There is no doubt that the last two years have been turbulent in every sense of the word, but for the UK, Brexit has been a major trigger for the deteriorating situation of its art market.
With a reference date of 1 January 2021, the end of the “transition period”, the United Kingdom finally left the European Union and with it the free movement of goods. This, as could be anticipated, has led to notorious difficulties in the transport of works of art between the UK and the EU, increasing delays and making shipping and insurance logistics more difficult. Similarly, the taxation of the market has also been affected by the return to high import duties and the extensive bureaucracy that accompanies them.
The UK government has had to go to great lengths to adapt to the market’s regulatory framework over the past two years, with a particular focus on the recently updated money laundering regulations. This has not gone unnoticed by businesses, for whom it has also meant a financial investment.
Moreover, the fact that the UK has had as many as three Prime Ministers in the last year 2022 – and seven Culture Secretaries in the last six years – has not helped to resolve or at least smooth the way for market players to deal with the key post-Brexit issues of excessive paperwork, logistics and additional tariffs. According to sources in The Art Newspaper, Hugo Barclay, director of the UK’s three Affordable Art Fairs, claims that foreign attendance has fallen by 30% since the UK left the EU.
Conversely, on a more positive note, market lobbies continue to lobby on fiscal issues, notably calling for reform of import duties and taxes.
After Brexit, one of the issues that returned to the table was the historic competition between London and Paris as the dominant European capitals in the art market. For years London had led the European market, but the celebration of the Art Basel fair in Paris in its 2022 edition has brought Paris into the spotlight, challenging the leadership and place that London occupies (or did occupy?).
Following the fair, the publication of the Art Basel/UBS Global Art Market report reflects how the value of works of art and antiques imported into the UK have declined markedly, to almost half the value they were in 2019, before the Brexit ‘transitional period’. The same report confirms that the UK has dropped from second to third in the global art market hierarchy, with its total market share falling by 3%, reaching an all-time low of 17% of the global market share.
On the other hand, despite the fall in 2020, the French market has continued to rebound since 2021, bringing the market to its highest point in the last decade, with an increase of 28% in the auction market, particularly strong in France. Looking at other European markets, countries such as Germany, Spain and Italy also recorded strong growth.
On the other hand, online auction house sales and auction streaming are creating new legal loopholes following the UK’s exit from the European Union. Streaming allows an auction lot to be bought and sold simultaneously in different markets, giving rise to tax arbitrage opportunities.
From the point of view of artistic production itself and the contemporary art market, the difficulties for the free circulation of artists and cultural producers has also been affected, complicating the possibility of doing a residency, training or contract within the United Kingdom, as the issuing of a visa is now an indispensable requirement.
The best we can hope for is that, one day, the art market will join other struggling cross-border industries and activity can resume as before, within some kind of pre-Brexit agreement.