Could Brexit actually be good for the British art market? In light of cultural and artistic diversity, that seems like somewhat of an irony. And if and when – and one assumes when – the potentially cultural and economic hammer blow of Article 50 is invoked, in what way will the UK art market be affected?
There is actually no particular reason for post-Brexit Britain to be an unstable market for art; after all Sotheby’s contemporary art sale in London on the 28th June achieved £52 million with an 87% sell-through rate, and included bidders from 41 countries. No one was panicking. This is in part due to global art collectors thinking of prices in terms of dollars – and then secondarily in euros, so the decline in the value of the pound had little effect on the UK market, which eventually saw it drop to a 31 year low as the general markets were rocked by the country’s decision to leave the EU. The art market was less affected, with collectors merely translating value, investing in an area with greater stability than is currently afforded oil or gold.
So, could Brexit actually be good for the British art market? Well it turns out that it could, but like so many other erosions of rights: this could come at the artist’s expense. Due to a likely set of events, a post-Brexit London could become an even stronger auction market compared to Paris and the rest of Europe. Once the two year process of leaving the EU has passed, Britain will be free of E.U. regulations – and the possible absence of one regulation in particular will forever change the market, regressing it back to its stronger and unregulated self – this will be the potential abolition of the Artist’s Resale Rights levy (ARR).ARR was implemented in the UK in 2012, after six years of typical resistance by the British government. The regulation entitles creators of original works of art to a royalty each occasion a work is resold through an auction house or dealer for more than €1,000. ARR is levied at 4% on sales between €1,000 and €50,000, declining to 0.25% on sales at more than €500,000. Artist’s royalties cannot exceed €12,500 – but the levy continues for 70 years after the artist’s death. Or it did. That is, it probably won’t two years post Article 50.
With this potential disappearance the UK art market will no longer be disadvantaged compared to the markets of New York, Switzerland, or Hong Kong, which do not levy this particular charge. According to a 2014 report ‘The EU Directive on ARR and the British Art Market’ by Dr. Clare McAndrew of Art Economics for the BAMF, the sector that was most affected by ARR was the UK’s global art market share in post-war and contemporary art, which fell from 35% in 2008 to 15% in 2013. The disappearance of the Artist’s Resale Rights Levy could see a reversal in these dwindling fortunes – if not the fortunes of the artist.
The art trade was seen in a more positive light by artists under ARR, but this is likely to revert to the feeling of dissatisfaction with the distinct lack of regulation that the market had thrived on in the past. ARR was supposed to ‘give a substantial boost not only to thousands of artists and their heirs, but also the whole art market’ – according to Labour and Lib Dem MPs – it certainly was a boost, albeit a brief one for the artists and their heirs, but certainly not to the ‘whole art market’ – even if that market looked a little less grubby as a result.
Of course there is no guarantee that a post-Brexit government will abandon ARR – even though only one Tory MP actually voted for it in the first place, (a fact that is hardly surprising). With a host of EU directives potentially being dragged towards the post-Brexit revolutionary chopping block, ARR might just escape, but it won’t if the market has its way. If it doesn’t avoid the swing of the axe – which would be a depredation if you will; alongside austerity, isolationism, and anti-immigration: all of which are detrimental to a flourishing cultural existence – we may, ironically, have a strengthening of the UK art market, but we will also be left with the woeful devolution of artists rights.
Featured Image – Frieze Art Fair 2015, installation view. Photo: P A Black © 2016.