Artist’s Resale Right Regulations

My Lords, first I declare an interest as an artist who at some stage could benefit from the new measure. When I last spoke on this issue, on 10 December 1997, I was opposed to the whole idea of artists’ resale rights because I felt that there was a different principle involved with the sale of art and that of other creative mediums such as writing and music. I was concerned too about the increased bureaucracy that introducing resale rights would involve, and the fact that only the most successful artists stood to benefit. We have heard particular mention of a small number of deceased artists such as Matisse and Picasso, as has happened in countries such as France which already has resale rights. In addition I was anxious that the levy might have a potentially detrimental effect on the UK’s position as the art market capital of Europe. While my reservations about many of these issues still stand, the analysis undertaken by the DTI and others has persuaded me that the effect on the art market will not be as severe as has been widely announced by its representatives. I further believe that the ruling could actually benefit more artists than initially appeared to be the case. The reason is the Government’s adoption of the lower, €1,000 threshold for liability to resale rights rather than the €3,000 minimum laid down by the European Parliament. The Government have done the right thing in opting for the lower price threshold in order to allow as many artists as possible to benefit from the resale rights, and not just better-off and often deceased ones. Much has been made by those representing the art trade of the increased bureaucracy that will flow from going beyond the EU’s minimum threshold. While I share their concern about the added burden for art dealers and auction houses, and worry that dealers could be tempted to overstate the costs in order to offset them, it seems nevertheless unreasonable that artists who are more in need of extra income should be left out. To have complied with the €3,000 minimum would not have made greater sense than what we have now. The lower threshold significantly increases the number of artists who benefit from the resale right and broadens the scope to include more photographers, illustrators, crafts people and so forth. Surely that was the best argument for the directive in the first place, although I cannot pretend that the remuneration for the majority who qualify is anything but small. The British Art Market Federation has understandably argued that with works of art selling for between €1,000 and €3,000 the cost of administering the resale right is so disproportionately hefty it outweighs the benefit to the artist. However, it cannot be stated strongly enough that the majority of artists make very little money from their work, even those who are comparatively well known: for those on an income below the minimum wage—which is often the case—even the small sums that come from resale rights are welcome. Another point worth making, and to me one of the strongest cases for resale rights, is the fact that artists frequently produce their best work when young and selling for low prices. However, they derive no benefit when this period of their work becomes sought after and is resold for ever higher sums. The new regulations will at least do something to address this problem. Another important and little publicised benefit is that artists are now allowed to find out exactly how much their works have resold for—something that has often been a bone of contention—and to have recourse to the courts if this information is withheld. This will create greater transparency and greater trust between artist and dealer. While it is difficult at this stage to calculate the number of works of art that will be eligible for the resale rights, it is interesting to note that in 2003–04, only 1,758 relevant sales on the Arts Sale Index would have been for living artists, with another 7,696 for deceased artists. The Arts Sale Index is made up of sales of art in the UK auction houses and is generally estimated to account for half the sales, with those by dealers making up the other half. This would have involved £1.8 million of royalties payable to living artists—£1.1 million to British ones. If the right were applied to heirs of deceased artists as well—which is due to happen in the UK in 2010—then £11.4 million of royalties would be due. One strength of the way the royalty system has been set up is that the seller and the agent—dealer or auction house—of a resold work of art costing more than €1,000 are jointly responsible for ensuring that the resale rights are paid. On a negative note—and here I entirely agree with the noble Lord, Lord Brooke—the Government have been shamefully slow in arriving at the package that is being set before us this evening, in spite of being fully aware of it since September 2001. I have enormous sympathy with the art dealers who are expected to cope with numerous unresolved issues such as how everything will work in practice, and vague definitions they now have no chance to question, while artists have high expectations of quick payment. Finally, as someone who makes video work, I draw attention to a deficiency in the definition of a work of art under the regulation, which refers only to ““graphic or plastic art””, omitting the increasingly popular area of computer-based pieces such as video, installation, sound and web-based art. This means that the predominantly video-based works of well-known artists such as Gillian Wearing, Douglas Gordon and Jane and Louise Wilson is not technically covered by the new regulation. I am sure that is not intentional, so I ask the Minister to review and remedy that at the earliest possible stage. Speaking to DACS—the Designer and Artists Copyright Society—I understand that the wording of a work of art is likely to have originated from the definition in Part 1, Chapter 1, No. 4, of the Copyright, Designs and Patents Act 1988, which mentions the category of film, but not as a work of art, and which similarly needs to be updated. With all my reservations, I wish these regulations success, and really hope that a number of struggling artists get real benefit from them. Therefore, I am unable to support the amendment proposed by the noble Lord, Lord Brooke.