The Way Forward?

‘Any government, whatever its political line, should take some active steps to encourage the arts. The task of a Minister for the Arts is to help to create and preserve a framework within which the arts can flourish.’

This is the opening paragraph of the Conservative Discussion Paper (‘The Arts – the way forward’ published September 1978) which follows a Foreword by the then opposition front bench Spokesman on the Arts, Norman St John-Stevas MP

In the last two months we have been discussing measures which might be included in the new Minister’s legislative programme for the Arts over the next five years. There are two innovatory measures not yet discussed: a building cost percentage for art in public places; and tax incentives to encourage art patronage.

Building cost percentage for art

‘In Switzerland, a percentage of the construction budget for new office buildings must be set aside for the inclusion of works of art or craftsmanship in the building scheme, and the same applies in the United States to Federal buildings. This possibility could be explored in Britain’ (‘The Arts – the way forward’).

Such a law could be introduced in this country to give legal effect to a principle which some commissioners of public buildings have put into practice on a voluntary basis. There are many other precedents elsewhere in Europe and several formulae for its legal implementation here.

Tax Incentives

‘We believe that the tax system should give special incentives to individuals and companies to support the arts and other charitable causes’.

‘Fiscal changes should be made to increase private support for the arts and these are probably best done within the general law on charities. We suggest that company law should be changed to enable all companies to make contributions to charity. Such donations should be (within limits) deductible for corporation tax purposes. Gifts by individuals made out of their income to charities should be tax deductible. Here again there would clearly have to be limits and we support the suggestion that limits should be £500 or 10 per cent of net taxable income whichever is less. Such a change would greatly increase the number of supporters of the arts from moderate income brackets. A further change which would be beneficial to the arts would be to reduce the minimum period of duration for deeds of covenant in favour of charities from 7 to 3 years to qualify for income tax relief’. (‘The Arts – the way forward’)

These helpful Suggestions limit themselves to gifts and covenants only in favour of charities. Many arts and artist’s organisations are not allowed charitable status according to our law; if charity law were reformed so as to include such organisations then such innovation would undoubtedly provide a substantial measure of state patronage. (The issue of charity law reform in relation to the arts was discussed in Art Monthly No. 26).

Consideration should, therefore, be given to the introduction of measures to allow tax deductions for gifts and covenants to such organisations, charitable or not, simply because they promote or support the arts. Individual artists cannot be charities and cannot, therefore, be helped by tax incentives within charity law. Artists could, however, benefit from the encouragement of private collectors who could be given tax relief for purchases of artworks intended for loan or exhibition in public places.

The EEC has no common cultural policy. It will not, therefore, issue directives to member states ordering their Ministers to introduce laws relating to culture, preferring to leave questions of European culture to the Council of Europe which has 23 member states.

However, the EEC supports the elevation of cultural workers within the community on social, fiscal, legislative and economic levels; and seeks to achieve this by applying the Treaty of Rome to all member states with a view to harmonising the laws governing cultural workers e.g. freedom of movement and of expression, VAT, resale royalties and copyright laws. The Government of any member state which is at odds with the rest of Europe on cultural matters is likely to receive considerable pressure from the EEC and from the Council of Europe to bring its laws into line with the rest of Europe, during the next few years.

It is important, therefore, to relate our two legislative shopping lists to the rest of Europe.


Income Tax
Ireland abolished income tax for artists in 1969. France and Italy treat artists as practising a ‘liberal profession’, like doctors, lawyers and architects, who pay tax on their ‘non-commercial profits’, i.e. the difference between their non-commercial income and their professional expenses. Classifying artists as members of a profession also means that they do not have to charge VAT when they sell their own work.

Social Security
The European tradition of state assistance to artists has been one of welfare measures within the category of the socially under-privileged. Recent legislation in many countries tends to treat the artist as a professional, making the relationship between state and artist no different from that with other professionals. In Italy there is a special health insurance and old-age pension scheme administered by the Ministry of Labour and Social Security funded by artists’ contributions and state subsidy. In France, artists are integrated into the general social security scheme for sickness, maternity and child benefits, and old-age pensions. Similar schemes operate in Norway and Sweden, but in both countries artists’ National Insurance contributions are much higher than those of other workers.

In view of the development and use of new technology by artists throughout Europe during the 20th century, most domestic European copyright laws are out of date and discordant with each other. The Ministers of the Council of Europe have recognised that adaptation and harmonisation of copyright laws at the European and International level is urgently needed.

Most European states achieve the advantages resulting from the granting of charitable status to organisations in this country through their tax and social security laws.


Droit Moral
Laws which protect artworks from destruction and mutilation and which safeguard the professional integrity of the artist have been introduced in most European and international level is urgently them more extensively and definitively than elsewhere. (See Art Monthly No. 27).

Droit de Suite
The resale royalty right is now established in Germany, Belgium, France, Italy, Luxembourg and Yugoslavia. Sweden rejects such a measure as an expression of capitalism. Norway does too, but in 1948 instituted a ‘collective’ form of resale royalty right by which in any public sale of Norwegian or foreign art the purchaser must pay, over and above the price of a work, a tax of 3 per cent. The money collected is paid into an artists mutual aid fund and is used to help aged artists or to provide grants for young ones.

Public Exhibition Payments
This idea was developed in Sweden during the late 1960s. The rationale is that by showing work, even with the object of selling it, the artist is performing a service to society; suitable payment should be made for that service, so as to promote art events and so that the entire population can benefit from them; furthermore, payment should be made out of public funds. Government funds were made available and a scheme was devised and established. Norway has a similar scheme related to public touring shows. France and the Netherlands have now developed the idea.

Building Cost Percentage for Art
Sweden developed this innovation during the 1930s and it involves devoting to art a percentage of expenditure on public buildings, but the scheme was never embodied in the law. Norway operates a voluntary scheme through its Cultural Council. Finland’s scheme is run by local authorities in the larger towns. Germany, France and Italy introduced schemes in 1950; the latter two countries have given them the force of law and, as a result, in Italy 2,000 million lire was spent on the incorporation of artworks into public buildings between 1960 and 1970.

The policy of commissioning artworks for incorporation into public buildings is currently being questioned and reviewed throughout Europe. France is extending its scheme to the planning of spaces and to the integration of buildings into their surroundings. In Sweden artists are now employed by local councils to involve themselves in ‘work of public utility’. In the Netherlands artists are contracted to work on public building schemes at project stage.

Tax incentives
There has been little or no development in this field in Europe. Germany has no laws but allows its tax authorities to make arrangements with taxpayers for exemptions if collections are open to the public and loaned for exhibitions. French laws do exist but do not provide sufficient tax relief to promote patronage of the arts by individuals or firms. (Only in the United States have substantial tax incentives been introduced into law).

Many of the reforms and innovations discussed here in the last three issues have been kicked around in this country for years. Governments of other European countries have tackled them in some way, largely as a result of pressure from their communities of artists. If our Government is to tackle any of them during the next five years, it is for our art community to decide what, how and when – and ‘God help the Minister.’

© Henry Lydiate 1979



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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.