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Earl Howe: My Lords, I note carefully the suggestion of the noble Lord. It is one that we shall consider in preparing our response to your Lordships.

Lord Marsh: My Lords, does not the Minister agree that there are two distinct issues in this Question: one is the merits of privatising the selection of the Civil Service, with which some of us may well have sympathy; the other, which some of us see as far more

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important, is that no temporary government should have the right unilaterally to interfere with the selection of the Civil Service?

Earl Howe: My Lords, the noble Lord will recall from the debate that selection for the Civil Service will remain with the Civil Service Commissioners. That was one of the central points that I stressed in the debate. The Government's proposals for RAS do not have any bearing on the noble Lord's anxieties.

Lord Harris of Greenwich: My Lords, is the noble Earl aware that it would be slightly surprising were we to appoint a Select Committee of this House to consider this issue without receiving an undertaking from the noble Earl that the Government will not announce their final decision on the matter until the committee has made its recommendation to the House?

Earl Howe: My Lords, as I said to the noble Lord, Lord Richard, I note the anxiety expressed on that score. Clearly it is one that we shall need to bear in mind.

Lord Molloy: My Lords, whatever changes may be considered within the structure of the Civil Service, can the Minister say that, before they are finalised, all staff associations involved will be consulted?

Earl Howe: My Lords, the staff of RAS and the staff associations are being kept fully informed of progress as we go along.

Lord Allen of Abbeydale: My Lords, when is the report of the Liaison Committee likely to be considered by this House?

Earl Howe: My Lords, unfortunately I am not in a position to say. We hope that the Select Committee will be established very soon. I understand that, if it is, its terms of reference are likely to be approved tomorrow. Its membership should then follow on from that in a week or two. It will be for members of the committee to decide what their programme of work should be.

Lord Campbell of Alloway: My Lords, does the Minister accept that it is understood that he may be inhibited from giving any formal undertaking, but that, pending the report of the Select Committee, it would be desirable that there should be a moratorium? It would be inconsistent with the setting up of such a committee that any further positive action should be taken.

Earl Howe: My Lords, I am grateful to my noble friend. I can only repeat to him that this is clearly a concern which we shall need to take fully into account.

Lord Bancroft: My Lords, simply for the avoidance of doubt and as a superfluous postscript to the many questions that have been asked on this subject, perhaps I may ask the noble Earl whether, in addition to postponing action until after the Select Committee has

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made its interim report, any action will be postponed until after this House has had an opportunity to debate that report.

Earl Howe: My Lords, a further debate on the future of RAS is a matter for the usual channels, but I note the noble Lord's suggestion.

Lord Hayhoe: My Lords, is my noble friend aware that those of us who know the Civil Service well--I had some responsibility for it both as a Minister in the Civil Service Department and in the Treasury--and who were very concerned when they first learnt of this privatisation proposal would welcome the careful consideration which a Select Committee would give to it? Certainly, speaking for myself, I hope that at the end of the day this proposal will be dropped.

Earl Howe: My Lords, I am only too well aware that on 8th March I was in a minority of--I shall say no more than a very small minority. So my noble friend's opinion does not altogether surprise me. However, I am sure that your Lordships will accept that the Government will give careful consideration to this matter in the light of the opinion expressed by your Lordships. We shall hope to report to the House as soon as we can.

Lord McIntosh of Haringey: My Lords, for the record, the Minister was in a minority of one on that occasion.

Noble Lords: Two.

Lord McIntosh of Haringey: My Lords, I beg the noble Earl's pardon. At whatever time the Government come back to fulfil the undertaking given by the Leader of the House on 8th March, will the Minister give an assurance that it will not be in the non-debatable form of a Written Answer or an answer to an Unstarred Question but in a form which enables the House not only to debate the matter but to express a view on it?

Earl Howe: My Lords, no decisions have been taken. I note the noble Lord's wish. Whether we have a further debate is, of course, something for the usual channels to decide.

Baroness Farrington of Ribbleton: My Lords, my noble friend Lord Molloy asked about consultation with the staff representatives but the Minister referred to information being given to them. Can he give an undertaking that there will be genuine consultation?

Earl Howe: My Lords, the Civil Service, as a customer of RAS, has been consulted all along because clearly it is the one which needs to ensure that the contract with a privatised body, should this occur, is satisfactory. However, following the Government's decision, I can reassure the noble Baroness that staff have been kept informed of progress through regular staff meetings, information bulletins and things of that kind. The acting chief executive and senior managers

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will work closely with the Cabinet Office to ensure that the sale is presented in the most favourable light possible.

Artists' Resale Rights Proposal

2.53 p.m.

Baroness Rawlings asked Her Majesty's Government:

    What action they will take at the next meeting of the Council of Culture Ministers to counteract the European Commission's proposals to harmonise the droit de suite (artists' resale rights) levy which will greatly affect public sales of works of art in Britain and Europe as a whole.

The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie): My Lords, we shall need to consider the Commission's proposal on droit de suite--that is, artists' right to share in the proceeds of the resale of their works--and intend consulting all interested parties in the United Kingdom about it. However, the Government are not persuaded that there is a case for the introduction of droit de suite into the United Kingdom.

Baroness Rawlings: My Lords, I thank my noble and learned friend for that satisfactory Answer. However, as the Minister knows, the new rules on the introduction of VAT on works of art which came into force last year are already having a damaging effect on the UK trade. This is because there is no import tax into Switzerland or the United States. Are the Government aware of the serious economic consequences of this provision?

Lord Fraser of Carmyllie: Very much so, my Lords. We are conscious that one of the consequences of introducing this provision into the United Kingdom could be the displacement of art sales from the United Kingdom to other countries where there is no such suite. I imagine that New York is likely to be the most prominent beneficiary were such a change to be introduced. The potential impact on the London art market is clearly of utmost concern and it is for that very reason that we wish to consult all interested parties in the United Kingdom.

Lord Strabolgi: My Lords, is the Minister aware that this droit de suite levy, rising from only 2 per cent., will do little to help young artists but could amount to as much as £30,000 on a major work of art and in consequence, as the noble and learned Lord said, sales of important 20th century art are likely to move from London, which is at present the centre of this art market, to New York?

Lord Fraser of Carmyllie: Yes, my Lords. My understanding is that the Commission has not yet put forward its final set of proposals before the matter goes to the Council and others for consideration. However, the idea is that there should be a sliding scale with the levy going from 2 per cent. to as much as 4 per

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cent. In some circumstances, for the cheaper works of artists, clearly that would not be a very significant addition to the income of an artist or his heirs, but it could be an extremely expensive item and it could have a serious deterrent effect on those who wish to use the London market. It would be a very serious consideration if London were to lose its pre-eminence.

Lord Pearson of Rannoch: My Lords, does my noble and learned friend agree that the result of his consultation exercise may well be a foregone conclusion in this country but that it will not do him much good when he comes to negotiate the matter in Brussels? Does he agree that with this piece of legislation, as with the common fisheries policy, the common agricultural policy, the fruit and vegetable regime and many other pieces of damaging legislation from Brussels, the Government will be up against a qualified majority vote within the terms of the treaty which was unfortunately signed and that there will not be anything they can do about it?

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