§ Lord Pearson of Rannochasked Her Majesty's Government:
Further to the debate on 10 December 1997 (H.L. Deb., col. 196) and in the light of the European Union's forthcoming framework proposal to boost job creation in the arts sector, what progress they are making to prevent the European Union's imposition of increased VAT and droit de suite tax on the British international art market; and what is their estimate of British jobs and prosperity which may be lost if those taxes are imposed. [HL1310]
§ The Minister of State, Department of Trade and Industry (Lord Simon of Highbury)The European Commission has recently begun the process of reviewing the effects of the Seventh VAT Directive on the international competitiveness of the Community art markets. Customs and Excise have already met Commission officials to discuss the handling and scope of that review, and will be closely involved with it to ensure that the position of the UK's fine art market is properly represented. They will be maintaining close liaison with the British Art Market Federation and with other government departments over its progress.
So far as droit de suite is concerned, the Government consider the Commission's proposal for a directive to be ill-considered and damaging to international competitiveness, and will continue to argue robustly against it in negotiations.
There are no estimates of the combined effect. However, Department of Trade and Industry studies of droite de suite estimate that if all UK sales of works of art to which the right would apply were to be diverted elsewhere, British auctioneers and dealers would lose up to £68 million per annum in fees and up to 5,000 jobs.