of contemporary works, the diversion of the market from London and a full cost/benefit analysis of the application of the minimum price at which the directive applies. Those are all sensible suggestions and I hope that the Minister will reply positively.
9.30 pm
As regards the collecting society aspect, although DACS is well known in this field, I do not believe that there should be a monopoly. If another body or commercial organisation wishes to perform this role it should be able to do so.
I do not know what weight to attach to the Merits Committee report, but it does not clearly state that the regulations are an inappropriate way of implementing an EU directive. The committee's reasoning does not lead to that conclusion.
Finally, I am in good company. The noble Lord, Lord Beaumont, who represents the Green Party in this House and has a much better collection of works by young artists than I do, has asked me to indicate that he also agrees with the Government's approach.
Viscount Astor: My Lords, the question that the Minister failed to address when he introduced this order was why the Government have changed their mind. Indeed, he did not really say that they had changed their mind: he skipped over that point. It was demonstrated by the speech of my noble friend Lord Brooke, who said almost everything that can be said in this debate and destroyed the Government's case. Why did the Government change their mind? There is no requirement under the directive to charge a retail levy on sales below €3,000, so by taking this voluntary decision to do so, the Government will have added considerable costs and complication which will affect smaller businesses.
As we have heard from many of those who spoke this evening, this is directly against the advice of the Chancellor of the Exchequer, Gordon Brown, who says that he is concerned about,
"the goldplating of European regulation where in the process of translation into our own UK laws we end up with additional and unnecessary burdens".
What is more, he went on to say:
There is not much enforcement here—not even an unrigorous enforcement.
In the Explanatory Notes to the order under Article 4.1.5, the Minister says:
"The benefit of this measure to UK artists together with the cost-benefit analysis makes this an exceptional case justifying implementing beyond the absolute minimum required by the Directive".
That is an extraordinary statement as it directly contradicts what the Minister said to the Select Committee in March 2005, where he said that applying a level below €3,000 would mean that the higher,
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"administrative costs become an absurdly high proportion of the actual payments which will go to artists".
How does the Minister justify what he said to the Select Committee and what he said this evening? I fail to understand.
The Minister attempted to justify it by claiming that the costs could be £1. If one replied to a request by letter, the stamp would cost 30p. What do the envelope and paper cost? The idea that a reply to DACS could cost £1 is ridiculous. I thought that it was a joke at one point. The time to employ someone just to deal with that whether by letter, fax or email, would be more than a pound. It is ridiculous. The art market itself thought that it would cost about £30. The Minister had the good grace to admit that the variations were between 46p and £50, but the idea of claiming that it was £1 is ridiculous. My noble friend Lord Howe amply demonstrated that in his intervention.
It is even stranger when the Netherlands and Austria, both of which will be introducing this right for the first time, have opted to take advantage of the €3,000 limit. Now Germany, for example, which was one of the principal supporters of the directive, plans to exclude sales below €1,500 and may yet opt to exclude sales below €3,000. The French, who after all invented the whole process, seem to be dragging their feet and are not going to implement the directive on time at all. Perhaps the Minister could tell us what their timetable is. It is extraordinary that we are going to implement a European directive when the people in Europe who have been pushing it are not going to do so themselves.
I do not accept the argument that the measure will necessarily drive a lot of sales abroad, because at the lower end that is difficult to do; at the higher end, it certainly will, and we have seen that with VAT, which has affected the art market, and has meant that sales have gone to Geneva and New York. But it will impose a whole load of costs on dealers, which will affect the value of that work of art, which will then be detrimental to the artist. So it is not going to work.
The London Assembly, which is not notably a strong supporter of a vibrant business economy, has criticised the Minister, but he did not seem to take much note of that. The Minister was extraordinary dismissive, too, of the report from the Merits of Statutory Instruments Committee, on which my noble friend Lord Jopling sits. When the committee says that we may be inappropriately implementing European legislation, to dismiss that as the Minister did by saying that the committee did not study it closely is simply dismissive. The Government should address the issue properly, when the Merits of Statutory Instruments Committee comes up with something, and I am afraid that the Minister did not do so—and I have to say that it is not the first time that it has happened in this House. My noble friend Lord Inglewood asked a number of questions about EU law, which, again, I hope that the Minister will respond to.
The House of Commons Culture, Media and Sport Committee, in its rather quick report, recommended a lower threshold; but it also recommended that there should be a review, and that we should see what the
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impact of that would be. Can the Minister give an assurance that in a review he will also look not at the total impact but at the impact of the limit? Will the Government be allowed to raise the limit? Can he assure me that we will not be as we have been under other EU legislation, such as that on VAT, whereby once you have set a limit it is impossible to change it?
I shall be brief as it is getting late and I know that the Minister and my noble friend Lord Brooke will want to respond. As the Times leader says, what the Minister has done is to devalue and undermine the British position in the bigger battle over whether the resale right should after 2000 extend to dead artists. He has let down some of our European partners when we had that clear blocking majority, and those partners must be surprised. But the most surprising thing of all is the Government's whole response. What they did—and we supported them—was to go to Europe and win the battle, and then they came home and thought about it and surrendered. It is an extraordinary state of affairs.
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