HC Deb 25 February 1932 vol 262 cc587-95

For the removal of doubts, it is hereby declared that Section eight of the Finance Act, 1926 (which exempts from duties of customs, with certain exceptions, goods proved to the satisfaction of the Commissioners to have been manufactured or produced more than one hundred years before the date of importation) applies in relation to duties of customs chargeable under this Act.—[Mr. Chamberlain.]

Brought up, and read the First time.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

I beg to move, "That the Clause be read a Second time."

The importation of works of art over 100 years old has been free of duty since the Finance Act of 1926, and it was originally supposed that that exemption would apply to such articles which would otherwise be dutiable under the Import Duties Bill. Our attention has, however, been called to the fact that some doubt exists upon that point, and it is in order to remove any possible doubt that I move this Clause.


I desire to thank my right hon. Friend for putting this Clause into the Bill. It does not in any way affect any industry in this country. London has become the centre for the distribution of works of art, and an important business is done here in that way. Perhaps I may add that the Government, in inserting this Clause, are following the precedent of other countries, including the United States, which refrain from taxing works of art.

Lieut.-Colonel SPENDER-CLAY

While I appreciate the concession which my right hon. Friend is making in this Clause, I should like to ask him to consider the possibility of extending this concession to more modern works. [HON. MEMBERS: "Speak up!"] London has become a great centre for the distribution of modern paintings and sculpture. I noticed from the Order Paper yester- day that it was proposed to extend this concession to all works of art, but that is rather a vague term; it is often very difficult to define what a work of art consists of. I certainly think, however, that modern pictures and sculpture should be admitted to this country free of duty, for two reasons. In the first place, I do not believe that the Chancellor of the Exchequer would succeed in getting any revenue whatever from this tax; and, secondly, I believe that the admission of modern works of art from other countries is of very considerable educative value when they are shown in picture galleries throughout the country.

With reference to the observations of my right hon. and gallant Friend the Member for Burton (Colonel Gretton), I think that the United States have gone further than is here proposed, and that at the present moment they remit taxation on works of are altogether. In the case of France, I think that works of art—pictures and sculpture—are taxed at the rate of 2 per cent. if they are sent to a dealer. The result of our taxing modern pictures and modern sculpture would be to destroy London as the art centre of the world. In recent years there has been a tendency for pictures and sculpture to come here and to be distributed from London to other parts of the country.

I should like to draw the attention of the Chancellor of the Exchequer to the extraordinary burden that the taxation of such articles would put upon those who have to deal with them. It is most difficult for them to decide whether, say, a Degas is genuine or whether it is faked, and the same is true of other pictures and sculptures. Then there is the difficulty which dealers will have in getting a drawback on pictures which they may export in future years. Well known pictures remain in dealers' shops in this country for, perhaps, two or three years, and it will be necessary for the representatives of the taxation Department constantly to supervise these works of art on the premises of dealers in London and elsewhere, so that a very heavy burden will be put upon them. The question of drawbacks on re-export will be a very difficult one to deal with.

I am aware that my right hon. Friend may have some difficulty in dealing with it in the present Bill, but I hope he will, between now and the introduction of the Finance Bill, give it urgent consideration, in which case I think he will come to the conclusion that, while, as I believe, he will be gaining no revenue whatever, he will be doing a serious injury to a growing industry in this country, and will be destroying the chances of our obtaining the educative advantages which would follow from the introduction of such works into this country, and which I maintain are of considerable value to the country. I hope, therefore, that my right hon. Friend will reconsider this matter.


I should like to ask the Chancellor of the Exchequer if he cannot extend this exemption to other works of art. As has been pointed out by my right hon. and gallant Friend the Member for Ton-bridge (Lieut.-Colonel Spender-Clay), it is very difficult to define a work of art. It is very hard to draw the line between a work of art in the artistic sense and a work of applied art, As a matter of fact, however, in the American Customs Tariff there is a section which, while it is not very easy or very delicately phrased, does seem to make the distinction tolerably clear. I am sure that my Noble Friend the Member for Lonsdale (Lord Balniel) would reinforce my view with greater knowledge than I possess.

I should also like to ask my right hon. Friend if he could not extend the exemption to manuscripts of literary or historic as well as of artistic value. A number of these are in existence. Some of them may be brought into this country to be kept here, and others because here again, this country is a great centre or market for such objects. One came to my knowledge only the other day. It is supposed to be a 2nd century manuscript of the Bible, two centuries older than the oldest at present known. It has been acquired by an English citizen, and, obviously, it is the kind of manuscript the entry of which into this country one would not desire to prevent or discourage. An extension of the exemption in the two directions I have indicated would not involve the revenue, and, if the Chancellor of the Exchequer could, therefore, see his way to make them, I am sure he would be doing a service both to art and to literature.


I should like to ask the Chancellor of the Exchequer another question. Many artistic productions by British artists have been taken in recent years to France or the United States, and I would ask whether, if such articles are returned to their country of origin, they would be allowed to come back without paying this duty?

4.0 p.m.


I want to say a word in support of the appeal of my right hon. and gallant Friend the Member for Ton-bridge (Lieut.-Colonel Spender-Clay) that modern works also should be exempted from this tax. There are two points of view I want to put. The first is that of a British artist going abroad because the climate in England is not very congenial to painting during the winter. Are the works he paints abroad and brings back to this country automatically exempted, or are they taxed as works of foreign art? The other point is, that if you tax and discourage works of art from coming into this country and into the galleries, you are taxing the future artistic education of painters who may be born a long time from now. I submit that that would be a very regrettable thing to do. At the moment there is only one country that taxes works of art, and that is France, where the duty is only 2 per cent. as between dealers.


I fail to understand why this Clause has been brought in, because we understood that one of the objects of this Bill was to preserve the balance of trade and thereby keep up sterling. Why, then, should we allow these very costly objects of art to come into this country free of tax? Surely it is opposed to the view of the President of the Board of Trade that people should be discouraged at the present time from sending money out of the country in order to bring in very expensive statues and pictures? They are a form of luxury—a desirable one, no doubt—but this country cannot afford luxuries at the present time. If people can afford to buy these expensive pictures and statues, they can afford to pay the 10 per cent. duty. I cannot understand why this exemption should be made.


May I appeal to the Chancellor of the Exchequer to give consideration to the observations of my right hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender-Clay)? Really, he will stultify his object if he does not extend the exemption. I entirely disagree with my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). Has he given this subject a single thought? Is he interested in works of art? Has he considered that there are a number of famous French painters who lived about 100 years ago? My hon. and gallant Friend should really examine this most critically. He will then realise that in the case of some famous French painter who lived about 100 years ago, some of his pictures will be taxed and some will not. It will be a very nice question to decide—the exact year and exact month in which some celebrated French painter did his masterpiece about 100 years ago. Is the right hon. Gentleman going to involve himself in difficulties of that kind? Surely he cannot do so. The whole point about the scheme, I understand, is that it is to be a scientific tariff, an intelligent tariff, not a, rule-of-thumb. That is the whole justification for this particular scheme. How can you tax works of art? Everybody who has any knowledge of dealing in works of art knows that the middlemen, the dealers, will be able, by arranging prices, to escape any kind of liability under this tariff. The only thing that the right hon. Gentleman will do will be to discourage very proper dealing in works of art in this country, get involved in every kind of technical difficulty, and convince the whole world of what the world has long suspected—that we are a nation of Philistines.


The Minister has pointed to the difficulty of defining works of art. I think that if this principle of exempting modern works of art were agreed to, the difficulty could be overcome by the wording of Paragraph 1807, of the United States Customs Tariff, 1930, which defined the matter fairly simply, and, as far as I can see, in a watertight way. I rise to express the hope that the Treasury will see their way to extend to more modern works of art the concession which has been made to older works of art. I see no reason at all why there should be any differentiation between the two trades, and why those who deal in old works of art should be put at an advantage compared with those who deal in new works of art. We have long held in London a supremacy as far as older works of art are concerned. Until five or six years ago Paris held that position as regards modern works of art. During the last few years we have been gradually regaining the position Paris held recently. If you add to the price of these articles in London, the centre of gravity will once more shift back to Paris, and we shall lose a very valuable trade. It is a valuable trade to the Treasury from the point of view of revenue, and valuable to trades like the insurance trade, the packing trade, the frame-makers' trade, and so on. Any number of trades, I believe, will be injured if this duty is put on, and if by the imposition of this duty the trade is moved from this country to Paris.

The hon. Member opposite said, "Why should not a man who imports into this country an expensive picture pay a tax? He does not realise the essential part of the trade. It is not even an import trade. It is a re-export trade, an entrepot trade. Only some £100,000 of such imports last year were retained in this country; 90 per cent. of our imports in this particular trade were re-exported. The result is that the margin which the right hon. Gentleman proposes to tax is negligible, or extremely small, and the machine which he will have to create to tax this small margin of profit is going to be extremely cumbersome, difficult and expensive. I believe he will lose revenue by it. I am right, I suppose, in understanding that the re-export trade will be covered by some system of drawbacks, in which case there is very little left to tax. Mention has been made of some of the difficulties. How is the right hon. Gentleman going to control what is being retained and what is being re-exported? Is he going from time to time to examine the stocks of dealers and of artists If he does not do that, 'he cannot have control. I see no possible system except that which is most formidable and complex, and that is to keep control of export and re-export trade.

Most of the other important points have been mentioned already, but let me remind the right hon. Gentleman of the position of other countries before we launch into this experiment here. It has been tried elsewhere, as has been said, and the tax has been reduced to nothing in the United States, and as between dealers in France to 2 per cent., for the simple reason that it has been found that the tax is not worth collecting, and does injury to trade. If the right hon. Gentleman does not agree to make this concession now, I hope that he or someone will do so in a year's time; but in a year's time I fear that he will have done, perhaps, irreparable injury to this trade. He will have lost revenue, created unemployment, and made the balance of trade, which is in this instance overwhelmingly in our favour, overwhelmingly against us. Those, I take it, are the three objects of the Bill. In this case, unless the right hon. Gentleman makes this concession, he will have done exactly the contrary of what his intention is in this Bill, and very much hope that, before it is too late, he w ill make this concession along the lines I have suggested.


I would remind the hon. Member for Broxtowe (Mr. Cocks), who said that these very expensive articles should be taxed, that on the Order Paper yesterday there was an Amendment in the name of two of his hon. Friends the hon. Member for Ebbw Vale (Mr. A. Bevan) and the hon. Member for Neath (Sir W. Jenkins), along the same lines as that which we are supporting to-day. Also a number of my hon. Friends and myself had an Amendment on the Paper on the same lines precisely. Of course, we were the victims of the Guillotine. We do not complain, but that was the situation in which we found ourselves. It is not a question of making any discrimination in favour of the rich classes, because not only are rich individuals concerned with the importation of foreign works of art, but public museums and public galleries also, and, in our submission, anything that tends to enrich or diversify our national life ought not to have any obstacle or hindrance placed in its way. The principle of Free Trade in thought has been accepted by the Treasury in this connection, because already there are included on the Free List newspapers, periodicals, printed books and printed music. Surely if those are included, it is simple logic to include also original paintings, original drawings, original sculpture, engravings and so on.

There can be no conceivable question of protecting British artists, because the very soul of art, as of poetry, is originality, and no British artist needs any barrier behind which to lurk to produce his works of art. Surely it would be ridiculous to suggest that John Nash or Paul Nash require a tariff harrier. The same is true of sculpture, and I imagine that Epstein would regard as ridiculous the suggestion that he needs any protection against Rodin. Finally I would suggest that it is ordinary intelligence that we should allow these works of art in free. I admit it is difficult to define precisely what are "works of art," but hon. Members will remember that when the War lunacy reached its zenith, certain intelligent persons in this country said that we ought to exclude German music from all our concerts. I suggest that such a course would be aesthetic nationalism run mad. We do not want in this year 1932 to copy the state of mind of those days.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

The House, very naturally, is interested in the many sides of this problem which have been briefly touched upon this afternoon, but they will recognise that it is not so simple a matter as appears on the surface. I noticed that when my Noble Friend mentioned that the Americans had dealt with it in a simple way under the Customs tariff to which he referred, he did not read the provision to which he referred because it was so long.


I did not wish to weary the House by reading a long technical thing. It would take me five minutes to read.


It shows that this is not such a simple matter as appears on the surface. If it takes five minutes to read out that section, the Noble Lord cannot complain if we take some time to deal with an equally complex matter here. Let it be clearly understood that the Government have no antagonism whatever towards sculptors, potters, or art auctioneers, but, after all, when you are dealing with the taxation of almost every commodity under the sun, it is only natural that the proposal made by the Chancellor of the Exchequer should find its place on the Order Paper. But, as I said, there are many aspects of this sub- ject that might be discussed at great length if we had not other business to transact. The Chancellor will reconsider the situation brought before him; and he will certainly take into account any representation. Let us, therefore, now proceed.

Brigadier-General Sir HENRY CROFT

I rise on account of the unseemly attack on me by my hon. Friend the Member for Eastbourne (Mr. Marjoribanks). After the speech of the Noble Lord the Member for Lonsdale (Lord Balniel), this is clearly a subject for the advisory committee, but, at the same time, we should be very careful in realising that works of art under this description may include a very large number of articles and a large trade coming to the country. No one wants to injure the side of the question that has been referred to, although some of us believe you could have protection from Epstein. At the same time, it seems clearly a question for the advisory committee to consider. There are so many reactions, which I could go into for several hours, apart from the fact, which is in the knowledge of everyone, that you have a very large number of your own artists who have not a meat this evening—a fact that ought to be considered. Modern art comes into competition with it. It is clearly a question for the advisory committee, and I hope the right hon. Gentleman will be able to put the thoughts of the House before them.


We on this side of the House fully realise that the importation of all forms of art, such as paintings, sculpture, monuments, etc., have a great educational value; but we say seriously that there is no more harm in taxing dummies than in taxing tummies, and, seeing that the National Government has already put a tax or, food, we do not see why they should hesitate here.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause added to the Bill.