HL Deb 01 April 1996 vol 571 cc7-9

2.53 p.m.

Baroness Rawlings asked Her Majesty's Government:

What action they will take at the next meeting of the Council of Culture Ministers to counteract the European Commission's proposals to harmonise the droit de suite (artists' resale rights) levy which will greatly affect public sales of works of art in Britain and Europe as a whole.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)

My Lords, we shall need to consider the Commission's proposal on droit de suite—that is, artists' right to share in the proceeds of the resale of their works—and intend consulting all interested parties in the United Kingdom about it. However, the Government are not persuaded that there is a case for the introduction of droit de suite into the United Kingdom.

Baroness Rawlings

My Lords, I thank my noble and learned friend for that satisfactory Answer. However, as the Minister knows, the new rules on the introduction of VAT on works of art which came into force last year are already having a damaging effect on the UK trade. This is because there is no import tax into Switzerland or the United States. Are the Government aware of the serious economic consequences of this provision?

Lord Fraser of Carmyllie

Very much so, my Lords. We are conscious that one of the consequences of introducing this provision into the United Kingdom could be the displacement of art sales from the United Kingdom to other countries where there is no such suite. I imagine that New York is likely to be the most prominent beneficiary were such a change to be introduced. The potential impact on the London art market is clearly of utmost concern and it is for that very reason that we wish to consult all interested parties in the United Kingdom.

Lord Strabolgi

My Lords, is the Minister aware that this droit de suite levy, rising from only 2 per cent., will do little to help young artists but could amount to as much as £30,000 on a major work of art and in consequence, as the noble and learned Lord said, sales of important 20th century art are likely to move from London, which is at present the centre of this art market, to New York?

Lord Fraser of Carmyllie

Yes, my Lords. My understanding is that the Commission has not yet put forward its final set of proposals before the matter goes to the Council and others for consideration. However, the idea is that there should be a sliding scale with the levy going from 2 per cent. to as much as 4 per cent. In some circumstances, for the cheaper works of artists, clearly that would not be a very significant addition to the income of an artist or his heirs, but it could be an extremely expensive item and it could have a serious deterrent effect on those who wish to use the London market. It would be a very serious consideration if London were to lose its pre-eminence.

Lord Pearson of Rannoch

My Lords, does my noble and learned friend agree that the result of his consultation exercise may well be a foregone conclusion in this country but that it will not do him much good when he comes to negotiate the matter in Brussels? Does he agree that with this piece of legislation, as with the common fisheries policy, the common agricultural policy, the fruit and vegetable regime and many other pieces of damaging legislation from Brussels, the Government will be up against a qualified majority vote within the terms of the treaty which was unfortunately signed and that there will not be anything they can do about it?

Lord Fraser of Carmyllie

My Lords, it is my understanding that the Commission intends to bring this proposal forward under Article 100a which would mean that qualified majority voting would be the order of the day. It is nevertheless right that we should go forward with the consultation I have indicated. I am already very much aware of the strong representations that has come from the major auction houses in London setting forward their opposition to it. I understand that there are others who would purport to act, or may indeed act, for artists and their representatives who might take up a different point of view. I think it only right that we should carry forward that consultation.

Lord Jenkins of Putney

My Lords, is the noble and learned Lord aware that the opposition to droit de suite comes exclusively from the fat cats? So far as concerns the artists, this is right and is supported by all right thinking people as being a means whereby the artist is able to have a small share in the increasing value of his work. Therefore, it is my hope that the noble and learned Lord will not be influenced by the opposition that has been expressed, from wherever it has come, and will consider the matter on its merits. If he does that, he will accept it.

Lord Fraser of Carmyllie

My Lords, as I have indicated in my previous answers, I am well aware of the strong representations from major auction houses in London. I do not think that their views are to be set aside. London enjoys a worthwhile pre-eminence and I very much hope that that can be maintained. The noble Lord makes my point for me. I indicated that it was right that on the proposal coming from the Commission there should be proper consultation. It is a rather extraordinary position that in some countries in Europe where this droit is already allowed it is nonetheless not implemented. That seems to be the least satisfactory of all positions.

The Earl of Gowrie

My Lords, I declare an interest as a director of an auction house. Will my noble and learned friend reiterate to the noble Lord, Lord Jenkins of Putney, and others that this is not an issue that is going to affect the auction houses themselves, simply the locations in which they conduct their business? Is my noble friend aware that it is not universally accepted by artists that this programme is in their interests? In the very unfortunate event of there being a qualified majority vote on this issue, can we for once copy our European partners and ignore it?

Lord Fraser of Carmyllie

My Lords, my noble friend will not be surprised if I do not answer directly his last point. The substance of what he has to say is right. It is not that artists or their heirs may receive something that they would not otherwise have received. The greater likelihood is rather that the sale of those works will not be undertaken in London or within the European Union, but the sales will be displaced either to the United States, other than to California, where no such right exists or, alternatively, they may take place in Switzerland.

Lord Haskel

My Lords, is the Minister aware that there are other differences apart from the 3 per cent. droit de suite levy in the art market between France and the United Kingdom? For instance, is the Minister aware that in the United Kingdom there is 2.5 per cent. VAT, but in France it is 5 per cent.? Is he further aware that in France dealer commissions are limited to 9 per cent. by law, and in the United Kingdom dealers can charge up to 15 per cent.? Will the Minister take these matters into account when conducting his consultations? Does he agree that harmonisation would bring real competition to the art market in the European Union?

Lord Fraser of Carmyllie

My Lords, I am not clear that I understand from the noble Lord's question whether he is in favour of the introduction of this measure into the United Kingdom. I am sure that in a supplementary question he will make it clear from the Opposition Front Bench where exactly he stands on this issue. I would have thought that there was little within the operations of the commercial auctioneering firms in France that we wish to copy. The only good news that has come out of that is the announcement by the French Government that, after considerable pressure, its market will be opened up on 1st January 1998. That is a welcome development; but we should like that date brought forward.