Brexit: “We have chosen the way of Hogarth over Turner”

Bendor Grosvenor says Britain leaving the European Union could be costly for the arts and art market

Brexit changes everything: our politics, economics, even our national psyche. In art historical terms, we have chosen the way of Hogarth over Turner. And, yes, our art will probably be different, too—or at least the way we organise it, display it and, of course, sell it.

Primarily (and I’m sorry to be so utilitarian) it all comes down to money. It seems reasonable to assume, given the precipitous falls in the pound and world stock markets, that a period of economic uncertainty or contraction lies ahead. It will take years of hesitancy to extract ourselves from the European Union (EU). Tax receipts are likely to fall, and consequently arts institutions will come under funding pressure. It also seems likely, with the opposition Labour Party in some disarray, that a Brexiteer Conservative will become our next prime minister. Boris Johnson’s only previous experience of a ministerial brief was as shadow arts minister in 2004, and it was not a success (I worked for his successor).

The chancellor of the exchequer, George Osborne (who warned against Brexit), might not have been popular among the culturati but he did genuinely value the arts and, especially in the latest spending round, went out of his way to protect funding for our national institutions. All those old conversations we used to have about arts funding (“instrumental” versus “intrinsic”) will disappear—quaint reminders of indulgent times past.

Will arts funding be seen as a priority in such a government (presumably quite a right-wing or free market one)? Probably not, given the many other priorities, both economic and diplomatic, that lie ahead as we grope our way towards our newly found “freedom”. The arts will just have to get on with it. Perhaps a period out of the spotlight will be a good thing, with increased autonomy the consolation prize for decreased funding. Will free museum entry survive? Some institutions might be tempted to introduce charges for overseas visitors—currently prohibited by EU law. On the silver-lining principle, the weaker pound may provide some short-term comfort. The UK might become cheaper for tourists, providing opportunities for museums and galleries to increase visitor numbers and fundraise. Any EU funding will obviously disappear; remember, they’re going to spend that mythical £350m a week on the health service.

The weaker pound will also impact the UK’s art market. At first, art on sale in the UK will be cheaper for overseas buyers. The next few auctions might be surprisingly successful. Art dealers with stock may feel comforted by the effective rise in their asset values; art is a good hedge and can be sold easily around the world in different currencies. In the longer term, higher costs for buying works abroad will, of course, even things out. And consignors from other countries may be wary of sending their work to London for sale, only to be paid in pounds that don’t go so far.

Some dealers may hope for the abolition of the Artist’s Resale Right (ARR) and import VAT. Neither are likely, in my view—at least in the short term. The artist lobby is more vocal than the art market lobby, so ARR will probably stay. Abolishing import VAT (currently 5% on works imported from outside the EU) would certainly help the market. But post-Brexit every industry will be lobbying for concessions, and I fear art dealers will come a long way down the list. That said, dealers must lobby as hard as they can for the abolition of import VAT, for if 5% is now to be levied on works imported from the EU, the market will be severely affected—especially London's auctioneers, who rely on consignments from Europe.

The more fundamental question is what will happen to the domestic market, and to the wider, mid-range art and antiques market. In my experience, people only buy art when the world is a prosperous and stable place—and after they’ve paid off the mortgage, the school fees, and bought the second car. We’ve some way to go before we see those days again, especially if London’s pre-eminent position as a centre of global finance is threatened. In the short to medium term, I’m pessimistic. After that, who knows?

• Bendor Grosvenor is an art historian, art dealer and broadcaster