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Government urges caution on resale right

14 July 2008Written by ATG Reporter

The Government confirmed last week that it is not currently in favour of extending the artists’ resale rights scheme from 2010 to include the heirs of artists.

When the EU directive on resale rights was adopted in the UK in 2006 the Government made use of a derogation permitting them to limit the levy to works by living artists only. This concession expires in January 2010, but there is further provision within the directive to apply to extend the derogation for two more years.

It is estimated that the adoption of the full scheme, which would pay royalties to artists’ families for 70 years after their deaths, would quadruple both the volume and value of the levies paid when works by qualifying artists are resold.

A consultation document issued by UK Intellectual Property Office sets out the arguments for and against extending the scheme but concludes that “…losing the derogation places an unnecessary risk to the economic viability of the UK art market with limited clear benefits. Maintaining the derogation for an additional two years will ensure the art market and the collecting societies are able to cope with the expansion of the resale right whilst at the same time remaining economically viable.”

Interested parties have until September 22 to respond to the consultation document which is available at www.ipo.gov.uk/consult-artist

The arguments for and against the extension of the derogation were rehearsed in the Commons secondary chamber at Westminster Hall last week.

In the spirit of these debates, which are intended to be constructive rather than confrontational, all agreed that the resale right had brought benefits to living artists. However, speakers fell largely into the same camps that they had occupied during the initial adoption of the directive.

A number of Labour MPs argued that the resale right had proved a success and suggested the growth of the UK art market indicated the levy had no damaging effect.

In urging an extension of the derogation speakers from the Conservative side argued that it was too soon to evaluate the effect of the levy and that the art market boom could have masked any adverse effects. Above all they emphasized that in a global market it was ill-advised to put up further barriers to vendors consigning works for sale in London.

Perhaps the most influential contribution came from Ian McCartney, the former Labour minister who guided the original legislation through parliament. He argued strongly for the need for caution in a global art market where China has swiftly risen from nowhere to overtake the UK in terms of market share.

“Let us be clear… no country has a guarantee for ever and a day that it will be the place in which business is done. I do not agree with my colleagues when they say, ‘London has always been the place, and always will be’,” he said.

He urged the Government to maintain its position in seeking a further derogation while urging the EU to enter into serious discussions to bring about an international agreement on rewarding artists.

He identified a double imperative: “...One is to protect our place in the international marketplace, and the other is to do something about artists’ resale rights, for which there is a desire. We need to do both things. I think that they can only be achieved by international agreement – whether it is by amendments to the Berne convention or by some other mechanism.”

By Mark Bridge

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