The idea behind the single European Union market is supposedly to free up trade in goods and services, creating an EU-wide “home market” and thus strengthening the region’s global competitiveness. The powers given to the European Commission in 1986 to guard against “distortion” of competition were intended to promote that agenda — not to flood the market in a torrent of otiose regulation. None is more perversely counterproductive than the EU ’s Resale Right Directive, a levy payable by vendors to artists whose work is resold, or to their heirs.

In the name of reducing market “distortions”, this sales tax is about to be extended from the 11 member states where it already exists to the entire EU, including Britain. The value of the tax to artists is disputable. It piles not only costs but bureaucratic complexity on every transaction, making the lower end of the market less attractive to dealers. In France, where droit de suite has existed since the 1920s, the lion’s share goes to the heirs of such masters as Picasso, while artists with scant prospect of resales suffer because buyers demand a “resale levy discount”.

No EU-wide art market exists; in most countries it is small and local. Britain’s competitive sector, by contrast, employs 37,000 people directly, accounts for more than half of all EU trade and is Europe’s only truly global centre, the occasional art fair aside. Most art works are easily transportable, and vendors can choose to send them instead to New York, Geneva and Asia, where no such tax is levied. The directive thus risks driving important segments of the trade out of Britain — and the EU. Artists would lose twice, getting neither royalties nor the benefits of a flourishing home market.

Successive governments have contested this directive all the way. Unable to muster the votes to block it entirely, Tony Blair personally fought hard to diminish its impact — most importantly, since the work of dead artists accounts for 80 per cent of the value of the contemporary art market, by securing that, pending a review of the directive’s impact in 2009, the levy would apply in Britain only to living artists. Even so, Britain voted against the directive in 2000 because the payment threshold was set at €3,000, a level at which most sales are local, and administrative costs far outweigh presumed benefit. Ministers retired hurt – and left to the very last minute the unpalatable task of incorporating the unwelcome rules into British law.

Yet, inexplicably, this is turning into another instance of bleat and retreat. In a sharp U-turn, Lord Sainsbury, the Culture Minister, has come up with regulations that exceed EU requirements. He proposes voluntarily to extend the levy to works worth only €1,000, thus pointlessly complicating a bad situation. Far from locking in derogations that Mr Blair fought to secure, he has succumbed to the British vice of gold-plating Brussels directives.

Goldplating violates Cabinet Office guidelines and, in this case, would undermine Britain’s position in the bigger battle over whether the resale right should, after 2010, extend to dead artists. Global markets need global, not regional, rules. Unless and until the US, Swiss and Asian markets also grant resale rights too, the EU’s “level playing field” will merely denude London of the top players. Parliament, which tends to let EU-based regulations slip through, must act to protect Britain’s status as a global centre for artists and art.