ON THE very day that a study by Francis Bacon, who died in 1992, sold for £17.3m ($34.4m) in Christie’s biggest contemporary-art sale, a group of British artists fired the opening salvo in what could prove a drawn-out battle. Should their heirs be entitled to royalties on such sales? Led by Damien Hirst, Britain’s most commercially successful artist, more than 500 signed a letter to the Telegraph urging the government to give them that right. “Our loved ones often sacrifice a lot to support an artist in the family,” the letter went, and it was only fair that they got a share of the profits.
For the past two years 4% of the price of a work by a living artist sold through an auction house or by a dealer has been payable to the artist. Sales of less than €1,000 (£796) are exempt, and the tax is capped for anything worth €500,000 or more. Throughout the European Union the tax is payable on sales of works by living artists or those who have died within 70 years; in Britain it is only works by living artists that qualify. The EU allowed Britain this exemption until 2012. Mr Hirst and his colleagues would like to make sure it is not extended.
The image of the penniless artist starving in his garret makes for great opera but poor commercial logic. The artist’s resale right (ARR) benefits a far smaller proportion of artists than its supporters might assume. A study sponsored by the Antiques Trade Gazette showed that, in the 18 months to August 2007, 10% of the 1,104 artists benefiting from ARR in Britain (around half of whom are British) got 80% of the pot; the bottom 30% received less than £100 each. The royalty has also proved cumbersome and costly to collect.
Most serious is the effect that the extra cost of buying and selling might have on London as an art market. Collectors and curators flock to it twice a year for the auction season. They visit dealers and meet artists they might not otherwise have come across. But people who sell art at auction in London—and there have been more and more during the current boom—are only too aware that they can sell elsewhere: in New York, for example, Geneva or Hong Kong, where the Chinese contemporary market grew by nearly 1,000% between 2003 and 2006.
Adding to the cost of buying and selling art by extending ARR will ensure that more people receive royalties, but not many more. (The lion’s share in France goes to seven families; most of them are very well off, including the Picassos and the Matisses.) It will do little for London as an art-market centre—and still less for the quality of its art.