Artist’s Resale Right Regulations

My Lords, I congratulate my noble friend Lord Brooke of Sutton Mandeville on securing this debate on an issue of such crucial importance to the art market. I join with my noble friend Lord Jopling in remarking on the brilliance of his speech. This droit de suite directive has been described to me as the darkest cloud on the horizon for the international competitiveness of our art market—a statement with which I strongly concur. As a dealer in watercolours myself—I state that interest—I am also a lover of art and a Conservative. I have opposed this paradoxical directive from the very start. I strongly believe that it will be highly detrimental to the British art market, and will seriously damage that part of it which depends on imported goods. The 5 per cent import VAT mentioned by the noble Lord, Lord Dubs, has already considerably damaged the British art market, in driving the very top of the market to, principally, New York, whereas we used to have almost a monopoly. I welcomed the general cross-party opposition to the original directive, and was somewhat surprised by the Select Committee’s response to the issue. It was upsetting that Her Majesty’s Government finally had to adopt the directive on 27 September 2001. However, it is more upsetting, now that we appear to have no option but to implement the directive, that this draft statutory instrument gold-plates the directive, rather than supporting most of the significant concessions secured by the Government during negotiations. As the Merits of Statutory Instruments Committee has highlighted twice in its report:"““the Regulations go beyond the minimum required by the Directive in two respects. These are: the minimum price threshold for a sale to be liable to resale royalty, which the Regulations set at 1,000 rather than 3,000 euros; and the provision made in the Regulations for joint liability of the seller and an art-market professional involved in the sale””." We have heard about that already. The British Art Market Federation argued that considering the force of the British opposition, this gold plating is particularly inappropriate and unnecessary and that it is inconsistent with stated government policy on EU directives. I look to the Minister to give firm assurances today that this will be altered. I suggest that the current draft SI is taken away and a new draft SI produced and published in its place. As the House of Commons Select Committee pointed out in its report The Market for Art:"““The state of the visual arts is a useful proxy for the health of our cultural life””." Britain currently leads Europe in the provision of services for the buying and selling of art. Our country has more than 50 per cent of the European art and antiques market and 25.3 per cent of the global market. It is a market made up of around 10,000 businesses that provides employment for more than 37,000 people. The UK art market is particularly dependent on cross-border trade. In this key respect, it is the only serious global competitor of the United States. This directive, and the subsequent SI that we are considering today, will materially reduce our competitiveness, encouraging the displacement of the market to the United States and Switzerland which, not surprisingly, have expressed no intention of following suit when the levy comes into force in Britain. This will cost our market millions in revenue and a significant number of jobs. Research in countries that are already enforcing the droit de suite has shown that the benefit to artists has been virtually insignificant, as did the Patent Office’s initial compliance cost assessment in 1996, Market Tracking International’s report in 1999 and the Patent Office study in 2003. Will the Minister explain clearly to the House why the threshold below which the droit de suite royalty is not payable has not been set at €3,000? I believe that there is an error in the evidence that the Design and Artists Copyright Society gave to the Select Committee. On the one hand, Her Majesty’s Government say that they want to help struggling artists, but on the other, they put forward an SI that will work against them. That is a paradox I cannot condone or, indeed, understand. The most significant concession gained by Her Majesty’s Government in the negotiations was the permitted derogation by which the introduction of the directive for those entitled to royalty for up to 70 years after the artist’s death can be delayed until at least 1 January 2010. Why have Her Majesty’s Government not taken advantage of that provision and extended the date of derogation until 2012? That could have been one occasion where gold-plating would have been worth while. Finally, why have Government continued to go down the gold-plating path, particularly as there are very few examples in UK copyright law of such a system? Indeed, the Merits of Statutory Instruments Committee suggested that it may have been more appropriate to adhere to the minimum requirements on these points in the initial implementation of the directive. I find myself in the unusual position of supporting the issues that the Government fought for, but not the recommendations of the Select Committee or the SI as we see it in front of us today. I hope that the Minister will not disappoint me and will provide assurances that the gold-plating of this proposed regulation will be removed and that Her Majesty’s Government will now implement all the concessions they gained in negotiations. That is the only way we can make sure that our art market remains one of the strongest in the world.