Fears over EU art levy scheme

The sale of major works by great masters of 20th-century painting will cease in London if a sales levy intended to benefit artists and their heirs is introduced, the chairman of Christie's warned last night.

Lord Hindlip was stepping up the London art market's campaign against two European Union taxes - the levy, or droit de suite, and extra VAT - which, it fears, will drive business to New York. "If these twin threats are not resolutely tackled ... London's position will be ... diminished to an unrecognisable degree," the Tory peer said as he initiated a debate on the taxes in the House of Lords.

Eleven EU states have legislation in place for a levy entitling artists or their heirs for 70 years to a share of proceeds each time works are sold. The European Commission wants to apply it at rates of 2 to 4 per cent to all resales.

So far Britain, Ireland and the Netherlands have resisted. Had the levy existed in the UK in 1996, the British Art Market Federation believes, it would have generated pounds 10m in royalties for EU artists. But perhaps not: the likelihood is that international buyers and sellers of 20th-century art would already have left for New York, where there is no levy.