Art market

The UK art market: A £2.2 billion industry

Report from the British Art Market Federation shows the UK art market employs 50,000 people

A report commissioned by the British Art Market Federation (BAMF) has made accurate statistics on the value of the UK art market available for the first time. They will prove a vital weapon in Britain’s armoury to fight the European Commission’s proposals to increase VAT on imports to 5% in 1999 and introduce droit de suite at a rate of 2-4% on works of art executed in the last seventy years. According to Anthony Browne, Chairman of BAMF, the introduction of such taxes would be catastrophic; “The external threats now facing the art market are quite unprecedented,” he commented. There is no doubt such measures will drive London’s unique market overseas, principally to New York.

The Key Findings

o Total turn over of the art and antiques market in 1996 was £2.2 billion, making it second only to new York. It involves over 10,000 businesses employing nearly 40,000 people.

o Support services in the form of fairs, shippers, insurers, conservators and restorers contributed another £250 million employing 11,000 people in some 1, 700 businesses.

o The total economic impact of the UK art and antiques market runs to 12,000 businesses employing 50,000 people generating £2.5 billion of expenditure. This is larger than the UK music industry and equal to the UK book industry.

Total spending by foreign visitors who regarded the art market as an important reason for their visit amounted to £2.8 billion. The art market is second only to the theatre and more important than music or sport as a means of bringing high spending foreigners into the country.

A conservative estimate of the benefit of the market to the Treasury rests at £469 million.

A separate Department of Trade and Industry report published earlier this year showed that since the imposition of VAT at 2.5% in 1994 imports from non-European countries into the UK had declined by 40%.

o The value of sales in 1996 which would have been subject to droit de suite was £373 million. If these were to go overseas as a result of the introduction of droit de suite the total loss of earnings would be £65 million.

No accurate figures are available for the value of the European or the New York art market. The UK market is estimated at 50% of the total European market, a figure born out by the fact that 50% of export licences issued for art and antiques within Europe originate in London.

The report gave revealing information on the breakdown of the domestic market. Total turnover is split almost 50:50 between the dealers and the salerooms. With sales between auctioneers and dealers and dealers and dealers accounting for some 50% of dealers sales.

According to Henry Neville of the British Antique Dealers Association, London has far more dealers than any other city in the world, which gives it a unique position in terms of the quality of its goods and the level of specialist expertise.

Crucial to the success of the British lobby against implementation of the new taxes will be the commission’s undertaking to produce a report on the impact of VAT on the entire European Art Market before the end of 1998. The BAMF figures prove conclusively how unique taxation laws have given Britain its preeminent role in the European art market. “We are not asking for special favours,” said Anthony Browne, “but asking that directives be looked at in an international context.”

Peter Brooke, President of the British Art Market Federation and former Minister for the Arts, stressed that there was cause for optimism as a result of the growing awareness within Europe that certain industries must be seen in a global and not a European context. Proposals to ban tobacco advertising would result in the removal of Formula One racing from Europe.

“Those of us who believe in Europe also believe that its strongest features in individual countries need European enforcement and not erosion. The British art market is a classic instance, about which this report is eloquent. Erosion benefits nobody except our competitors outside Europe.”

The findings were endorsed by the Association of British Picture Restorers, just one of the support services, who stand to lose a great deal of business if the market is driven overseas. “Some practitioners may move to countries outside the EU. Others may become unemployed destroying skills and knowledge that have been passed on for more than 100 years,” it commented.

Type of business Total number Total Total Sales (£m)

of businesses employees

Dealers 9,463 22,725 1,446.9

Big four auctioneers 4 2,246 837.8

Other auctioneers 750 14,903 661.3

Net Inter-trade sales 739.4

Total art and

antiques market 10,217 39,874 2,206.6

Originally appeared in The Art Newspaper as 'A £2.2 billion industry'

Appeared in The Art Newspaper Archive, 76 December 1997