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Christopher Booker's notebook

By Christopher Booker

(Filed: 06/02/2005)

EU rule will put our art market on the canvas

The European Union has abandoned the farcical pledge its leaders gave in Lisbon in 2000 that by 2010 it would have "the most competitive, dynamic, knowledge-based economy in the world". Given the European Commission's recent admission that EU regulation now imposes costs on businesses of 1,000 billion a year, it was a wise move. If the commission's president, Jose Barroso, really means to remedy this disaster, he might begin by looking at the effects of just two items of regulation.

This week a report commissioned by the European Fine Art Foundation will confirm that, as from next year, a devastating blow will be dealt to Britain's fine art market, which is valued at 4.2 billion a year, larger than those of all other EU art markets put together. The so-called droit de suite directive, put forward by France and Germany, will in effect place a tax of up to 4 per cent on all resales above 3,000 of works by living artists or those who have been dead for less than 70 years, the proceeds going to the artists or their heirs.

The UK vigorously opposed this directive, because its net effect will be to drive a huge amount of business out of Britain, which enjoys 25 per cent of the world's art market mainly to New York and Zurich where droit de suite does not apply. An independent report commissioned by the British government in 1999 estimated the potential loss of business at 750 million a year, putting at risk up to 8,000 jobs.

Supported by a paper from Victor Ginsburgh, a Belgian professor of economics, the new report confirms from detailed research that the chief beneficiaries of this law will not be living artists, many of whom opposed it, but the estates of a handful of major 20th-century painters, such as Picasso and Matisse, which could receive more than 80 per cent of the proceeds.

Britain was outvoted on the directive by countries which already apply droit de suite, in the name of creating "a level playing field". But as Anthony Browne, the chairman of the British Art Market Federation, points out "it is no good having a level playing field within the EU, when it will simply pay our clients to sell their paintings in countries outside the EU where droit de suite does not operate".

The chief concession the UK won in its five-year battle to stop the directive was that it will not have to impose the duty on the work of dead artists until 2012 (for living artists, it starts next January).

A second, even more damaging EC proposal is the notorious Reach directive (Registration, Evaluation and Authorisation of Chemicals), under which hundreds of thousands of chemical formulations will have to be tested and authorised, at astronomic expense.

I spoke last week to Tim Worstall, an Englishman living in Portugal who, with partners in Russia and America, runs a business testing and developing the miraculous properties in alloys of scandium, a very light, rare metal. A recent order for Airbus, for 2,000kg of a scandium/aluminium mix worth 40,000, might, under Reach, cost an additional 50,000 to test and authorise.

For future models of Airbus, the company is experimenting with scandium-assisted welding which could reduce the weight of an aircraft by 10 per cent. Yet for welding rods alone the regulatory costs of the different formulations could be 3 million.

Like countless other manufacturers, Mr Worstall concludes that the only consequence of Reach in its present form will be to drive business worth billions of pounds outside the EU. Is this what Mr Barroso really wants?

Education ministry needs schooling

Last month I received a despairing plea from the principal of one of Bournemouth's many language schools. Desmond Mason, of Westover College, with a 100 per cent pass rate, faced disaster because he had not been put on a list by the Department for Education and Skills allowing his foreign students to obtain extensions to their visas to continue studying. He was already having to hand back money to students so they could transfer to schools on the list. By the end of January he faced the prospect of having to close his school altogether.

What fired Mr Mason to pen an angry letter to Ruth Kelly, the Education Secretary, was that, as the Home Office confirmed last year, he had always scrupulously complied with the reporting procedures which ensure that students do not just "go missing", to become illegal immigrants. Yet three other schools in the area that had already been reported for breaching the rules were still on the list.

After ascertaining that other reputable schools all over the country had also been left off the list when the DfES took over responsibility for this system, Mr Mason contacted his MP. Sir John Butterfill obtained the mobile telephone number of the relevant junior minister and demanded an end to a bureaucratic shambles which was about to put his constituent out of business.

Last week Mr Mason heard he was back on the list. Also there, however, are the three schools earlier reported for breaching the rules exactly the kind of thing the DfES list system had been devised to stop.

Access law disables last mobile bank

Britain has lost its last mobile bank, when HSBC withdrew the service provided to a score of outlying villages in Cornwall. A significant factor in ending the service was that, to comply with new regulations under the Disability Discrimination Act, the bank would have had to provide a new vehicle and back-up facilities, at a cost of 500,000.

This was precisely the kind of problem foreseen in 1994 when the Tory Government withdrew its original proposals for such an Act, after a study showed that its cost would be 17 billion. Only when the minister, Nick Scott, was embarrassed by a high-profile campaign led by his daughter was the Bill reinstated.

As a mounting number of examples show, it is one thing to want to end "discrimination" against the disabled by making all the world wheelchair-accessible. But at what point does this turn into discrimination against other members of the public such as those Cornish villagers who now find it much harder to get to a bank, because the cost of providing wheelchair access means their service must be withdrawn altogether?

A believer reveals the true grand plan

Mark Leonard, the foreign policy director of the Centre for European Reform, one of our leading pro-EU think-tanks, deserves a prize for honesty. In a paper in the CER's current bulletin (available on the internet), describing how much more admirable the EU is in every way than the USA, he writes: "Europe's power is easy to miss. Like an `invisible hand' it operates through the shell of traditional political structures. The British House of Commons, British law courts and British civil servants are still here, but they have become agents of the European Union implementing European law. This is no accident, By creating common standards that are implemented through national institutions, Europe can take over countries without necessarily becoming a target for hostility."

I am grateful to see a keen fan of the EU making the point so much more candidly than I would dare to do myself. Eurosceptics are hoping our rather less frank Europe minister Denis MacShane will have the courage to sign up Mr Leonard as a front-man in the forthcoming debate on the EU's constitution.