The Next Moves Forward, part 1

For the third time in eight years, I set myself the task of examining the newly-elected Government’s past achievements and future policies in relation to the visual arts.

In my reviews of 1979 and 1983 (AM 26,27,28 and 67) I drew up laundry lists of possible legislative measures and executive policies which the arts community might press on the incoming Executive. This time, since little has in fact been achieved, I give more serious consideration to the better performance of our European cultural partners.

European Cultural Policies
Other recent examinations of the re-elected Government’s ‘next moves forward’ in relation to the visual arts have ‘sought to place their observations merely in a national context; this one seeks to do so in the wider European stage: geographically sea-locked we may be, but culturally and economically cut-off we certainly are not. Accordingly, while our performance is examined later, we must first consider what we have said we believe in – in 1976 a comprehensive cultural policy was agreed by the Council of Europe (a body much larger than the EEC and including Scandinavian and other non-EEC States) through respective Ministers of State responsible for cultural affairs; the UK Government was a subscribing member and a party to the published joint policy document (see Public Aid For Creation in the Plastic Arts, The Council of Europe, 1976). What our Government has agreed with our European partners (and which has not subsequently been put into operation) is as follows. Public aid is merely one component of each State’s system for organising artistic life, which cannot be dissociated from the social system as a whole.

There is no example in history of a society which has fully transcended the contradiction between ‘freedom’ and ‘security’ for its artists. Political as well as intellectual orthodoxies constrain creativity, so that when an artist’s livelihood depends on demand (as expressed by the marketplace) the conditions for the exercise of ‘creative freedom’ may not be present. It’s an old debate, fully acknowledged by the Council of Europe: the notion of artists’ ‘freedom’ is inseparable from that of ‘ability’ to create.

As a consequence of this basic understanding, for a decade or so (many more in certain parts of Europe, particularly in Scandinavia), Governments have addressed the question of their responsibilities for the social and economic security of their artists – just as they have done towards other socio-professional groupings. The aim is the same, to support without influencing; to encourage without coercing; to subsidise without interfering. Thus, their rationale is clear: by reducing the artist’s insecurity, State support increases freedom to create – provided always that other sources of assistance continue to be available.

Ministers acknowledged that any one State’s cultural policy may not accord with ‘the expectations of the majority (given the plurality of dominant groups in most States and the conflicting values they severally uphold) which, if they held sway, would exclude support for innovative and experimental artworks and forms that were not already established as ‘popular’ concerned about imposing a ‘non-popular’ orientation and the howls of protest from the disappointed majority which might well prove politically inexpedient.

Their favoured long-term priority centred on strong policies to provide equal opportunities for all to gain an art education over and above traditional and compulsory education systems. Secondarily and additionally, they agreed policies for financing national cultural institutions, decentralising central government control, and for redressing the weaknesses recognised as inherent in artists’ own organisations or in their ability to represent makers’ needs strongly and coherently enough – largely through perennial difficulties of defining ‘artist’ or group membership, so as to justify state support. Accordingly, a multiplicity of ways of providing support for the visual arts was considered and agreed. This is the context in which the UK Government’s achievements of the past eight years will now be examined.

Studio sales of unique work (as against multiples produced with assistance from other workers which cause classification as an industrial producer) are exempted from VAT and are given other non-industrial or non-commercial tax privileges such as the deduction of professional expenditure from earnings before profits become taxable. In the Latin States, artists have a choice as to how their professional earnings are taxed. They can choose between tax deductions for professional expenditure, based on their receipts and records; or an administrative assessment of tax due, based on information of earnings alone supplied by the artist. And the VAT exemption applies to their studio sales.

In most other States, artists’ earnings are taxed as if they were industrial, but non-commercial, profits. They do not need to keep accounts. They must pay VAT on annual sales (above a basic minimum allowed) or pay a reduced rate of VAT. In the UK, there is no choice for the maker who is assessed, at the discretion of the tax authority, on accounts supplied by the artist according to records of income against expenditure (which may or may not be allowed as tax-deductible). There is no right to professional status, which would produce further, and the most advantageous, benefits derived from rolling forward annual losses so as to reduce the tax bill in subsequent years of profit, or from setting off annual losses against tax already paid in the same tax year on other earnings as an employee. There is no legal definition or even guidance to tax inspectors as to who is (or is not) a professional artist, to enable those in the arts to argue their case. These issues, over so-called ‘Schedule D’ status, have existed for years in the UK, where no Government has ever been asked by a coherent and strong body representing artists, nor has one of its own motion seriously thought, to introduce improvements along European lines by way of legislation or executive policy.

In this respect, therefore, there has been no change for eight (and more) years. Some States exempt such forms of income from taxation, broadly equating them with educational grants; elsewhere, including the UK, they are taxable. However, in 1979 the Inland Revenue approved a Scheme for exempting certain grants (again, in the tax authority’s discretion), based on criteria agreed with the Arts Council: essentially, grants used for ‘buying time’ to produce work would be taxable; the rest, not. In any event, all such income had still to be declared in artists’ annual accounts for a decision to be made.

The UK Government has neither been asked by artists to consider, nor seriously considered on its own account, innovations elsewhere in Europe. These include profit made in one year being ‘frozen’ in a bank account and only taxed for the year in which money is withdrawn; artists paying tax in the form of artworks – partly as an aid to creativity, partly to build up national modern collections; or total exemption from income tax – after State classification and approval as a ‘professional artist’. In these respects, therefore, no change.

The European shift has been from State assistance to artists as a welfare measure for a ‘socially under-privileged’ group, towards treatment of the artist as a professional with the same relationship to the State as all other professionals. Examples include: compulsory or voluntary membership of special insurance schemes offering sickness, maternity, family allowance, old-age pension and death benefits. In the UK, however, the national insurance scheme has always required those working (employed and self-employed) to make financial contributions (according to earnings or profits); and those unemployed, disabled, sick or in full-time education to register and be given credits or exemptions. Those practising as artists are included, just like all others lawfully working (except prostitutes). Ministers are dedicated to protecting artists’ rights, including moral rights (relating to work as the expression of the artist’s personality) as well as property rights (relating to the economic exploitation of the work and the artists’ pecuniary interests therein).

All European States, including the UK, subscribe to similar legislation (derived from the Berne Convention) giving the author sole control over all processes of reproduction; but not all States have in fact legislated harmoniously-dissonances are still great. The UK Government recently recognised this in its White Paper (Intellectual Property and Innovation, Cmnd. 9712,1986). Should these plans for reform come to fruition during the next five years, a vitally important right for visual artists (including photographers) will not be put into law. According to the Berne Convention, our legislation should give the maker of a work exclusive rights of reproduction; but it does not do so in the case of

  • a commissioned photograph (any subject matter)
  • a commissioned portrait painting
  • a commissioned portrait drawing
  • a commissioned print (any subject matter)

In each of these cases, the commissioner and not the maker is given exclusive rights of reproduction – unless the terms of the commissioning contract are negotiated by the artist and agreed by the commissioner, before the deal is finally struck, to give those rights to the artist. The White Paper recommends no change in this law, despite strong arguments from the Arts Council and the Royal Academy to do so they have forcefully argued that commissioned makers should not be placed in such a disadvantageous negotiating position compared with all other artists and authors, the more so, given our law’s current contravention of our international treaty obligations not to do this. This technical, but vitally important legal change, would benefit thousands of would-be commissioned artists. There is probably still time for more artists and representative groups to press for this reform, since the recent election has slowed down all new legislation. I understand the Arts Council and the Royal Academy would welcome more written support for their advocacy for change, especially since the Government’s position to date is that there is no vocal support for such change evident from artists themselves.

To be continued in the next issue.

© Henry Lydiate 1987



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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.