Why does it have the potential to be so damaging?
"The ideas of a tax on mobile financial transactions that did not include America or China would be economic suicide for Britain and for Europe," Mr Osborne told the Evening Standard. "The EU should be coming forward with new ideas to promote growth, not undermine it."
Fantastic, at last the message has got through! Presumably Mr Osborne is preparing a statement, even as I write, announcing a last-minute U-turn on plans to allow the potentially ruinous extension of that other EU-imposed transaction tax, the Artist's Resale Right.
Just as the City of London enjoys pre-eminence on the global financial stage, so London's art market enjoys pre-eminence on the European stage, sharing global billing alongside New York and China, neither of whom have any plans to introduce the Resale Right.
Come January 1 it won't just be living artists who benefit every time a work is resold above €1000; the estates of those from qualifying countries who have been dead for less than 70 years will also suddenly be charging four per cent on the sale price. This list of newly eligible artists will include Picasso, Matisse, Bacon, Moore, Freud, Lowry and a host of Modern British artists whose burgeoning print market could really do without this additional burden in straitened times.
At ATG, we have campaigned vigorously alongside the British Art Market Federation for years over what we see as an unfair tax that does little to benefit those for whom it was designed, while having the potential to seriously damage what is one of Britain's great commercial success stories.
Counter arguments have been made saying that the limited version of the Resale Right has done no damage to the market so far, but actually that is not correct. Since its introduction in 2006 the world boom and bust in art prices has masked any effect that the Right might have had, so it is not possible to tell the extent of its influence on sales.
Whatever came before, however, the extension to the estates of dead artists is a much more serious threat to the market.
We have rehearsed the arguments time and again, and while Whitehall have made encouraging and sympathetic sounds, when it has actually come to it, the art market is simply not seen as enough of a priority to upset the European apple cart by facing down a directive.
Compare the meagre resources available to Anthony Browne, chairman of BAMF, in fighting the rearguard action, to those of the well-funded collecting agencies with their lobbyists who champion the Resale Right and there has to be at least some acknowledgement that the deck was always stacked against the industry. It makes the victories that have been won - the derogation for six years, for instance, all the more remarkable.
If, as we fear, the extension of the Resale Right to artists' estates pushes trade abroad, and away from the EU, the only way that the Commission will have levelled the playing field across European markets (one of the directive's aims) is by reducing the UK's activity to that of the comparatively minor markets of some member states.
Let's just remind ourselves what the Resale Right is and isn't:
• It is a levy on the entire commercial transaction price for works resold after three years of the initial sale at a price of €1000 or more, which means it is not a tax on just profits. In fact, as long as the sale is above the €1000 threshold, the levy is chargeable even if the transaction is made at a loss.
• It is a levy that is charged on every subsequent sale of each relevant work, in perpetuity.
• It is not a charge related to copyright, which remains an entirely separate right.
• It is an inalienable right, which means that artists who feel it is detrimental to their market value by adding additional costs to transactions - and there are a considerable number who do - cannot refuse it.
• It is primarily aimed at less well off artists who would otherwise find making a living more difficult. However, as the threshold at which works qualify is €1000, young struggling artists whose work has not yet reached these levels of value get nothing. However, it also means that the most successful artists get the lion's share of payouts.
• It is a blight on patronage. Dealers who traditionally took a risk on new artists, buying up collections of their work and giving them a lump sum to fund future activity, now tend to take works on a commission basis only. By doing this, they act as agents for the artists, so that sales they make on their behalf are the initial sales, not resales, and so do not qualify for the Resale Right. No lump sums then, and fewer chances for new artists to make it, especially as dealers turn to other areas which do not attract the Resale Right.
A minute fraction of artists who the collecting agencies said would benefit in the UK have earned any Resale Right so far - and that's according to the collecting agencies' own figures. Yet the future of a considerable swathe of the British art market is being put at risk as a result. Dealers, faced with paying the four per cent at auction, often have to absorb another four per cent cost when they sell works on to clients as those clients do not want to pay it themselves. That's eight per cent off the margin of any deal before considering any other costs.
Barring a last-minute miracle, we are all about to be lumbered. In which case, the best advice is: prepare now.
By Ivan Macquisten
