Sale of Old Masters to fund repairs may spark new 'art drain'

One of the great British treasure houses, Castle Howard, has for centuries been custodian of the country's finest private collection of Old Masters. But now Simon Howard, heir to the 300-year-old Yorkshire mansion, has signalled a change in attitude.

Six weeks after the Government gave the Tate nine months to raise the £12.5m needed to stop his family exporting Sir Joshua Reynolds's Portrait of Omai, Mr Howard has indicated he may be prepared to sell again.

"The upkeep of this house is huge, and restoration needs to go on. Unfortunately, the numbers of people going round these houses now is not in the ascendancy and there are far more competing attractions," he told The Independent on Sunday. "We don't like selling, because we don't like seeing items going out of the collection."

Mr Howard's candid remarks will alarm public galleries, and the growing number of campaigners calling for drastic new measures to prevent the nation's heritage going overseas.

They will be seen as particularly sensitive after a week in which Study of a Mourning Woman, a Michelangelo sketch retrieved from a Castle Howard scrapbook, was finally sold to an anonymous American broker. Having spent six months trying to match its £5.9m price tag, the National Galleries of Scotland had to admit defeat, and the Arts minister Baroness Blackstone lifted the temporary export bar preventing its sale.

Meanwhile, the National Gallery in London has been given a month to begin raising funds to prevent Raphael's Madonna of the Pinks being sold for £35m to the Getty Museum in Los Angeles by the Duke of Northumberland.

Fine-art experts warned last night that such high-profile cases were "the tip of an iceberg". Soaring prices on the open market and increasingly ineffective tax incentives would, they predicted, create a new "art drain" on a par with that experienced before the First World War.

Art historian Dr Peter Mandler said that where landowners might once have been persuaded to donate or sell works to public collections in lieu of inheritance or capital gains tax, as tax rates have fallen this is no longer a preferred option. The huge sums private buyers are now willing to pay for Old Masters such as Rubens's Massacre of the Innocents – recently sold to Lord Thomson of Fleet for £49.5m – were far more alluring.

"If owners don't see that they have a moral obligation then perhaps new legal obligations need to be defined," said Dr Mandler. His fears are endorsed by Dr Helen Rees Leahy, director of Manchester University's Centre for Museology, who has uncovered a secret list of 40 prime masterpieces drawn up by the Treasury in the 1920s. Most of the works, including a Holbein of Henry VII once owned by the Spencer family, and Velazquez's Juan de Pareja, which belonged to the Earl of Radnor until 1971, have since been sold – many overseas.

Landowners are unapologetic about their increasing willingness to seek out the highest bidder for their works. When the National Gallery criticised the Duke of Northumberland for reneging on an earlier agreement by his family to give it first refusal before selling Madonna of the Pinks, the duke retorted publicly: "Owners of great works of art should not be shamed into settling for anything less than full value, especially when they are acting to protect a wider heritage."

He was supported by Lord Hampden, of Glynde Place in East Sussex, who warned the cost of upkeep of country houses was so high that no responsible landowner could rule out selling assets to maintain them. "There are times when one looks at one's assets and realises that 50 per cent of them would look good in a gallery." Charles Saumarez Smith, director of the National Gallery, says the Government must look at tax incentives, if necessary introducing a US-style income tax break.

"In many countries, people get exemption if they give paintings to the nation, without having to wait until their family faces an inheritance tax bill," he said. "At present, people can do this with land and stocks, but not art."

Richard Wilkin, director general of the Historic Houses Association, saystax relief on property repair bills would discourage landowners from disposing of their art: "It wouldn't be hugely expensive for the Government, but for some individuals it would stop them having to sell."