Dealers and other members of the trade have expressed outrage and disbelief over UK Prime Minister Boris Johnson’s shock decision on Wednesday to suspend parliament for five weeks in an attempt to force through a no-deal Brexit on 31 October.
Describing the move as an “outrageous coup”, the London dealer Stuart Shave says democracy is being “held hostage” by a prime minister “who has no democratic mandate, perverse in his intent on delivering Brexit come what may”. Shave adds: “His actions will put us into economic chaos, dismantle the NHS, rip up the Good Friday Agreement and divide the country even further than his two predecessors. Boris Johnson will go down in history as the worst prime minister we have ever had.”
Others say it is hard to discern the implications for the art market, but condemn the move. “Leaver or remainer, no one should regard this grotesque sabotaging of parliamentary sovereignty and parliamentary democracy with anything other than abhorrence,” say Matt Symonds and Alice Black, the co-founders of the London gallery Alice Black.
Hugh Gibson, the director of Thomas Gibson Fine Art, says: “Absolutely nothing surprises me anymore and I have come to realise that anything can happen. What will the implications be of a hard Brexit—I cannot fathom anything good but who knows?”
The transport sector is likely to be the hardest hit in the first few months after the UK leaves the EU. Simon Sheffield, the executive chairman of art shipping firm Martin Speed says Johnson’s latest plan is “more likely to damage relationships with the EU and business”. He adds: “I don’t believe suspending parliament or the threat of suspending parliament is in the best interests of the UK.”
The move follows the leak last month of the UK government’s Operation Yellowhammer dossier, which revealed that “significant” disruption is expected at ports for up to three months in the event of a no-deal Brexit.
The reality, according Sheffield, could be much worse. “I’m very concerned about the ports, particularly the Dover/Calais route. Neither Dover nor Calais is prepared for a hard border or disorderly Brexit. Three months is optimistic; I suspect the disruption will last much longer,” he says.
The report, revealed by the Sunday Times, details the government’s no-deal “planning assumptions” and predicts that 85% of lorries crossing the channel “may not be ready” for French customs on the day of departure and, in a “reasonable worst-case scenario”, could face up to two-and-a-half days’ delay. It adds that “EU exit fatigue” due to the extension of Article 50 means that the UK is less prepared now than it was on the original leaving date of 29 March.
Brexit fatigue can be felt within the art trade. Few businesses, aside from shippers who will be at the coalface of any post-31 October fallout, have definitive contingency plans in the face of multiple uncertainties—and many are hedging their bets.
“Come 1 November, nobody really knows what will happen,” says Anthony Browne, the chairman of the British Art Market Federation (BAMF). “In the short term, a no-deal Brexit is bound to lead to some bad things that none of us have thought of and will inevitably be disruptive.” He is less worried about the long term, however, “because we are an amazingly resilient country and the UK market is unique in Europe for being global”.
For shippers, the ability to clear customs within their own bonded warehouses is a key contingency plan. London-based Gander & White opened its fourth bonded warehouse earlier this year and Martinspeed is building a new one at Heathrow airport, which will be ready “middle to end of September”, Sheffield says, adding: “We’ve also got increased capacity for European trucks if they want to spend the night or longer at one of our warehouses at Heathrow.”
Airfreight could be an option for avoiding queues at ports but, Sheffield says, while Martinspeed’s airfreight business has “increased a little bit”, the “problem with flying art to Europe is the height restriction of 1.5m, so there’s not an awful lot you can get onto an aircraft”.
The future of the temporary admission procedure (EU legislation exempting works imported temporarily for events such as fairs and exhibitions from import duties and VAT) remains a key area of concern for all. On this, Sheffield says: “We haven’t heard anything from HMRC [Her Majesty’s Revenue and Customs] at all. I don’t think they know. It’s very early days. At the moment there’s a bit of a Mexican standoff going on.”
Dirk Boll, the president of Christie’s Europe, Middle East and Africa, foresees the main post-Brexit challenges will arise from “the implications of possible changes to tax, import and export requirements, potential delays in transportation between the UK and EU, and possible exchange rate fluctuations”. But as such arrangements are yet to be brokered—and, in the case of a no-deal, may not be resolved at all—the extent of disruption is uncertain. Boll says Christie’s is “making the necessary plans and ensuring any transfer is as smooth as possible for our clients”, and has been “working closely with government and other trade bodies, including the British Art Market Federation, throughout.”
Rue Vieille du Temple, where Zwirner will open a Paris outpost in October.
On the move
There is anecdotal evidence that dealers and collectors alike are moving their art before the deadline, but no discernible trend has emerged as to where. Fred Clark, an associate at the UK law firm Boodle Hatfield, says numerous clients are worried about Brexit: “UK citizens are keen to move collections back here—there’s a real sense that people are ramping up their plans. Art logistic companies are getting swamped.” Diana Wierbicki, the head of the global art practice at Withers, says clients are “reviewing the location of their art and considering whether anything should be moved prior to 2020.” Wierbicki recommends determining “how you plan to use the art in the near future. Is there a particular home you want to keep the art displayed in? If so, consider moving it to that home prior to 2020. Are you planning to sell art soon? If so, consider moving the art now into the jurisdiction where you plan to sell it. Are you planning to keep the art stored? If so, consider whether storage in a freeport makes sense.”
Those who can afford to are moving their business operations. In July, David Zwirner announced he would open a gallery in Paris—his first in continental Europe—on 16 October. “Brexit changes the game,” Zwirner told the Financial Times. “After October, my London gallery will be a British gallery, not a European one. I am European and I would like a European gallery, too.” Meanwhile, there have been rumours that Hauser & Wirth may open a Paris gallery but a spokeswoman says: “We don’t currently have any news to share about a space in Paris.” Nevertheless, there is a feeling the city could benefit and the London- and Paris-based dealer Kamel Mennour says he has “already moved stock back [to Paris]”.
The Austrian dealer Thaddaeus Ropac opened a London gallery in 2017 in the aftermath of the Brexit vote and has been consistently optimistic. Now he is less so. The possibility of a hard Brexit has become a much bigger reality,” he says. “[Prime Minister] Boris Johnson is a populist. I think he will do what he says the majority of the British people want and he will do that at any cost.
“When David Zwirner announced opening in Paris with a comment on London no longer being part of Europe it showed how the market is adjusting, and perhaps an acknowledgment that, beyond London, things may prove to be easier in terms of the infrastructure.”
Paris is becoming a “new power player”, Ropac says: “Paris was always very important because our two galleries’ overall footprint is bigger and also our turnover in Paris is much bigger. But our London position will not change at all in terms of strategy.” He plans to move some of his private collection back to the continent but “otherwise we will limit our stocks in London a bit and just wait”.
In November, the London gallery will host a show of Valie Export, whose works will be brought to the UK before 31 October “to avoid any delays”, Ropac says. Meanwhile Lisson Gallery in London is working closely with Berlin’s Neugerriemschneider gallery on a two-part Ai Weiwei exhibition across both galleries (the Berlin show opens on 6 September, and the London one on 1 October) and Greg Hilty, the curatorial director of Lisson Gallery, says: "While I have no doubt our relationships will continue, the process around which we work could alter dramatically." He adds: "We all rely hugely on our EU counterparts and collaborate frequently with artists, galleries and museums across Europe."
Nuanced picture
Opening in France makes sense for those keen to maintain a presence in the EU—according to the economist Clare McAndrew’s Art Basel and UBS Global Art Market Report 2019, France was the centre of the global art market until the 1950s when the UK and US overtook it. Today, McAndrew calculates that France sits in fourth place for market share, behind the US (44%), the UK (21%) and China (19%)—but, hampered by red tape and punitive taxes on art sales, its share is only 6%. And the UK still accounts for 66% of the EU’s total art market.
“[France] has some strong advocates for the market but, despite their efforts, I’m not seeing signs of any new successes in improving its regulatory and business environment to encourage it to become a trading hub like London,” McAndrew says. “Brexit is being presented as an opportunity for France to step up to the plate and be the new gateway for trade between Europe and the rest of the world, but while it might gain more intra-EU business, I think it might find it even harder to compete with the UK for extra-EU trade.”
In McAndrew’s view, only the larger galleries with multinational premises, such as Zwirner’s, will “be able to engage in the best arbitrage of whatever regulations come about”, and she foresees more businesses setting up branches in Europe. But it is the small- and medium-sized operations that “rely heavily on intra-EU supply or demand that might face the biggest issues in a hard Brexit”.
The UK introducing a potentially more favourable system of regulations and taxes on extra-EU trade is not much comfort to smaller galleries and many are “very stressed over the problems they might face later in the year with customs procedures, shipping delays, costs rising etcetera. Those who can make contingency plans are doing so—moving things around early—but that’s not always a luxury available to smaller galleries”.
Freed from EU regulations, the UK could increase its competitiveness. BAMF is campaigning to revert back to the old system of 0% VAT on art imports (the UK already has the lowest art import VAT in the EU at 5%), and, on that level, France would be unable to compete for non-EU imports.
In fact, non-EU trade already makes up the bulk of the UK’s art market—according to data from HMRC, the UK exported £207.8m of art and antiques to the EU in 2018, compared with £4.9bn to non-EU countries. McAndrew says that “while European buyers and sellers are very important, they are now a much smaller portion of the international value of the market versus US and Asia.” Therefore, the British market is already well used to “international crossborder arrangements and ways to reduce their impact on the trade”.
Nevertheless, as McAndrew says, there will inevitably be “a big complicated mess while it is being worked out”. And the oft-used cliché that the art world transcends borders will be of little use on a border official at Dover on 1 November.
Dealer reactions
What do the art world’s players make of the 31 October deadline?
Greg Hilty, curatorial director of Lisson Gallery, London, New York and Shanghai
"Boris Johnson’s opposition is false: no need to ‘do or die’ in his terms, better by far to stay and thrive. His 'whatever' response to Brexit will inevitably have negative consequences on the UK arts sector...[a no-deal] could be devastating for funding, the movement of art, freedom of movement for EU nationals in the UK, touring of shows, and will no doubt lead to an increased amount of paperwork and payment for certain procedures."
Kamel Mennour, London and Paris
“Liberal democracy creates experimental ideas and dynamic arts communities; populist nationalism does not.”
James Holland-Hibbert, Hazlitt Holland-Hibbert, London
“There is a chance that a no deal could also mean further deregulation and a reduction in import tax, thus attracting more business to London. Either way, it is a crying shame that it should have ended like this.”
Stefan von Bartha, Von Bartha, Basel and S-chanf
“We already have major extra costs for custom papers and art handling from the EU to Switzerland. It will almost certainly affect our shipping, as well as exhibition policies, for our UK-based artists.”
Stuart Shave, Modern Art, London
“Boris Johnson has created a ‘war cabinet’ to deal with Brexit—our country’s most right wing, detestable and unelectable cabinet in years, who are intent on destruction excused by a small margin in the EU referendum.”
• This is an adapted version of an article that appeared in the September 2019 issue of The Art Newspaper under the headline "Caught in the logjam: no-deal Brexit reality bites"