AUCTIONEERS REGISTRATION (Hansard, 24 March 1965)

§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I beg to move, That leave be given to bring in a Bill to provide for the registration of auctioneers; to regulate the conduct of persons carrying on business as auctioneers; and for purposes connected therewith. The Bill which I wish to introduce arises out of the revelations last autumn in the Sunday Times, followed by other newspapers, of price rings and knock-outs, and particularly of the price ring that operated at the auction at Blockley, near Moreton-in-Marsh, in my constituency, followed by the knock-out in that town of which we heard later.

My hon. Friend the Member for Richmond, Surrey (Mr. A. Royle), and other hon. Members and myself have pursued this matter by means of Questions, debates and other means in the House, and I should like to thank the Government for having been most helpful in pursuing it from their angle, for having discussions with the trade and for taking the whole thing very seriously. I know that they are now trying very hard to find means of preventing the abuse of price rings and knock-outs in the future.

My Bill would fit in with and help the Government in what they are doing. In my submission, it would go to the very heart of the matter, in that people will persist in selling their objects at lower prices than they are worth, thereby making the conditions in which the price rings can flourish and operate. This applies to the antique book trade, the antique furniture trade, to pictures, valuables of all sorts, Government surplus stores, land, animals—in fact, practically everything that is sold under the hammer.

I would now invite the House to forget, as Carlyle said: The Correggiosity of Correggio and the learned babble of the Sale Room and the varnishing auctioneer. and look at the economic function of the auction in our society.

Before doing that, however, it might be thought that, after last week's happenings at Christie's, it is the bidders themselves who need disciplining, and not the auctioneers. Here I cannot resist quoting the instructions which Mr. Simon gave 573 to the auctioneer at Christie's. They were: When Mr. Simon is sitting down, he is bidding. If he bids openly, he is also bidding. When he stands up, he has stopped bidding. If he sits down again, he is not bidding unless he raises his finger. Having raised his finger, he is bidding until he stands up again. This was followed up by Osbert Lancaster, with Lady Littlehampton standing on her head to indicate that she was bidding.

I wonder what would happen if I were to write to you, Mr. Speaker, to say that I wished to catch your eye in a debate, and said, "When I sit down, I want to be called. When I stand up, I stop wanting to be called. If I start talking, I do not want to be called unless I sit down, when I do." You, Mr. Speaker, quite rightly, would take no notice of me at all, and I would be unlikely to be called on that occasion. Therefore, it all goes back to the person in charge—the auctioneer—and I think that we must leave the disciplining of the bidders and follow again the fortunes of the auctioneer.

Auctioneering is an old trade, a trade as old as the hills. Herodotus tells us of the Babylonian custom of disposing of maidens in marriage by delivering them to the highest bidder at auction. The ancient Scottish name for an auction is a roup, and under a law of Henry VII auctioneering was confined to various officers of the Crown known as "out-ropers". They alone were allowed to conduct auctions. Here is a precedent, if one were wanted, for the House to intervene in the affairs of auctioneers, and to make rules and regulations for them.

The business of the auctioneer is to sell goods for the highest price that he can obtain. He does this partly through organising publicity for the sale—attracting the dealers and all conceivable buyers —and partly through his expert knowledge of the value of the goods, so that he can withdraw items, or not let them be sold, if they look like going for less than their value. He fails, in my opinion, in his professional duty if he sells an item too cheaply. This, indeed, is what he is paid for. This is why he receives a fee of 5 per cent., to sell a thing at its proper value. If he fails, it is then, and only 574 then, that the knock-out and the price ring can function.

It has been said that it is the fault of the vendor if he sells his goods too cheaply. Ever since Esau sold his birthright for a mess of potage this has happened. Doubtless a ring was operating at that time. I do not believe that it is the fault of the vendor. I believe that it is, in fact, the fault of the auctioneer, because that is what he is professionally in business to do—to ensure that goods go for approximately their correct value. No solicitor may practise who constantly defrauds his clients, either through ignorance or through No architect may practise whose buildings fall down. He is stopped from participating in his profession in future.

In fact, all professional men are required to pass certain standards for the protection of their clients, the public who come to them for advice and guidance. I do not see why this should not apply to auctioneers as well. If they sell things under value, all that happens is that the price ring will operate and people will move in and make, so to speak, a killing of the margin between the price at which things are sold and the price which they should have fetched.

All that is needed at present is an annual licence costing £10 to practise the profession of auctioneer. The Bill which I would bring in is designed to ensure that auctioneers in future are registered with a statutory council without membership of which they would not be able to practise. They are now, under the 1845 Act, forced to register and to obtain a licence for £10, but there are no conditions attached to their practising. There is, it is true, a Chartered Auctioneers' and Estate Agents' Institute, but it is not a statutory body and it has no powers of discipline over its members.

My Bill would also provide rules by which auctioneers and those who practise the profession would be asked to abide. I am certain that this should outlaw completely the practice of private auctions. Any auction which takes place should take place in public, and this will certainly be an extra weapon for those who are fighting against the secret price rings. Secondly, I believe that the rules should ensure that every auctioneer 575 employs qualified valuers, valuers qualified in the goods which they are attempting to sell; no auctioneer who may be qualified to sell cattle should be allowed to sell old masters, and no auctioneer who is qualified to sell land should be allowed to sell jewellery unless he has the specialised valuation knowledge at his disposal to do so. There must be some auctioneers—indeed, I know that there are—who are not competent to sell across the whole field. It is these who should be restricted to the areas of sale where they have the specialised knowledge.

Lastly, I believe that we should have a rule that when a lot does not reach its reserve no commission is chargeable. This would help to encourage people to put a proper reserve on their goods and to encourage auctioneers to get a proper price for what they are selling. I think that this is know in ancient parlance as "puff-bidding", whereby a lot is withdrawn before it reaches its reserve. As far as I understand it, some auctioneers charge if goods are knocked down below the reserve price and others do not. I suggest that it should be made one of the rules of the trade that no charge is made where goods do not reach the reserve price.

My attempt to bring in the Bill is no derogation of Christie's, Sotheby's and the other many famous auctioneers in this country who have brought us much trade and enjoy renown and hallowed reputations. It is, rather, to bring all the other auctioneers up to the same high standards that I beg leave to introduce the Bill, which, I am sure the whole House will agree, will be an important addition in the hands of the authorities who wish to fight against the price rings.