Exports and acquisitions: tears or cheers?

FOR OVER A CENTURY lamentations over the inexorable flow of great works of art from British private collections to museums 0r private owners abroad have been a commonplace. Several of the founders of this Magazine in 1903 were also instrumental in the establishment, in the same year, of the National Art-Collections Fund (today the Art Fund), which was set up to assist mus-eums in the United Kingdom with acquisitions, not least great works of art threatened with export, such as Holbein’s Christina of Denmark, Duchess of Milan, acquired for the National Gallery in 1909 thanks to a last minute anonymous donation made through the Art Fund. The Reviewing Committee on the Export of Works of Art (RCEWA), established a few years after the Second World War, aimed to identify and temporarily halt the export of objects judged to be of pre-eminent artistic or historic importance, in the hope that museums, libraries or archives could acquire at least some of them. 

The latest Annual Report on the export of objects of cultural interest illustrates some serious problems in the export review procedures.1 It was certainly good news that in 2015–16 nine objects under review by the RCEWA were retained, against six exported. But the relative value of the two groups – £7 million against £37.5 million – shows that institutions in this country are struggling to compete in the global art market, in particular for higher value items such as old-master paintings. This problem was ex-acerbated in June 2016 as the value of sterling plummeted following the vote for Brexit. Pontormo’s sublime Portrait of a young man in a red cap (Fig.1), almost certainly the portrait of Carlo Neroni described by Vasari, makes perhaps the saddest case in the Reviewing Committee’s report.2 Acquired for £30.6 million from the Earl of Caledon by the New York-based financier and collector J. Tomilson Hill, an application for an export licence was heard by the reviewing committee in October 2015. After heroic efforts, the National Gallery succeeded in raising the matching sum and made an offer. However Mr Hill has refused to sell, pointing out that because of the fall in the value of the pound he would now be left some $10 million out of pocket. As a result an export licence has been refused, meaning that the painting must remain in the UK for at least the next ten years. Could a solution be the one used by another New York collector, Ronald Lauder? He bought Giovanni da Rimini’s Scenes from the Lives of the Virgin and other saints at the sale of works of art from the Northumberland collection. When this painting was prevented from being exported and the National Gallery started fundraising for it, Mr Lauder agreed to donate the painting on condition that he could enjoy it for his lifetime, on loan from the Gallery.

The highest-priced work of art considered by the Reviewing Committee in 2015–16 was one of the finest of Rembrandt’s paintings left in private hands, the Portrait of Catrina Hooghsaet, sold by the Penrhyn Settled Estate to an anonymous foreign buyer for £35 million. The Art Fund prepared a major campaign to acquire the portrait, which has been in Wales since 1860, for the National Museum, Cardiff, only for the licence application to be withdrawn on the eve of the campaign’s launch.  After this fiasco, Stephen Deuchar, Director of the Art Fund, threatened to pull out of future expensive and time-consuming fundraising campaigns unless changes were made to the export review process to prevent foreign buyers from manipulating the system. Currently the portrait hangs in Cardiff, on loan for three years, at the end of which period the owner can submit a new application for export.

All too often in the past, when buyers have refused matching offers or withdrawn export licence applications, they have simply returned a few years later with the value cited on the application greatly inflated, in the hope that this will deter UK institutions from making any further attempts to purchase the items. Two more treasures formerly in Wales, Clive of India’s wonderful Mughal ruby and emerald flask and sapphire and ruby huqqa set are the subject of a current export stop, following a second licence application by the Qatar Museums Authority. After their sale at Christie’s in 2004, a first application was made for these objects at valuations of £2.973 million and £98,000 respectively, but it was withdrawn when the Victoria and Albert Museum and the National Trust signalled their intention to raise funds for their purchase. In the new application, the prices have more than doubled, to £6 million and £244,000. 

One worrying aspect of both the Pontormo and the Rembrandt cases is that the British owners of the paintings decided to ignore the fiscally advantageous arrangements for private treaty sales, which have long been in place and which were frequently used in the past. Thus Lord Caledon preferred to pay £19.4 million of inheritance tax on the Pontormo, rather than to seek a sale to a UK institution at a tax-free negotiated price of around £10 million. It is to the credit of the Government that it agreed to make a special grant to the National Gallery equivalent to the estimated value of the tax collected or due to be collected by HMRC.

It has long been obvious that the failure to retain many of the pre-eminent works of art sold abroad is due not to deficiencies in the export licensing system, but simply to a lack of funding.  In what now seem like the halcyon days of the 1980s, national museums had ring-fenced purchase funds, while even regional museums could aspire to major acquisitions. In our present age of austerity, additions to collections become ever more difficult to justify. 

The National Heritage Memorial Fund (NHMF), set up in 1980 as a fund of last resort to save items of outstanding importance to the nation’s heritage, has done magnificent work over nearly four decades, in recent years, for example, helping to acquire the two greatest of the Sutherland Titians. Nevertheless, its current annual grant-in-aid of £5 million will not buy many Titians. Its bigger sister, the Heritage Lottery Fund (HLF), directs much of its funding towards improved access, learning and engagement, and although it has made some important grants for acquisitions, it has never become a safety net for objects threatened with export. The Department for Culture Media and Sport (DCMS) is currently undertaking a review of the operations of both organisations.3 Desirable outcomes would include a sensible increase in grant-in-aid for NHMF, together with a commitment on the part of HLF to support more acquisitions, perhaps with greater flexibility on matching funding requirements. Meanwhile, the Government must continue to improve the fiscal concessions available to help encourage tax-efficient giving. If the Reviewing Committee’s report is read in tandem with the Cultural Gifts Scheme and Acceptance-in-Lieu report for 2016,4 we get a more balanced picture of the losses and gains over the past year. The Acceptance-in-Lieu scheme (AIL) has long enabled many significant works of art and properties to enter the public domain in settlement of inheritance tax liabilities; since 2013 it has been joined by the Cultural Gifts scheme (CGS), which allows UK taxpayers to settle tax bills by donating works of art to the nation during their lifetime, donors receiving a reduction in their fiscal liability for income, capital gains or corporation tax. 

Now in its fourth year of operation, the CGS has already resulted in a remarkable range of donations to public collections, from a rare early Van Gogh portrait for the National Gallery to a collection of Beatles manuscripts for the British Library. Tate has received a collection of modern Italian photographs, the Ashmolean Museum a magnificent sixteenth-century bronze inkstand by Vincenzo and Girolamo Grandi, the first gift from a corporate entity, Daniel Katz Ltd.  There have been delightfully unusual gifts too, such as the world’s largest collection of paper peepshows to the V. & A. and a tiny illuminated missal, once owned by the great Elizabethan collector John, 1st Baron Lumley, to the British Library. 

In his memoir ‘Bric-à-brac’ of 1897, Ferdinand Rothschild wrote of his belief that ‘it should be a source of gratification to the public, that most fine works of art drift slowly but surely into museums and public galleries’.5 Rothschild saw it as his duty to pass at least part of his collections to the public domain, as did many other Victorian and Edwardian collectors. In this country such an instinct has been less evident in recent decades, so we can no longer rely on disinterested private generosity alone. The Cultural Gifts Scheme has already proved itself an imaginative way to rekindle that spirit of generosity. Together with a positive approach to acquisitions on the part of the HLF, gradually improved tax incentives and imaginative approaches to involving the interest of the wider public in major acquisition fundraising campaigns, it may be possible to envisage an age when we can, in place of lamentation, raise a small cheer. 



1 Department for Culture, Media & Sport: Export of Objects of Cultural Interest 2015–16. Published December 2016, www.gov.uk/government/statistics/export-of-objects-of-cultural-interest-201516, accessed 14th March 2017.

2   See F. Russell: ‘A Portrait of a Young Man in Black by Pontormo’, THE BURLINGTON MAGAZINE 150 (2008), pp.675–77.

3 dcms.eu.qualtrics.com/jfe3/form/SV_2isRhaoX4ZsZNgF, accessed 14th March 2017. Closing date 6th April 2017.

4 http://www.artscouncil.org.uk/sites/default/files/download-file/Acceptance_in_lieu_spreads_1%20for%20website.pdf, accessed 14th March 2017.

5  F. Rothschild, ed. M. Hall: ‘Bric-à-brac.  A Rothschild’s Memoir of Collecting’, Apollo 166 (July–August 2007), pp.50–77, esp. p.68.