Editor-At-Large: Who's cashing in on fine art? The banks, of course

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The Independent Online

The world's most expensive artwork, sold at auction last week for £65m, is by a sculptor who is considered rather unfashionable. He is certainly not ranked by critics as one of the half- dozen most important artists of the 20th century. Even more puzzling, the work is not unique, but is number two of an edition of six. Why did Giacometti's bleak stick figure of a man walking hit the jackpot?

The answer lies in the new cosy relationship between banks, billionaires and art. The global financial panic saw banks collapse, amalgamate and search for cash. Salerooms experienced a drop in profits as collectors held back – some didn't want to sell work in case it was undervalued, and many had cash-flow problems. Only the super-rich picked up bargains, as works regularly failed to make their reserve, and some dealers struggled to buy them back and prop up the market value of the artists they represent.

This record-breaking Giacometti was sold by a bank (Dresdner) which had been taken over, and the new owners decided that some assets were surplus to requirements. Even so, investing in this particular piece of art in the first place means the bank made a huge profit (the estimated price was £12m-£18m) without having to do anything. Sure, the new owners of Dresdner bank say they will be using the money for cultural and education programmes, and they already lend over 100 works to museums, but the reason they sold it, whatever they say, was to get their hands on more money. The bottom line is, banks are using art as investment. Deutsche Bank owns 56,000 works of art in 48 countries – more than most national museums. Many other banks have important art collections, and employ advisers who tell them what to invest in. Banks have wealthy clients and provide the contacts and expertise they need to invest in art at this level. Basically, it's all about ego-massaging and buying status. Banks also like to have successful contemporary artists and dealers as clients (and who they can introduce to their customers), so it's a pretty incestuous little world.

Banks now sponsor exhibitions and art fairs such as the phenomenally successful Frieze. Getting involved with art is an acceptable way of placing your corporate identity in the public arena – it's not vulgar, and is culturally (and socially) acceptable. Art is good PR and a great way to network.

Whoever bought the Giacometti won't have come from a visual arts background. It will seen as the ultimate status symbol, something to give your palace the wow factor. Anyone who is willing to spend £65m on an object that's not even unique doesn't have the same moral values as you or I. That sum would feed the starving in a Third World country, provide clean drinking water for thousands of poverty-stricken farmers, immunise babies and stop unnecessary deaths. It is, quite simply, a repulsive statistic.

Damien Hirst once said, accurately, that art is worth what anyone will pay for it. And he hit the jackpot by selling work at auction just before the recession kicked in. He is still one of the most collected artists in the world, his new triptychs selling for millions of pounds to oligarchs and billionaires most of us will never have heard of.

Last week, Deutsche Bank in London announced it was planning to award staff up to 30 per cent of their salaries, in spite of the new government tax on bonuses. This payout will mean the Exchequer benefits by about £200m. Pay as a proportion of the bank's revenue has fallen from over 40 per cent to 37 per cent, but that's still a huge profit.

You could argue that these banks are giving the British economy a massive boost – but the money generated in bonus tax will just disappear into our black hole of debt. Meanwhile, the recession has seen the value of pension savings drop by £10,000 in the average UK household. Most of us are working for less, and seeing our savings shrink. That doesn't make me feel any better about the boom years returning to the international art market, or the fact that a bank has just pocketed over £50m in profit for a second-rate piece of art.

Castle Ugly: Planners are right – this monstrosity must go

Over the years I've certainly had my share of disagreements with local planning authorities. Once they told me I it was OK to build a modern house, as long as it had a red roof. Unfortunately I'd already bought blue tiles, but had secret emergency plans to paint them with stuff that would wash off. Luckily, it wasn't necessary, as I managed to get the blue roof passed on appeal. My current home caused planners even more anxiety. They insisted I retained the windows of the Victorian building I was converting, even though they were modern replacements made of plastic. So, based on my own experiences, you'd expect me to sympathise with Robert Fidler, who has been ordered to tear down the mock Tudor castle in Surrey he spent years lovingly constructing from a barn and grain silos, without permission. When it was finished in 2002, he resorted to the deluded tactic of hiding his castle behind bales of straw and tarpaulins (and, I presume, living in semi-darkness, with no view) for four years, hoping to avoid prosecution. Now the Court of Appeal has decreed his castle, complete with towers, battlements and cannons, must be demolished. Mr Fidler plans to take his case to the European Court of Human Rights, fighting for his right to live in his faux-fortress. I hope he loses, on the grounds of taste. Call me a snob, but his castle is just an over-sized semi, an assembly of such vulgarity and ugliness that if it was in my line of view I'd be incandescent. Sometimes, I have to admit, the planners are right.

Is it time to swallow our GM doubts?

This paper campaigned against GM foods, and controversy still rages about whether, given global food shortages, the benefits outweigh the risks. Supermarkets in this country do not stock GM foods, although some scientists would say that some food additives in popular foods freely on sale, like artificial sweeteners, could play a part in rise in some medical conditions, such as childhood asthma. Scientists have just developed a GM tomato that will stay fresh for 45 days, and say that this could lead to fruit and vegetables being developed that will not go mouldy quickly. Up to 40 per cent of harvested fruit ripens too quickly. Can we still afford to be sceptical about the negative aspects of GM crops?

The Army marches on its Spam

Spam, like corned beef and blancmange, is one of the childhood foods that no longer figures in my diet. Some retro dishes, such as prawn cocktail, Black Forest gateau and fish fingers, have made a comeback. At Mark Hix's new Soho restaurant the other night, my friend pronounced the Hix fish fingers "the best ever". The prawn cocktail was equally tasty. But will Spam ever grace the menu in fashionable eateries? A couple of years ago, I was in Hawaii and discovered the local diner served a Spam omelette. Two mouthfuls and I could recall those horrid childhood teas in Fulham. Pity our troops in Afghanistan. After fighting prevented fresh supplies being delivered, their chefs had to dish up Spam for six whole weeks. They got sweet-and-sour Spam, Spam fritters, Spam stroganoff, and even Spam stir fry. Bet it still tasted like Spam – nicknamed Something Posing As Meat.