I am grateful to you, Mr. Martlew, and to Mr. Speaker for selecting this subject for debate. Today’s turnout shows that the subject was well chosen. Shadow and former Ministers, and people who really care about this subject and who often speak about it, are here today. Such a well contested and attended debate is somewhat unusual in this Chamber, so I shall keep my remarks brief to ensure that everybody has the opportunity to speak.

The background to the debate is that in 2001, the European Commission introduced a resale right for artists so that they benefit when their work is resold. The measure had long been promoted by the French Government, who called it a droit de suite, and long wished for by artists, who might have received very little money from a first sale, and who saw their patrons and the people who bought their work benefit commercially from its later success and from any appreciation in its value. It was understandable and perfectly correct that artists would lobby for the measure.

Despite the artists’ good case and the fact that the resale right was originally intended to cover living and dead artists, as it does, the United Kingdom opposed directive 2001/84/EC when it was first promoted by the Commission because of the damage that it was likely to cause to the UK art market. After negotiations by Ministers—I had a certain amount to do with those when I was a Parliamentary Under-Secretary at the Department for Culture, Media and Sport, and previously, as an Opposition spokesman—the UK secured the right to derogate for a limited period. I should emphasise that the derogation applies only to the sale of the work of living artists.

It has been a success, although not unqualified. Living artists have undoubtedly benefited—some 568 benefited in the UK between February 2006 and August 2007. My hon. Friend the Member for Rhondda (Chris Bryant), who has taken a great interest in the subject and who has discussed and debated it previously in the House, reported in a debate in November 2005 estimates that some 85,000 or 90,000 artists would benefit. That has proved to be somewhat optimistic: a relatively small number of artists have benefited but, for them, it has been a success and has improved their living conditions.

To date, because, in my view, of the derogation, the UK art market has survived and prospered. It is the largest art market in Europe—it is very strong—and it is important for both artistic and commercial reasons. We do not lead in many world markets but, apart from the United States and one other entry into the field in the past year or so, we have the largest art market. That is important for us, not only commercially, but for the arts community, because it puts the focus on London and on the quality of art.

I entirely agree with the case being made by the hon. Gentleman. He will recall that the Government, despite gaining some concessions, voted against the original directive, because they saw the damage that it would do to the British art market. Does he know why the Commission is persisting with the move to extend the artists’ resale right to dead artists? That would only help American, Japanese and Swiss dealers and arts centres, and would be to the detriment not only of London, but of Europe. Should not the Commission defend Europe as a trading centre rather than introduce disincentives for people to bring their art to Europe from elsewhere in the global market?

Perhaps because I share the right hon. Gentleman’s position I am not the best person to explain the disadvantages of the scheme. However, one of the qualifications of the joys of the artists’ resale right as it was originally envisaged is that if the measure applied to dead artists, their estates and descendants would benefit. That is not improper. It is quite right that the descendants of, say, Matisse, benefit from sales of his work, but it is not exactly what was envisaged by those who originally promoted the ARR.

I agree with the hon. Gentleman on that point. However, given that collectors and consigners at the top end are very mobile and that they can have multiple consignments wherever they like, does he agree that it would be foolhardy to extend droit de suite until the EU has successfully negotiated with Switzerland and the United States, which are playing no part in the matter, and for good reason?

I agree with the hon. Gentleman, but the debate is moving considerably. The French, who originally promoted and envisaged droit de suite—hence the name—may well begin to recognise its effects on their art market, which they are keen to promote. We could see movement on that in future, and on the battle lines that heretofore have been quite well drawn. People other than the UK Government are beginning to recognise that, although the artists’ resale right is admirable in its intention, if it is extended to the past, it will create problems that its original promoters did not envisage.

I am slightly confused by the hon. Gentleman’s argument. He says that the current scheme for living artists is working well and that he would have liked more to be helped by it, but that the real problem lies with the future and passing those benefits on to heirs and successors. The argument against the original scheme, which he supported, was that it would be a huge disaster to the arts market in this country, but that has doubled in size. What is the evidence that there is a problem with the current scheme or that it will be worse in future?

The difference, as the hon. Gentleman knows only too well, is that we secured the derogation. It is right to extend that beyond 2005, perhaps to 2012. While the art market changes and settles in the next decade, the derogation ought to stay. We would be well advised to extend the derogation so that we can see what changes in the art market. Huge changes are taking place. I mentioned that we were the No. 2 art market in the world after the United States, but we are now the No. 3, because of the astronomical development of the Chinese market. However, that will not be the only new market; it is likely that Russia and India will grow, too. Art is going to be a big area for development. Everything is changing, and while that is happening it would be sensible for us to negotiate with the European Commission to extend the derogation. We cannot anticipate what will happen to the art market in the next 10 years, so let us see what happens. The derogation has worked well and has saved the art market from its original fears, so we should try to extend it. That is the case that I should like to promote.

In 2012, the present derogation will expire, and Europe must decide what we do after that. There is a simple choice. On the one hand, we could go back to the original directive, under which all works of art—except for works of decorative art—would be covered. As we originally anticipated, however, that would cause problems for our art market and art markets elsewhere, including in France. On the other hand, we could seek a further extension of the derogation for a limited or, indeed, an indefinite period. Given that we cannot anticipate the future, a limited period of, say, 10 years would be a sensible measure, because we would be able by that stage to see how the art market had shaken out. We cannot predict that that will be a simple development, but an indefinite extension is probably not well advised.

What we have here is a clash of two good arguments. Artists have a good point, and I have great sympathy with their position and that of collecting societies such as the Design and Artists Copyright Society, which collects on behalf of artists. There is much to commend their position, although many people are somewhat uncomfortable about the fact that it is artists’ families who benefit, not artists themselves. However, on the other side of the argument—the side that I definitely support—the British art market is good for the United Kingdom and for its artists, and the derogation would allow the art market’s beneficial work to continue. This is therefore an interesting debate because it is quite finely balanced; it is not that one side has a rubbish argument and the other is incontrovertibly right. The debate raises interesting questions, but, on balance, there is a strong case for extending the derogation.

Those who say that the British art market is strong do not take into account changes such as those that are happening in China, which overtook us this year, or the fact that the art market is changing enormously as capital moves over the world and the profile of new countries increases. On the other side of the argument, the benefits to artists have not been quite as great as people originally envisaged. The 85,000 to 90,000 artists mentioned by my hon. Friend the Member for Rhondda in his speech in 2005 have not benefited—the numbers have been much smaller. Since February 2006, DACS has collected £4.4 million on behalf of only 1,400 artists, although that money is very useful and very good for those artists. However, only a relatively small number of people have benefited, contrary to the EC’s original prediction that 250,000 artists might benefit. Indeed, another problem with the scale and spread of the money collected is that 80 per cent. of that collected in the UK went to fewer than 140 artists. One could therefore see this as a specialist scheme, which undoubtedly benefits a few artists, but not the whole artist community.

In that sense, the provisions are not unlike the public lending right. The public lending right is a wonderful thing, although it is underfinanced, but those who benefit from it are those who least need it, such as J. K. Rowling. She does extraordinarily well from the public lending right because her books are borrowed so much, but other, less famous authors do not do so well. My father receives a payment from the public lending right every year, and his cheque usually comes to a champion £5, which I gratefully receive and give to the Royal Society of Literature. It is not, therefore, the famous artists who need the money, and measures such as the artists’ resale right and the public lending right for books, although extremely well intentioned and important, do not necessarily benefit the people we think they will.

There are good arguments on both sides, and I look forward to listening to colleagues, but I believe that the Government are playing it about right: they are consulting on the issue, and I hope to hear from the Minister that they are likely to negotiate hard for an extension beyond 2012 and perhaps for 10 years to allow them to see how the art market develops. I am encouraged in feeling that that is the right approach by the fact that things are changing in France, which has always been the champion of droit de suite, and we might well see some sympathy and even support for our Government’s position from the French Government. That is hard to predict, but the world is changing, and we are on the right side of the argument in asking for a further derogation to see how fast and how much the situation changes.

Thank you for calling me to speak in the debate, Mr. Martlew. I congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing a debate on this important subject, which concerns many hon. Members, as can be seen from the turnout.

I have come across this issue on two separate occasions. I was Parliamentary Private Secretary to my right hon. Friend the Member for Makerfield (Mr. McCartney), whom I am happy to see here today, when he was the responsible Minister at the then Department of Trade and Industry. I was also a member of the Select Committee on Culture, Media and Sport when it considered the artists’ resale right a few years ago and produced a report that helped the Government to come to terms with the issue after earlier opposition.

My position is directly contrary to that of my hon. Friend, because I believe that we should not seek a further derogation, but build on what has already been achieved by providing some remuneration to artists and allowing that to continue after their death. The argument that we heard from the other side of the Chamber is similar to the one we heard when the measure was first introduced way back in 1997. We were told that there would be an horrendous effect on the art market, which would devastate our position as one of the world’s leading art trading centres. However, things have not happened in that way. There are, however, other factors at work in the art market that do cause a problem, and I shall return to them later.

The hon. Gentleman is absolutely right that there has been no clear evidence to date to suggest that the measure has impacted on the UK’s position as a leading arts centre. Will he not concede, however, that it is far too early to tell what effect it is having on the art market and that the art market in the UK is being distorted for several other reasons, including the high prices being paid by Russian and Indian collectors for works by impressionists and post-impressionists?

The hon. Gentleman has a background in this area and knows far more about the art market that I do. Clearly, I listen carefully to what he and others in the market say, but the evidence so far is that the impact has been minimal.

There are, however, other areas where we do have a problem. My hon. Friend mentioned the rise of China, and there are reasons why the Chinese art market has developed in the way that it has. We might also see the rise of Russia as an art market, although it is more difficult to see that at the moment because of some of the circumstances in Russia. We must be alive to the problems, but the artists’ resale right is a pimple compared with the other problems facing the market.

Is not the hon. Gentleman making the same mistake that the Treasury is making in relation to the British economy? Just because something goes well in good conditions, that does not mean that it is secure for ever. We may now be entering a period of recession, and the background to that is a shift of economic power to the far east and other economic jurisdictions. Is it wise of Britain to impose a fiscal penalty on one of its premier successful industries? That must be damaging. The hon. Gentleman will recall that the Commission assured us that other art markets would follow suit and introduce a retail levy, but they have not done so, putting us at a disadvantage unless we extend. Are the proposals wise?

Order. Interventions should be short.

The EU is still negotiating, and I do not know when, if ever, it will conclude those negotiations. However, I repeat my point that the amount of money that we are talking about is trivial compared with the overall turnover of the art market.

A few years ago I introduced a ten-minute Bill in the House with the aim of tackling the buyer’s premium, which has an interesting history. In the mid-’70s, when the economy, sadly, was in a similar position to now, both the major auction houses, Sotheby’s and Christie’s, were having some difficulties, so they introduced the buyer’s premium, which was 10 per cent. in those days. It had a significant effect on the market and obviously on their income. Progressively they have increased it, so that in some cases it is now 25 per cent.

I looked at Sotheby’s website last night. In London its buyer’s premium is 25 per cent. on prices up to £25,000. On prices above that level, up to £500,000, it is 20 per cent., and above £500,000 it is 12 per cent. The website helpfully gives an example—from New York, as the same figures apply there—of how that works in practice. On a lot sold in New York for a hammer price of $1,500,000 the buyer’s premium would total $262,500. That is an added cost to the purchaser and a staggering amount when it is added to the seller’s premium. I have not checked what that is, but usually we would expect it to be about 10 per cent., perhaps going up to 15 per cent., with a smaller percentage for more expensive items. It is ludicrous to argue in the context of those figures that a maximum of £12,500 going to an artist or their beneficiaries has a devastating effect on the market, and leads to the “We’re all doomed,” scenario that other hon. Members have presented.

The hon. Gentleman inadvertently hits the nail on the head. The auction houses would love to think that they get 10 per cent. from consignors. What happened when they put up the buyer’s fees was that the consignors’ fees came down proportionately. However, his point is a good one. He read out figures that are applicable in New York or London. That is the key point. Wherever one buys those works of art, one pays that commission. With droit de suite, one does not pay it in the United States and elsewhere.

The hon. Gentleman is right. At Sotheby’s, exactly the same figures apply in London, France, the Netherlands, Italy, New York, Switzerland, Hong Kong, Australia and Canada, although the situation is slightly different in Canada. However, my point, if the hon. Gentleman will allow me to make it, is that if the auctioneers can add such an amount of money to their costs and, because of the reach of the two main auction houses, apply the premium around the world, they have a margin that can be cut if they feel that the £12,500 that they would see as being creamed off for artists is having a serious effect on their market. It could be taken out of that premium.

As a lawyer I have tried to consider the buyer’s premium in terms of the contract, and it has always struck me that there is a real problem with it. The hon. Gentleman is right to point out that it enabled auction houses to reduce the seller’s premium, which helps them to attract business; but the seller suffers in another way, because everyone who buys knows that they are paying the buyer’s premium, and in a case such as the one I mentioned, no one will bid up to the price that they are prepared to pay. If I am prepared to pay £1.5 million for a work of art but I know that I will have to pay another £200,000 or £300,000 on top of that, I will cut what I am prepared to bid, so the seller loses anyway. That is a serious problem.

I have made the point I wanted to make. The evidence is that the scheme works: it has not damaged the market, and it will continue to work. Much of the reason it works is the efficient and effective way in which the Design and Artists Copyright Society has worked on it. It manages the scheme very effectively and fought for it through the various stages of its development that I have described, from 1997 when it first appeared in the in-tray of my right hon. Friend. The scheme works and the fundamental question for me is why artists should be treated any differently from writers and musicians; why should their heirs and successors lose when copyright extends for up to 70 years in those other cases?

I am conscious that many of the arguments have been rehearsed before, and many hon. Members want to contribute to this debate, so I shall keep my comments brief. I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing this timely debate, and I hope that the Minister will reflect on various points.

First, it is too soon to say whether droit de suite has had an adverse effect, or otherwise, on the UK art market. The UK art market has been thriving. The Minister will have seen the report in The Times this morning on the huge prices paid by international collectors for impressionist and post-impressionist works. That, I think, has artificially maintained London as a centre of the art world in the current uncertain economic climate. The key point relates to international collectors. We are not talking about the small consigner or small purchaser. What really drives the auction houses and dealers—their engine room—is the big, expensive items, which are being collected by a new group of international collectors, who are united by one thing: their mobility. They may have properties here and elsewhere, and they move around the world. Consigners recognise that.

It is less a matter of the single consignment that might attract droit de suite than of the fact that in an estate with a multiple consignment, the impact of droit de suite on several paintings might seriously affect where the executors choose to consign those works of art. We are playing with fire if we choose not to extend our opt-out in this matter at a time when the United States and Switzerland—both vibrant centres of the art market—are not prepared to join in. I would have a rather different view of droit de suite if I knew that, rather like the buyer’s premium, it was a universal levy. However, until it is, it would be foolhardy not to extend our opt-out.

This is not a question of fat-cat auctioneers, of which I was one—or rather I was a thin-cat auctioneer, associated for many years with Sotheby’s, although I have not been for six or seven years now. When we talk about the art market, we should recognise that we are talking about dealers, the hotels that put up people who come to the great auctions, and—this will be of interest to the shadow Arts Minister, my hon. Friend the Member for Wantage (Mr. Vaizey)—museums and galleries, and exhibitions, all of which piggy-back on London’s identity as an art centre. One only has to talk to the Mayor of London to realise that he wants London to remain pre-eminent as an art centre. That is not something that just happened, or will just continue. Other world centres would love to take on the role, not least Paris, as has been said. It is interesting that President Sarkozy, who is keen to re-establish Paris as a centre of the art market, is apparently having second thoughts. We can all subscribe to the romantic idea of “La Bohème” and the starving artist in the garret, but the reality is somewhat different.

It is sometimes said that Christie’s and Sotheby’s are behind what is happening, and that allegation was certainly made when the matter was originally debated, but they own companies and have auction houses in New York, so in a way they will be the last to lose. It will be the small people such as packers, porters, framers and insurers—in other words, the workers—who cannot move, who will lose when jobs go from the London and European art markets.

Indeed that is true. My right hon. Friend has been a champion of the art world in that respect for many years—he has form.

To quote some more statistics, in the first 18 months of the measure’s operation in the second largest art market in the world, only 1,104 artists benefited, of whom only 568 were British. The top 20 artists received 40 per cent. of the total collected, and the top 10 per cent. shared out 80 per cent. The idea that the money has filtered down and is saving artists from penury is far from the truth. The signatories to a letter in The Daily Telegraph last week suggesting that the artists’ resale right should be imposed immediately, for ever and a day, were headed by the excellent artist Damien Hirst. He is not exactly a starving artist by anyone’s reckoning. It is interesting that some other leading artists, such as David Hockney—I am not sure about Lucian Freud—are on record as being against droit de suite. There is by no means universal demand from the artistic community.

Who benefits from droit de suite? DACS clearly benefits. It has been driving hard to promote it; of course, that is what DACS is in the business of doing. I do not believe that the evidence suggests that droit de suite makes a material difference to struggling artists in this country. What makes a material difference to artists in this country, struggling or otherwise, is that London is still the centre of the art world, and that people from around the world come to the UK because of that. That has a huge knock-on effect, and it is incredibly important that that position be maintained.

Will the hon. Gentleman give way?

I am just concluding. We would be doing artists of every sort, as well as dealers, collectors and small auction houses, a huge disservice if we did not continue the opt-out, particularly at a time when the United States and Switzerland are not playing ball.

I congratulate my dear Friend the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing this debate, even though, for the first time in 11 years, we are on opposing sides. Like my hon. Friends the Members for Aberdeen, North (Mr. Doran) and for Rhondda (Chris Bryant), I served on the Select Committee in 2005, and I think that it was our Committee that changed the view on the issue.

I have heard Members say, “We mustn’t do this,” or “We mustn’t do that,” using exactly the same argument rehearsed in 2005. We were told that the measure would devastate the market. It has not. We are talking not about a major overhaul—it involves just under 2 per cent. of turnover—but about the rights of individual artists. That is something that the Labour party should be proud of. They are the people that we represent and should represent. I disagree, for the first time, with my hon. Friend the Member for Stoke-on-Trent, Central.

The Design and Artists Copyright Society’s management of resale rights has been a great success. DACS has collected £5.2 million in royalties since February 2006, on behalf of just over 1,500 artists. Those royalties have reached a wide range of people, including the artists whom the measure was intended to benefit: young artists and those on low incomes.

We are told that the UK art market has been in a terrible position. In 2004, the value of the market was £4.2 billion, but resale rights have had such a devastating impact that the value is now £8.5 billion. Perhaps we need another two years to check, but to say, “My goodness me, it’s really dangerous to do this” is absolute nonsense. That growth is not just due to one or two large buyers, either; it is because London is the centre of the marketplace and always will be. That has been proved categorically. I simply do not see a danger that less than 2 per cent. of the market will alter or change habits; I do not follow that argument.

The hon. Gentleman is displaying a bit of financial optimism. The world art market has enjoyed a comparative boom in the past decade, but that may come to an end. Also, the London art market might have done even better in the good years. Should we not prepare the ground for a further shift of economic power and buying ability to other countries, instead of putting further fiscal disincentives before foreign people who might want to continue coming here to buy and sell art? It is no good looking at the past; he must look ahead, rather than simply saying that, because the change was not too disastrous, everything must be all right for the future.

What I find when I travel around the world—whether to an Organisation of Petroleum Exporting Countries summit, a G8 summit or other summits—is that the people who support France, Germany and America are British solicitors and British accountants. The whole service industry supports the whole world, and the art market is one part of that. I disagree; the measure will enhance the market.

Since the law was implemented, resale royalties equate to less than 1 per cent. of the current value of the UK art market. The cap on the maximum royalty payable for each work sold ensures that the royalties do not adversely affect the behaviour of sellers and buyers. The royalties change, so that those at the top get less and those at the bottom get more. That is redistribution, which is something that the Labour party should be proud of.

Some 87 per cent. of art market professionals say that the resale right has not damaged their business. I shall cite more of the report in a minute. The implementation of the UK regulations and the management of the resale right in the UK have been held up as a model of excellence by other countries around the world. The European directive obliges the UK Government to complete the implementation of the right for artists’ heirs and beneficiaries. There is simply no evidence to suggest that buyer behaviour has been adversely affected by the introduction of the resale right during the transition period, and no evidence yet to suggest that it would be adversely affected by the implementation of stage 2 of the directive.

In work commissioned by DACS, Maven Research spoke to 335 art market professionals and 151 artists. I understand that the Antiques Trade Gazette report “The Impact of Artist Resale Rights on the Art Market in the United Kingdom”, which was supported by the British Art Market Federation, only surveyed 35 art market professionals. That is astonishing. DACS surveyed 335 art market professionals and 151 artists. What did it find? I have said that about 87 per cent. of art market professionals felt that the measure had not damaged their business. More than 60 per cent. of them said that resale rights take them less than five minutes and cost them less than £10 a quarter in administration, and 76 per cent. of them said that the purchase of artworks was unaffected by the new law. Some 39 per cent. of art market professionals feel that the impact of artists’ resale rights has been positive; 95 per cent. of artists are in favour of them, and 90 per cent feel that the law should be extended to the beneficiaries of deceased artists. Some 80 per cent of the artists who receive resale royalties are British. The report’s findings are broadly in line with the view of the UK Intellectual Property Office.

The hon. Gentleman rightly draws our attention to an important report. However, he has missed one important figure from it: 11 per cent. of the artists surveyed said that the implementation of the scheme has encouraged them to do more work.

Indeed. Well spotted.

I hope that my hon. Friendwill understand that it is important to support young artists. The measure is a way to help them grow into different artists, and who knows where that will lead? I hope that we can persuade the Minister that 2010 is enough and that we do not need to change the date to 2012.

I have, on occasion, disagreed with my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher), but I have never disagreed with him quite as strongly as I do today. What I find most depressing about the contributions to the debate—not those of the two colleagues who served with me on the Select Committee on Culture, Media and Sport when we did our report on the art market, but those of other Members—is that the arguments are precisely those that we heard before.

I remember Anthony Browne, the chairman of the British Art Market Federation, telling the Select Committee that Cork street was going to die. He said in the Financial Times:

“In effect we’re going to hand a large part of the London market to New York on a plate. This is the single biggest threat to the competitiveness of the UK’s international art market.”

The Antiques Trade Gazette wrote:

“The introduction of Droit de Suite in the UK could result in the loss of up to ten art dealing jobs for every artist who would benefit from the tax.”

So far, 1,500 artists have benefited, so 150,000 people working in the art market have apparently gone—completely and utterly disappeared—in the past two years.

That is silly.

My hon. Friend may think that that argument is silly, but my point is that those who campaigned against the introduction of any artists’ resale right in this country said that, for every artist who gained, 10 people would lose their jobs in the British art market.

The hon. Gentleman opposite, whose constituency I cannot remember—the hon. Member for Sotheby’s. [Hon. Members: “Withdraw.”] I do not mean that in any derogatory way; that is merely how I often think of the hon. Member for East Devon (Mr. Swire), because of his previous job. He knows a great deal about the British art market, but I was intrigued by the fact that he said that the British art market consists not just of auction houses but of museums, galleries, hotels and all the people who work in the industry. The only people that he left out were the artists, whom he did not mention at all as part of the British art market, yet one of the reasons why the British art market and the auction houses and galleries in London are doing phenomenally well is that Britain has an extremely vibrant group of artists at the moment. France’s art market is finding it very difficult to take off—or to regain the position that it once had—partly because it lacks that artistic vibrancy.

As several hon. Members have mentioned, since the introduction of artists’ resale rights, there has not been a collapse of the British art market, but, if anything, a resurgence. I do not attribute that directly to the introduction of artists’ resale rights, as my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) was half suggesting, but it cannot be argued, as it was three years ago, that the British art market will suddenly become less competitive as a result and lose out to other markets around the world. Indeed, as we have seen, the market has grown from £4.2 billion to £8.5 billion.

Another argument used three years ago was that it would be impossible to administer the rights and almost impossible to find all the artists and to ensure that money was taken from those buying the paintings and so on. In fact, out of the 1,500 artists who have benefited, there have been difficulties probably on two or three occasions—absolutely minimal difficulty. In fact, the administration has gone more smoothly certainly than that of many other parts of government, such as working tax credits or—

The Child Support Agency.

Indeed. There is perhaps an argument for asking DACS to run parts of the Treasury.

There is a serious point: those who campaigned against artists’ resale rights, arguing that it would be impossible to administer, must face the fact that it has been introduced remarkably smoothly. As my hon. Friend said, 60 per cent. of art market professionals say that it takes merely five minutes to do the paperwork for each transaction and that, per quarter, the administration costs them about £10.

The hon. Member for East Devon said that one of the problems is that those who receive the money are those who least need it, and my hon. Friend the Member for Stoke-on-Trent, Central referred to public lending rights. I must confess that I have published a few books that are available in libraries, but I gain nothing from the public lending rights.

Because nobody borrows them!

Quite probably. And neither are they available in any good bookshop.

From the inception of public lending rights, they extended to all writers who wanted to participate—one has to register to receive any money. As my hon. Friend the Member for Sittingbourne and Sheppey said, a large number of artists have benefited from resale rights—some 1,500 so far, and I am sure that there will be more—and significantly more will benefit if we stop the derogation and extend the rights to the estates of deceased artists. Only 2 per cent. of artists who have received money under the rights received more than £50,000, so those who suggest that it benefits only the Damien Hirsts and the Antony Gormleys of this world are wrong. I accept that the list of those who wrote to The Daily Telegraph was headed by some very famous names, but it included some 587 names, the vast majority of whom most ordinary people in Britain would not have heard of.

The artists’ resale right works so effectively not only because it is a progressive tax—the larger, more valuable articles do not attract the same percentage—but because there is a cap of just €12,000. Some have argued, including three years ago—the hon. Member for East Devon repeated the argument today—that people might say, for example, “If you extend the right to deceased artists, those selling Bacon paintings will take them to the USA.” I do not think that, if one is selling a work for 5 million, 10 million, 15 million or 20 million dollars or pounds, the €12,000 will make a significant difference. What does make a difference is where one believes that the best market is for an artist. For example, it is pretty unlikely that Lucien Freud works will go to the USA for sale, but many Francis Bacon paintings are already going there.

I believe that Lucien Freud’s works are going there, too. The point that I tried to make was not about individual paintings, but multiple consignments. With a multiple consignment, auction houses, for example, will already be considering what seller’s premium could be secured. They will factor in all those things, and I submit that, if someone has 20 or 30 paintings, all of which might attract the €12,000 charge, they will consider where best to sell them.

I am not so sure, although, obviously, the hon. Gentleman has a great deal more experience than I do in auction houses and the consigning of art works. However, I would have thought that someone thinking of consigning 20 or 30 artworks by the same artist at the same time—

Not the same artist.

Sorry, the hon. Gentleman is grumbling from his seat.

I was talking not necessarily about 20 or 30 Bacons, but about multiple consignments, which could consist of 20 or 30 works by different artists.

In which case, we return to the argument about how an individual chooses to sell works. I thought that the hon. Gentleman was referring to the consignment of lots of works coming from the estate of a recently deceased artist. In that case, it is very unlikely that an individual will say, “Yes, it is a good idea to sell 20 paintings by the same artist at the same time,” because that might dramatically affect the value of each painting and might not produce the best result for the individual.

In the end, the Government must face not only the rights and wrongs of artists’ resale rights, but what should happen with works by deceased artists. As Members have said, the Government have a derogation until 2010, and if they want to, they must prove to the Commission that there is good reason for extending it until 2012. I will suggest two main reasons why I think that there is no good reason to do so: first, families are often the vital guardians of the an artist’s artistic heritage. An interesting case is that of the artist William Scott, who sadly suffered from Alzheimer’s for the last eight years of his life. His family passed on to me an interesting story through the William Scott Foundation. In 1950, he created a painting that sold at the time to a collector for £60, of which William Scott received £30—the dealer took the other half. Out of William Scott’s £30, he had to pay £14 for the frame. So he received all of £16 for that artwork in 1950. Last month, that painting sold at auction for £1.1 million. William Scott is deceased, so the family do not receive anything. Some might think, “That’s fair enough. He sold it. End of story!”

Actually, however, after William Scott’s death, his family founded the William Scott Foundation, which provides a catalogue résumé of all his oil paintings, which was not likely to have been done commercially. They have also maintained an archive and, as often happens with many families, provide advice on whether works are fakes. Again, such services are nearly always provided free by families. As I said, they are providing a full authentication service for William Scott works to galleries and auction houses. They also assist students with theses and art history projects, deal with all the copyright and reproduction rights and have already established that 27 works are fake. And what do they do with all the money coming into the foundation? Every single penny goes towards Alzheimer’s research.

Those who think that, by extending the right to the families of deceased artists, we will simply help the fabulously wealthy children of successful artists could not be further from the truth. I have one other example from Wales. Incidentally, £23,000 has been paid out to Welsh artists since the rights began. I am sure that many hon. Members will know of Sir Kyffin Williams, one of Wales’ great artists, who generously gave a large number of paintings to a new gallery on Anglesey. His artwork is still significantly undervalued. I suspect that, in the next few years, it will significantly appreciate. If I could afford to buy one of his paintings, I would. He died nearly two years ago, in September 2006. Again, managing his estate is very complex. Nicholas Sinclair, who manages his estate, says that, in some cases, it is pretty much a daily job. He deals with licensing inquiries, memorial exhibitions and the fakes that have started to appear in auction houses. All that work is done on an unpaid basis.

The value of a Kyffin Williams in five years’ time will largely depend on Mr. Sinclair’s unpaid work. Those who own important paintings, or paintings by artists who are recently deceased, are likely significantly to benefit from the artists’ resale rights going to ensure that families can maintain the heritage of the individual artists. If we want a vibrant British art market—as vibrant as possible—we must ensure that the derogation is ended and that artists’ resale rights apply not only to living artists but to those who are deceased as well.

In the end, there is a moral point: those who benefit most from the great creativity and imagination of individual artists should surely be the artists themselves and the families who supported them, and whom they supported. If we cannot stand up for that in the House, I do not know what we can do of value.

I congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing the debate on artists’ resale rights. I, too, have some form: it was 10 years ago this week, on 15 July, that I first participated in a debate in the Commons on this issue with the right hon. Member for Wells (Mr. Heathcoat-Amory), who sadly has had to leave the Chamber on other business. In addition, I was the Minister of State in the Department of Trade and Industry who, for two years, had to travel around Europe, negotiating with other Governments on this subject. Whether or not my activities were successful is another matter. Such is the life of a Minister.

My visit to Vienna was somewhat more difficult than my visits to Paris, Brussels and other places in Europe. When I arrived, a coalition Government had just taken power. I do not make this point to warn against coalitions, but I had to see two Ministers on the same day: the Minister for Legal Affairs, who was on our side, and the Minister for Art, who was not. Although we had decent discussions, I left with no clue what the position of the Austrian Government would be in the Council of Ministers. I hope that my hon. Friend the Minister of State will not have that problem in his discussions in the coming weeks and months.

We must consider how to manage globalisation with regard to the art market, in the same way that we have done with the financial markets, insurance markets, and education and health services. As markets change, there is always a debate about what role Government should play to help to manage the change, so that at the end of the change resulting from globalisation, there is an effective market in the UK. The marketplace is still changing, and 10 years on, the arguments put to me when I was a Minister remain legitimate.

As the market has changed, we have benefited from a global explosion in the number of paintings coming on to the market and from the price on resale of those works of art. Let us be clear, however: no country has a guarantee for ever and a day that it will be the place in which business is done. I do not agree with my colleagues when they say, “London has always been the place, and always will be.” That is not true. As we have seen in the past decade, as our market has grown, new markets have emerged and grown from not having a single sale to being the second biggest marketplace in the world. In the next 10 years, there will be further significant changes. I want to ensure that, in the next 10-year cycle, the UK remains in as strong a position as it was 10 or 20 years ago and as it will be 10 or, I hope, 20 years from now.

Difficult decisions have to be made. At the end of the discussions, such decisions can only be made on the balance of probability; they can only be a judgment. As my hon. Friends the Members for Rhondda (Chris Bryant) and for Sittingbourne and Sheppey (Derek Wyatt) eloquently said, that does not mean that we should use globalisation as an excuse or a barrier, because it will undermine artists and artists’ rights. They are absolutely right to say that we cannot have art without artists. Nor should we have artists who sell on. Those who do well find that they can look after themselves in the marketplace, but for many artists, that is not the case. Many artists who are deceased left their work to their estate, but that work should be better handled and managed and recognised for its worth. That is all true. To do that, we have to operate in way that is consistent with the changes in the global marketplace. The argument that we heard 10 years ago remains the same today. We should all be in favour of artists’ rights; but in a globalised marketplace, wherever that artist sells, they should be protected. It should not be part of the selling mechanism that one part of the world has an advantage in the marketplace over another part of the world.

That argument was made 10 years ago about the national minimum wage. The old argument for the minimum wage was that we needed to establish a right in the marketplace so that no employer undercut another on the basis of the wages and remuneration paid to their employees. That applied to small and national markets. Before the national minimum wage was introduced, whether it was a small company or a national company, people were being unfairly undercut in the marketplace. If we have a national mechanism in which everyone is involved, there is no disadvantage. The same is true in a global sense in this international argument that we are having. It is certain that had we not had the derogations that we have had, the UK would have suffered proportionately—even in an increasing marketplace.

It has not.

My hon. Friend says it has not. What is true is that we have been able to argue our corner and maintain our share during the exponential increase in the value of the marketplace. However, my hon. Friend should acknowledge that it is also true that in new and emerging markets and traditional markets, our competitors are at an extreme advantage in the coming years because they are not going to implement any international agreed norm in terms of payments of resale rights for artists. That is the reality. Therefore, we should not be arguing against each other; we should be trying to find a way forward. Perhaps my hon. Friend the Minister will come up with one in a few minutes’ time. [Laughter.] The hon. Member for Bath (Mr. Foster) laughs. I was not attempting to undermine my hon. Friend.

The point that I am making is that the Government, over the past 10 years, have done quite well in getting us to the present position. Those who cried out from the sidelines have done nothing practical to resolve the two issues that must be resolved: one is to protect our place in the international marketplace, and the other is to do something about artists’ resale rights, for which there is a desire. We need to do both things. I think that they can only be achieved by international agreement—whether it is by amendments to the Berne convention or by some other mechanism. Perhaps that is how we should be spending our time over the next two or three years—using the time for which we are arguing with the EU to have genuine international discussions, so that we can reach a conclusion on the matter. Even if we do not come to a conclusion, we cannot keep coming back to the marketplace with the changes in globalisation and use that as the only lever to defend the rights of the British marketplace. That will not work and it cannot work.

The Chinese experience proves that. From a standing start, the Chinese now have more than 46 per cent. of parts of the international marketplace. I hope that in 2010 at the Shanghai Expo—I will be the commissioner-general for this House at that event—we ensure that British artists are prominent, as one of the examples of how the UK is an international market leader and wants to remain so. I also hope that we will open up our businesses to increasing business opportunities in markets such as China.

I know that the Minister and the Opposition spokesmen need to respond to the points made so far, so I will make a final point. I say to my hon. Friend the Minister that I hope that he continues to take the position that he does regarding the negotiations, but at the same time we need to recognise that simply asking for a derogation is not good enough anymore. We genuinely need to try to find a way of gaining an international agreement that deals with the points that all of us want to be dealt with. We want to see Britain in a strong position in the top three places in the international art market, but at the same time we want to see artists and their families, or whoever comes after them when they die, getting their due worth for the works that they have produced, because, in the end, without the artists, there is no marketplace to defend.

I am delighted to follow the right hon. Member for Makerfield (Mr. McCartney) and other hon. Members who have made very valuable contributions: the hon. Members for Aberdeen, North (Mr. Doran), for Sittingbourne and Sheppey (Derek Wyatt), for Rhondda (Chris Bryant) and for East Devon (Mr. Swire). Above all, I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher), not only on securing the debate—in a sense, that was the easy bit—but on setting it out in such a rational and calm manner, quite rightly pointing out that we were going to have a finely balanced argument. He put that case very fairly. I will argue that, yes, the argument is finely balanced, but I come down on the other side of the argument to him.

We are debating whether the UK should take up the opportunity of derogation to pass on deceased artists’ resale rights to their estates and successors from 2010 to 2012. This is a really important debate. However, what has hardly been said—only the hon. Member for Rhondda mentioned it, I believe—is that there are rules surrounding whether or not we can take up that derogation. It is worth reminding ourselves that article 8 of the directive states very clearly that member states may apply to have:

“up to two more years, if necessary to enable the economic operators in that Member State to adapt gradually to the resale right system while maintaining their economic viability”.

Those are the criteria against which we must judge whether we even have a case that we should be making. I do not believe that we have a strong enough case against those criteria, although I accept that there are counterbalancing arguments.

When we obtained the extension to the derogation, we also obtained a number of other measures, including the limit of €12,500; I think that that is the figure, but if we can get the correct figure on the record, that would help. That limit has been very significant in ensuring the success of the artists’ resale right scheme for artists who are living now. It has not put a huge burden on the art market, despite all the fears that were expressed on its introduction; we have heard them expressed by other hon. Members today, and they were also expressed in the run-up to the introduction of the scheme in 2006. There were those who said that the art market in this country would collapse as a result of what was allegedly a huge imposition on the art market. We have heard the figures; the art market has doubled from £4.2 billion in 2004 to £8.5 billion today. The capping of that limit has been crucially important to the growth of that market.

We only have to look at some of the record-breaking prices that have been reached recently to show how vibrant the art market is. Reference has already been made to the sale in June of the Lucian Freud picture for nearly £12 million at Christie’s in London. The interesting point about that particular sale is that the picture was in fact being sold by a private art collection in America, and the owner chose not to sell it in the United States but to sell it in this country instead. That shows the vibrancy of the art market here. With the works of artists such as Freud and Bacon going for such astronomical sums, it certainly seems that that €12,500 limit is hardly having a huge impact on sales. Robin Woodhead, the chief executive officer of Sotheby’s Europe, said:

“At the top end of the market the €12,500 ceiling for droit de suite [ARR] on any single work is not going to be a deciding factor. London is such an important centre and the market here is so strong, led by names like Freud, Bacon and Caro, that ultimately I do not believe it will make a difference.”

Clearly, the evidence to date suggests that, despite all the fears, the €12,500 ceiling has not made a difference.

However, the hon. Member for East Devon and other hon. Members are right to ask whether or not extending the right to another group—the inheritors of the estate of deceased artists—will make a big difference. So far, nobody has given an estimate as to what they think that figure will be and what the impact of that change will be on the market. I am certainly no expert, and if the hon. Gentleman has better information than I do, I would be interested to hear it. However, the figure that I have been given is that the likely figure that will be collected will be somewhere in the region of £18 million or £19 million. That would equate to something like 0.4 per cent. of the value of the art market, which is a very small proportion in comparison to the figures of 10, 15 or 25 per cent. that we heard earlier on. I genuinely do not see that there has been a strong enough argument to show that this change will have a huge impact on the art market.

We have already heard from the hon. Member for Sittingbourne and Sheppey about the very detailed study that was conducted by Maven Research and I will not repeat all of the figures that he has given. Suffice it to say that the vast majority of artists believe that the scheme has been beneficial to them and that its extension would also be beneficial, encouraging them to do more work, which in turn would benefit the art market. As the right hon. Member for Makerfield has said, without the artists there simply is no art market, so we should be encouraging them. Equally, the vast majority of those people who work in the art market itself have said that the current system is not burdensome—they say it is neither time-consuming in terms of bureaucracy, nor unduly costly, and they support its extension.

However, there are some matters that it is important to address. The right hon. Gentleman made the very important point that those of us who believe that the scheme should be extended without the derogation for two years must acknowledge the point made by the hon. Member for Stoke-on-Trent, Central and other hon. Members, which is that we must remember that we are operating in a global market. There is a threat from the Chinese, the Swiss and the Americans, who are not applying these sorts of additional costs, however small I might argue those additional costs are, to their art market. That is why the right hon. Gentleman is 100 per cent. right to say that one of the crucial things that the Minister must do—I, too, hope that he will do it—is to confirm continued support for what was said in 2006 at the introduction of the scheme, which is that the European Union would work to try to ensure that those elements of the Berne convention that apply are adopted globally. It is critical that we work hard to do that and to show the benefits of the artists’ resale rights worldwide.

However, I would also say that if we in this country are not prepared to carry on with the scheme that we have already agreed to, that can hardly be a very strong argument in negotiations, as we go around the world and say to people, “You should do it, but incidentally we are not prepared to do all of it ourselves.” It is important that we maintain the scheme.

It is also important that we recognise that some of the arguments against the scheme really do not stand up, for example, suggesting, as some hon. Members have done, that it is only the very rich and very successful artists who have benefited. That is simply not the case and other hon. Members have given the figures that show why it is not the case. Other hon. Members have also pointed out that the costs of the scheme are very much lower than some people have suggested.

Since it was raised by the hon. Member for East Devon, I also want to refer to the letter that appeared in The Daily Telegraph on 30 June. He said that it was a letter signed by the likes of Damien Hirst, Sir Nicholas Grimshaw and others, and that it was hardly surprising that they would say what they did in the letter. However, I am sure that he also looked, as I did, at the full list of 500 artists or members of artists’ families who were signatories to that letter. The vast majority of them are not household names. They are not making vast sums of money. I shall end by reading a brief extract from the letter:

“We are a group of British artists and artists’ families. Some artists achieve success during their lifetime; many do not achieve recognition until after their death…The Government must make the right decision in order to protect the legacy of artists and the heritage of our nation…We should be entitled to bequeath our intellectual property—the value of our life’s work—to our families. After all, musicians and writers have long been used to a royalty system which has not harmed their respective industries. The Government must implement stage two of the Artists’ Resale Right immediately.”

I agree.

There have been some excellent speeches today. Those from Government Back-Bench Members were a mixed bag, but they were fascinating nevertheless.

I congratulate the hon. Member for Stoke-on-Trent, Central (Mark Fisher) on securing the debate. He spoke in measured tones about the worthiness of the cause, and I agree entirely that artists should share in the value of future transactions involving their work. He spoke about the 568 British beneficiaries so far, and called in a measured way for an extension of the derogation to 2012, considering the effect that it might have on the art market.

The hon. Member for Aberdeen, North (Mr. Doran) was in favour of immediate implementation despite the risks, and the former shadow Secretary of State for Culture, Media and Sport, my hon. Friend the Member for East Devon (Mr. Swire)—the thin cat—made a both knowledgeable and impassioned plea that we take a realistic view of the impact on the art market.

The hon. Member for Sittingbourne and Sheppey (Derek Wyatt) made great play of defending artists. I could not help wondering if he was the same hon. Member who boasted in the not too distant past about the number of illegal music downloads he had enjoyed. To a large degree, I had to put his comments in that context.

Actually, it was not me but my children. The hon. Gentleman should put that right.

I am happy to put the record right: it was the hon. Gentleman’s family rather than him.

The hon. Member for Rhondda (Chris Bryant) spoke in favour of immediate implementation. He locked horns during interventions on him and made an important point about the maintenance of existing works of art by those who inherit them. That was a key point for all of us to take on board.

The right hon. Member for Makerfield (Mr. McCartney) rightly drew our attention to globalisation and the importance of international agreements and the international context. I could not help wondering whether he had had a direct hand in some of the formal negotiations that brought us to the present reasonable position.

Given the amount of time available, I shall briefly whiz through my points. Stage 1 of the EU regulations on artists’ resale rights was implemented in 2006. It entitles artists to a percentage of the sale price whenever original art works are resold in the British art market. The Government negotiated a delay to the full implementation until 2010, which can be extended on request until 2012.

Stage 2 would extend the resale rights to the heirs of deceased artists for up to 70 years after their death. The Government are currently deciding whether to push ahead with implementation or to apply for a further derogation. I hope that today, after so many representations, the Minister will finally reach a conclusion on the matter, because the current limbo and uncertainty are uncomfortable.

The UK, thanks to its artists, traders and entrepreneurs, is in the enviable position of being at the cutting edge of the art scene, as well as having a world-leading art market. Our painters, designers, sculptors and cartoonists contributed to an art market that was worth about £8.5 billion in 2007, as has been pointed out. It is the Government’s responsibility to ensure that no unnecessary obstacles are placed in the way of British talent, and I am not sure that we need extra bureaucratic grit thrown into the smooth-flowing machinery that is today’s successful British art market. We must nurture self-evident talent and protect and promote the free market that has given us such success.

The newly introduced resale right is certainly enabling artists and their heirs to share in the future traded value of their work, but many questions need to be asked. What will be the long and short-term impacts of the new resale rights on the UK art market? Will resale rights act as a barrier to emerging artists?

I appreciate that the decision has not yet been made, but it is worth reflecting on whether it is appropriate to extend the rights to the heirs of deceased artists. Some of those people may be non-UK residents. Indeed, some of the trusts may be based overseas and have aims that are in conflict with the UK interest. I do not express a view on those issues but simply flag them up for consideration before it is too late. I invite the Minister to explain the reasoning behind the decision that he may or may not have reached, because if the Government do not have a clear answer—[Interruption.] I am not pre-empting his taking a firm, clear view today. I hope that he will, but I am not pre-empting him.

We certainly believe that it is best if creators enjoy the value of the work that they create, not only because it is right but because it creates an incentive to develop new works of art for the enjoyment and economic benefit of the nation. The argument is that artists’ resale rights will enable creators and their heirs to share in future transfers of the value of their work. It is equally important that the law creates a level playing field for those engaged in similar pursuits—that is an age-old principle. It is worth bearing in mind that the resale right brings the copyright for visual artists into line with those for other artists such as writers and musicians. I suspect that that is welcomed on both sides of the House.

Perhaps, above all, it is essential that new regulations do not restrict UK competitiveness, so it is reassuring that the independent report commissioned by the UK Intellectual Property Office suggests that the resale right has not so far damaged UK businesses. The UK art market has been growing at a rapid pace: its £4.2 billion value in 2004 grew to £8.5 billion in 2007. I recently met with Joanna Cave, the chief executive of the Design and Artists Copyright Society, who emphasised that the royalties are capped at €12,500, thereby limiting future potential royalty costs, that the right does not apply to private sales, and that there is no evidence that phase 1 of the resale rights scheme has harmed the UK art market. However, I would point out that these are early days and that the full evidence is yet to be seen.

There remain major concerns about the implementation of phase 2. Although the resale right may enable artists to share in the future value of their work, there are concerns about the long-term impact on the competitiveness of the UK art market. Some crucial questions must be answered by the Minister today.

First, will the measure damage the prospects of new artists? Will art houses begin to avoid selling the work of unknown or emerging artists in order to avoid the added burden of paperwork, bureaucracy and expense? The IPO indicates that 80 per cent. of all payments were distributed among the top 100 artists, which seems to imply that, at present, it is protecting the most popular artists rather than specifically helping and encouraging new talent.

Secondly, what is the short-term impact? Extending the resale rights of deceased artists will account for a much larger share of market sales.

I have been listening carefully to the hon. Gentleman. He seems to be saying yes and no at the same time. Is he in favour of the artists’ resale right? Does he or does he not believe that there should be a derogation?

I thought I was being fairly measured in my comments, unlike the hon. Gentleman. I am merely pointing out both sides of the argument to show that this is a difficult judgment to make, which is why I shall urge the Minister to make a decision immediately.

So no policy.

Order.

If the hon. Gentleman will stop barracking, our position is absolutely clear. The resale right may enable artists to share in the increasing value of their work, but there remain real concerns over the long-term impact on the competitiveness of the UK art market. Ill thought through European regulations could have a devastating impact on the UK economy. To ensure effective implementation in the UK, we are calling on the Government—I shall do that in a minute—to extend the derogation until 2012. That is clear, and I am glad that the hon. Gentleman had the patience to listen.

Royalties collected in 2007 accounted for 0.04 per cent. of the total value of the UK art market, whereas they would have accounted for 0.2 per cent. if they had been collected for living and deceased artists. On the one hand, the amount represents a tiny slice of the total UK art market; on the other hand, it represents a massive increase in share. In fact, it is a 500 per cent. increase—a massive jump.

Thirdly, what is the long-term impact? I received correspondence from the British Art Market Federation, which points out that the UK art market has benefited from a global art boom in the past few years but that we should consider the long-term effects if we are not in a boom situation in the future. New York has arisen very quickly.

Fourthly, we must ask what will be the effect on international UK competitiveness. The right hon. Gentleman put that point very well when discussing globalisation and the context in which we survive. In seeking the delayed implementation of the measure, the Government sought a commitment from the European Commission to introduce resale right into the international Bern convention, the idea being to ensure that UK and European art markets could compete on a level footing with others, namely in the US and Switzerland. If the UK moves ahead with stage 2 without progress on international negotiations, the UK is bound to suffer. I urge the Minister and the Government to get off their hands and get this negotiation underway and ensure that it is in place.

We must not forget that this is a retrospective introduction of a right. That is something that we should always be cautious about. I urge the Minister to seek a derogation until 2012 and I look forward to a crystal clear response this morning, because any further hesitation or delay only insults our artists and risks our international art market.

I warmly congratulate my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) on securing this debate. I am glad to have the opportunity to talk about the artists’ resale right. I acknowledge the substantial contributions made by my hon. Friend the Member for Aberdeen, North (Mr. Doran), the hon. Member for East Devon (Mr. Swire), my hon. Friends the Members for Sittingbourne and Sheppey (Derek Wyatt) and for Rhondda (Chris Bryant), my right hon. Friend the Member for Makerfield (Mr. McCartney), the hon. Member for Bath (Mr. Foster) and the official Opposition spokesman, the hon. Member for Windsor (Adam Afriyie), who seems not to have realised that last week we launched a consultation document on the artists’ resale right derogation for deceased artists. It is therefore a little premature of the hon. Gentleman to expect me to make decisions immediately.

I appreciate how important the artists’ resale right is, both to artists and to the art market. The UK has a thriving, prosperous art market of which we can be justly proud. It makes a huge contribution to our economy; it is the largest art market in Europe and one of the largest in the world. I appreciate the arguments made by right hon. and hon. Members about the art market being highly mobile.

Without the creativity of artists there would be no art market. Artists make a valuable contribution to the cultural identity of the UK. The Government want artists to be to able to benefit from their creativity. The artists’ resale right raises strong, passionately held views on both sides in the debate, as we have heard this morning. The Government must strike the right balance between the interests of artists and the interests of those selling their work.

Droit de suite has been in place for just two years in the UK. The latest figures from the Design and Artists Copyright Society show that it has collected £4.2 million on behalf of 1,444 artists. That may not sound like a great sum in overall UK economic terms, but it is important to those who receive it. Has the introduction of droit de suite damaged the UK art market? The short answer, at least so far, is no. Since the introduction of the ARR, the UK art market has continued to grow. In fact, according to a recent study, it has grown more in the past two years than the art market in the United States, as a number of hon. Members have said. But we must not be complacent. Markets can change rapidly. It has been represented to us that the true impact of the artists’ resale right on the art market may be masked by the current derogation.

We must ask ourselves who is right: are we peering over a cliff edge or can we count on our relatively benign experience so far as a reliable guide? The Government are not omniscient in these matters; we are keen to listen to the different opinions out there. That is why we have launched the consultation. However, as those who read the consultation will understand, it recommends that, based on the evidence currently available, the option to seek an extension of the derogation is taken. However, the UK Intellectual Property Office is seeking views and evidence on whether that position is correct.

The consultation was launched last week. As we have heard already, the derogation was one of a number of concessions that the UK successfully fought for during negotiations on the directive, in recognition of the fact that the transition to artists’ resale rights may not be completed by 2010. Member states that were entitled to use the derogation can apply to continue to use it until 1 January 2012, which would allow more time for the art market and collecting societies to adapt to the right.

My hon. Friend the Member for Stoke-on-Trent, Central asked whether the right to derogate could be extended for a further 10 years. Our priority must be to deal with the possible extension of the derogation to 2012. As he will be aware, a longer derogation would involve reopening the EU directive. We cannot be clear that member states or Members of the European Parliament—this would be a matter for co-decision—if given the chance, would not want to change other aspects of the right, such as the current limit on the cap, increasing the rate, and so on. My hon. Friend and those in the art market will want to reflect carefully before pressing us for a further derogation. At present, we need to focus on whether it is right for the derogation to be extended to 1 January 2012. Clearly, there are differing views on this matter, as we have heard this morning. I heard what my hon. Friends the Members for Rhondda and for Sittingbourne and Sheppey said in their powerful speeches.

Hon. Members also mentioned the important issue of the international context of the decisions that we are taking. I take on board the points made by my right hon. Friend the Member for Makerfield and the hon. Member for Bath. As I said, the UK’s art market is the largest in Europe, so we need to consider the international position. The main competitors to the UK art market are, as we have heard, not other EU member states, but the United States, Switzerland and China, none of which has introduced an artists’ resale right. It has been argued that the application of the right could mean a seller of a deceased artist’s work moving the sale out of the UK to avoid the artists’ resale right payment. The hon. Member for East Devon made that point clearly in respect of collections. We want to hear more evidence on that.

I take the point about the need for international agreement and those aspects of the Bern convention that are appropriate in this regard. Surely, it is right that globally we look to have a level playing field, and I can confirm that the Government want to pursue that. Other countries are showing an interest in the artists’ resale right. Both Australia and New Zealand are considering introducing resale rights. That is positive news, but the major countries where art dealing takes place need to be part of an international agreement.

We also need to consider the effect that the introduction of the right for deceased artists will have on the administration of payments. That has not been discussed quite so much this morning, but it is important. I pay tribute to the work done by the collecting societies. That was acknowledged by my hon. Friends the Members for Stoke-on-Trent, Central and for Rhondda. The burden of administering the right falls on the art market. I do not accept that it is particularly burdensome to administer, but we always want to consider potential burdens on business.

I welcome this debate, which will help to inform the debate launched by the consultation document. I thank right hon. and hon. Members for their interest in the issue and encourage them to make representations during the consultation phase, which ends on 22 September.