The dear late Queen of the UK lasted 70 years in power, while her last Prime Minister lasted just seven weeks. Now Liz Truss has been quickly replaced by Rishi Sunak. In this time of art fairs and auctions, it’s hard to keep up with the seismic shifts in Britain’s political landscape. So here’s how it happened and what it all portends for the country’s art market.
How did we come here?
In 2019, Boris Johnson won an 80-seat majority as Prime Minister. By the summer of 2022, Covid, economic troubles and scandal had turned him into a liability, and he was ousted by his MPs. A long battle for leadership left two candidates: Truss and Sunak. Truss promised tax cuts and economic support for people in difficulty; Sunak, who warned it would collapse the economy, promised tax hikes and budget cuts until the problem is solved.
Most Tory MPs voted for Sunak, but party members, who had the final say, handed the leadership position – and with it, by default, the country’s prime ministership – to Truss.
Truss rolled out a £30bn tax cut package that defied global bond markets. But after adding an £80billion government energy subsidy without showing how to repay the debt, the markets reacted unfavorably and the pound plummeted with Truss’ authority and political portfolio. This sparked another leadership battle, which ushered Sunak into power.
Since he took office, the markets and the pound have rallied. World leaders from Biden to Macron have made it clear that they prefer Sunak over Johnson or Truss. He promises stability, while they have not. The economy has little wiggle room, while major legislation could prove politically risky until things are sorted out. Add the current energy and Ukraine challenges, and relative inaction seems an attractive path.
For the art industry, Sunak seems to be a friendlier option, being a man with his own art collection, who even made an appearance at Frieze London a few weeks ago (Sunak comes from a wealthy background and his wife, Akshata Murty, is the daughter of an Indian software billionaire). In a context of broader economic turbulence, the art market will probably not be a priority, but what does it need?
Removing Barriers to Business
Some industry players are delighted that Sunak seems to recognize the economic potential of the large UK art market. Anthony Browne, President of the British Art Market Federation (BAMF), has already met Sunak: “The good thing is that he understands the art market very well and appreciates its importance. The same goes for Jeremy Hunt, whom I have known since he was Secretary of State for Culture.
Browne acknowledged the current challenges for the market, but added: “I have an optimistic view of Britain’s record in this area, but we need the right support to create the right environment.”
This environment involves tackling complex regulations to tackle money laundering and other issues, which place a heavy burden on small businesses, which make up the bulk of the UK art market.
If identifying a Brexit dividend is a priority for Sunak, he could scrap import taxes on art imposed by the EU single market to put the UK on a level playing field with New York and Hong Kong having none, Browne added.
“The latest Art Basel report showed that the UK’s share of the global art market had fallen to 17% – we had never fallen below 20% before.
“There is a connection between a vibrant global market in London and businesses across the country that brings economic benefits on a much wider basis. We will continue to encourage the government to recognize that this needs to be cultivated.
Take advantage of competitive advantages
Freya Simms, chief executive of LAPADA, the UK’s largest art dealers association, also highlighted the plight of small businesses in the art market. She believes the government needs to create an environment that attracts large foreign buyers, while helping businesses deal with the cost of living and energy crisis and calming “inflation and interest rates.” interest in roller coasters”.
Like Browne, Simms identifies taxation as a desired priority for the new prime minister. “Make British taxation competitive with its EU neighbors or, if possible, better!” Think zero-rated VAT and duty-free purchases. What makes Paris thrive while London takes a mini dip? As a Brexit voter, Rishi Sunak should seek to find the benefits of our new independent stance.
Burden of bureaucracy ’caused by a combination of Brexit and the art market’s push into the ‘high risk’ category [in relation to AML] without supporting evidence” must also be sorted.
In broader terms, Simms said the government should streamline the movement of goods between the UK and Europe – the current difficulties are a major disincentive to trade.
Sunak’s two big challenges now are controlling spending and encouraging growth. And those in the country’s art industry are hoping the new prime minister will recognize how addressing concerns in the art market would certainly boost it.
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