Brexit represents an opportunity to strengthen Britain’s position in the global art market

Brexit represents an opportunity to strengthen Britain’s position in the global art market

The art market is a good example of how British excellence can compete successfully in the global economy. The UK is the second largest art market in the world. It handled imports up to the value of £4.1 billion and exports worth up to £6 billion in each of the last three years, accounting for two thirds of all art and antiques traded across the EU as a whole.

Earlier this month, the organisation that I chair, the British Art Market Federation, released a study which reveals the scale of the contribution our sector makes to the economy. It shows that our 7,850 businesses support 41,700 knowledge-based jobs, and an additional 94,710 jobs by spending £3.3 billion in ancillary services such as shipping and insurance. In 2016, it paid £1.46 billion in taxes, while attracting high-spending visitors to the country’s major art fairs and auctions.

The industry’s expertise and specialist knowledge has helped London sustain its leading position in the face of growing pressure from other international hubs such as New York and Hong Kong. However, there is no room for complacency. Although the UK held its own in the global rankings in the ten years prior to 2016, the value of art sales in Britain fell by 18% during a period in which global sales advanced by 4%.

As a market that is particularly active in global trade, we have fallen victim to EU internal market legislation aimed at creating a level playing field between EU member states, but which has not taken into account competition from outside the EU.

A good example of this is import VAT on works of art, introduced by an EU directive in the 1990s against the wishes of the British Government. This creates a ring-fence tariff on art entering the EU. It is anathema to the interests of a global entrepot market like ours, when neither the US nor the fast-growing art market hub of Hong Kong charges import taxes. The fact that this tax raises very little revenue and is expensive and complex to administer makes it even more irrelevant. From March 2019 it will be up to our own Government to decide whether or not to continue with it. Abolishing it would be a shot in the arm for the UK’s future growth in this sector.

While satisfactory trading and smooth customs arrangements with the EU are paramount, Brexit also offers a golden opportunity to strengthen Britain’s position in the global market and create an environment that allows us to attract more and higher value works of art for auction and sale. It also presents an opportunity to remove unnecessary red tape and regulation in a market like ours which is dominated by small businesses.

Brexit will undoubtedly create some uncertainties and difficulties in the short term, but these will be outweighed by the advantages that can be gained by amending or abolishing some of the EU regulations that have undermined our competitiveness.

It is vital, when the time comes, that this opportunity is exploited.

Photocredit: Financial Times