Parliamentary Report: The Market for Art

The introduction into UK law from January 2006 of the Artists' Resale Right saw a flurry of activity and media coverage early in 2005 including newspaper articles, radio programmes, letters to national newspaper editors, a Parliamentary Early Day Motion supported by a significant number of cross-party MPs, the issuing of a government public consultation document, and the launch of an inquiry into the art market by the Culture, Media and Sport Committee of the House Of Commons

 - the latter publishing its report in April 2005: The Market for Art (HC 414; available at www.parliament.the-stationery-office.co.uk/pa/cm/cmcumeds.htm). This report is remarkable in its unambiguously strong and consistent support for UK artists, which is reflected in its 18 conclusions and recommendations for the introduction of new legislation, policies and practices.

The committee's terms of reference particularly focused on 'ways of supporting and encouraging living artists and the production of new work' and in 'establishing what scope exists to promote best practice in the conduct of financial relationships between artists and art market professionals'. In effect, the committee went much further than exploring the future operation and likely impact of the European Directive (200I/84/EC) requiring all EU Member Sates to introduce the Artists' Resale Right next year. The committee received written submissions and oral evidence on a wide range of subjects 'from educating the artists of tomorrow, to the provision of studio space, to the impact of fiscal measures on art'; delivered by an array of public and private art sector experts and professionals.

Rebecca Salter and Professor Gerard Hemsworth (Goldsmiths College) spoke of their experience as artists and on the challenges facing emerging artists. Susan Jones, former artist and director of programmes at a-n Magazine, spoke of the need for greater consultation with artists for the promulgation of industry best practice. Hilary Gresty (Visual Arts and Galleries Association) and Marjorie Allthorpe-Guyton (Arts Council England) gave a public sector perspective on support mechanisms for artists and ways of promoting art and prompting the market. Anthony Browne (British Art Market Federation) and Sir Tom lighten (Society of London Art Dealers) expressed concerns that the introduction of the Artists' Resale Right would have a seriously adverse effect on the market, views that Joanna Cave (Design and Artists Copyright Society) strongly disputed. Dr Iain Roberston (Sotheby's Institute of Art) spoke of the international competitiveness of the UK art market, attributing this partly to the lack of regulation. Lord Sainsbury (Parliamentary Under-Secretary of State at the Department for Trade and Industry) referred to his department's public consultation document on the implementation of the Artists' Resale Right. Estelle Morris, Minister for the Arts, summarised government policy including encouraging art in schools and career support for artists.

The committee also visited Paris, the second largest art market in the EU, received briefings from the French office of the British Council, interviewed senior staff at the Palais de Tokyo, the Musee nationale d'art Modeme at the Pompidou Centre, the Centre National des arts plastiques (CNAP) and the Fonds national d'art contemporain (FNAC), and spoke with other public and private sector experts and professionals.

The report's first recommendation is that the UK takes the important opportunity afforded by its forthcoming presidency of the EU to promote international co-operation and cultural development.

The UK Art Market
The UK has the largest art and antiques market in Europe. It is second only to the USA in the world with a 25% global share; a turnover in 2002 of £4.2 billion; 9,500 art dealers and 750 auction houses; around 150,000 artists (including commercial artists and graphic designers) of which at least 45,000 are professional visual artists, of which around half are self-employed.

Artists' 'Dual Status' for National Insurance / Income Tax Benefits
ACE gave strong oral and written evidence that visual artists should be entitled to claim 'dual status', as performing artists already can. Dual status would enable visual artists to be treated as an 'employee' for National Insurance purposes, but as 'self-employed' for Income Tax purposes. In this way, they would receive full state benefits during periods of 'unemployment', and also enjoy the benefits of Schedule D self-employed tax status in relation to earned income and expenditure. ACE argued for recognition by the state welfare system of 'artist' as a professional category; and for better understanding of the (patchy) pattern of an artist's working life.

Artist-Gallery Contractual Relationships
Rebecca Salter gave written evidence identifying key problems in the relationship between artists and galleries, particularly where works are consigned to a gallery for sale, for example: artists have no right to inspect the gallery's books or records, and cannot therefore check on the sale of works, to whom and for what price. This results in artists 'not being informed about sold work; consigned work being rented out or re-consigned without the artist's knowledge; artists' works being seized by bailiffs when galleries go out of business and consigned works being lost. Without signed paperwork, such as a client invoice, the artist has difficulty in proving the ownership of work, and in being paid in a timely and appropriate manner'.

The Society of London Art Dealers also gave written evidence: describing how 'responsible art market professionals already operate'; arguing that draft model agreements, or a code of conduct, would not be as effective as the production of a 'checklist of the points which dealers should keep in mind in drawing up agreements'; and asking for less regulation. During the committee's oral public hearings, questions asked by committee members indicated the nature and extent of their concerns. For example, Sir Tom Lighten was asked 'Tell me, presumably you did not get to be a knight of the realm for not showing invoices to artists?' and 'Can you tell me a bit about galleries that do not show (invoices to artists). Is the practice widespread? How does it occur? Is it that artists are so desperate that they will accept any practice if the gallery will help them?' To which his reply included '... there are obvious reasons that you would not show the sales invoice for client confidentiality - it has the name and address of the client - but I think there is much greater transparency ... I am totally in favour of as much as possible being put into writing. Certainly that is the practice we follow.' The committee's second recommendation is that the DCMS should actively pursue the development of best practice guidelines for the art market. The committee also considered that auction houses represent an important sector of the art market in the UK. However, some of the relevant legislation dates back to 1845, so a review is overdue.

Codes of practice regulating artist-dealer relationships were considered by the committee as the 'best way forward', and strongly endorsed elements of the Own Art loan scheme operated by ACE and the Scottish Arts Council, through which 'a fair commission is paid to artists, and paid promptly once a loan is agreed and the sale processed. Furthermore, the galleries and outlets should have a direct relationship, and contract of sale, with the artist. One of the criteria ACE uses for assessing galleries is that, when agreeing to exhibit an artist's work, they must produce a written agency agreement signed by the gallery and artist.'

Accordingly, the committee's third recommendation is that ACE should promote the widespread adoption by galleries, and other outlets, of practices modelled on the Own Art scheme rules, or on alternatives offering similar protection for both artist and the art market professional. 'A codified and transparent system of best practice' would in the committee's view be supported by 'the overwhelming majority of artists and art market outlets alike', which led to its fourth recommendation: that the government should establish a forum of interested individuals, including artists, dealers and auction houses, to work towards identifying key areas of agreed best practice in contractual relationships between artists and art market professionals. Compliance with the code of practice that emerges should then be a pre-requisite for the receipt of public funds.

Professional Practice Training and Support
Business skills and professional development information should be given to 'new artists', according to the committee, and should be disseminated in an accessible and convenient way - similar to the online service currently provided by Artquest. The committee's fifth recommendation concerns the further development of an online portal offering business advice to artists, supporting network opportunities, and providing access to the arts more generally.

The Public Sector
Several important recommendations or strong views were given for improving the role of the publicly funded arts sector in supporting artists and the art market, including:

  • an extension of the Gift Aid arrangements, so that donations of significant art works to public collections can be offset against income tax
  • urging the government to build on Creative Partnerships and actively to encourage the provision of artists' space in extended schools
  • strongly supporting the four (national) Arts Councils having continued status as distributors of National Lottery funds
  • the DCMS must view the active promotion and sponsorship of the arts as one of its primary roles. This is particularly important in view of the large number of government departments with some claim to responsibility for different locations in the world of art. Regrettably, in government, the DCMS seldom punches, if it punches at all, at a weight commensurate with the centrality of the arts to our national life.

With a final flourish the committee described the visual arts as a paradigm for 'much of the creativity that drives modern society, and enables it to thrive'. The committee's final recommendation reflected this strong view, that it is time for the government to commit itself to a flourishing arts scene. And nowhere will such a commitment be more visible than in the visual arts.

Never has such a comprehensive and incisive review of the situation of the contemporary visual artist and the art market in the UK been undertaken by Parliament; nor have such specific, measurable, achievable and realistic recommendations and views been so strongly and clearly expressed - and wholly supported by directly relevant evidence from wide ranging experts in the field. Furthermore, the committee's inquiry and the report was conducted by a group of cross-party politicians none of whose interests in the issues was driven by their own agenda, but by the public interest. Despite publication a month before May's General Election, the report's validity and force as an official parliamentary report can and should carry great weight with government as a whole; Tessa Jowell, the Secretary of State at the DCMS, and her new ministerial team in particular; the four national Arts Councils and the publicly funded visual arts sector; private art market professionals and artists and their supporters.

Next month's column will explore the committee's other recommendations relating to the implementation of the Artists' Resale Right.

© Henry Lydiate 2005

This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material.
The article is for information only, and not for the purpose of providing legal advice.
Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.