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Communication breakdown on scrap cash ban

With one week to go before cash payments are banned from the scrap metal trade in England and Wales, a minority of traders is still not prepared for the changes.

In an MRW survey of scrap dealers carried out this month,15% said they had yet to begin making preparations for the ban on cash, and more than 4% were not aware the change comes into force on 3 December.

As well as banning cash deals, the law, introduced under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, also prohibits payments by postal order, gift voucher, mobile phone credit and foreign currency, and introduces new, stricter requirements to record payments and seller details. The new rules also give greater powers to the police to enter yards.

A recurring theme in the comments from surveyed dealers was that there had been too little communication from the authorities on the date the ban comes into effect, and what firms need to do to comply. Several respondents said they had not heard anything from the Home Office or other official sources about the ban.

Most respondents said they had already begun preparing for the ban, with a third almost completely ready and 20% already cash-free.

Our results, although not a scientific sample of the sector, challenge the perception that resistance to change is concentrated among the smallest businesses.

The proportion of yards not begun preparing is similar among small and medium- sized firms, with 16% of small, and 14% of medium-sized firms yet to begin making the necessary changes.

Both small and medium sectors of the trade, as defined by the membership classifications of the British Metal Recycling Association (BMRA), also had similar proportions of companies ‘almost ready’ (around 33%) and ‘already cash free’ (around 19%).

Of the dealers who responded, 5% described themselves as large firms (tonnage over one million tonnes or turnover more than £100m), 19% medium (tonnage 40,000 to one million or a turnover £10m-£100m) and 77% small firms.

More below

scrap ban survey info chart

Another concern raised by survey respondents was that the ban would disproportionately affect smaller traders.

Some respondents suggested that the BMRA and larger metals recyclers did not understand the effects of the ban on small dealers. One accused the association of “total ignorance of the plight the cashless law will have on the small merchant”.

Another said: “The BMRA is only supporting its members, not the whole scrap metal industry.”

But others praised the trade body’s help: “No one except the BMRA keeps us informed or helps us,” commented one trader. Another said: “If we had not been in the BMRA, we would have had no guidance at all.”

While 36% of respondents said they were BMRA members, 51% said they looked to the organisation for guidance on the cash ban, ahead of the Home Office (38%), trade press (35%) and police (25%) (see above left).

Detective superintendent John McBride, who heads the national metal theft taskforce for the British Transport Police (BTP), told MRW they had been working with the BMRA on preparedness checks at yards in the run-up to the ban. He said officers had also been distributing BMRA guidance leaflets and talking to dealers to reinforce the message and explain the requirements of the new law.

“There will be police operations taking place to support the introduction of this new legislation,” he added.

A Home Office spokesman said: “We are working closely with the BMRA, BTP and the Local Government Association to ensure people are provided with information about the new legislation via posters, leaflets and guidance.”

Method:

MRW surveyed 114 metals recyclers online and by telephone during November.

What you said:

“Not heard anything from the relevant authorities about when the ban comes in to force.”

“Stopping cash for scrap will not stop metal theft in any way.”

“One major problem is the smaller customers and householders that just want to clean the shed/garage. Cash is better for those customers.”

“We’d have liked the ban only for payments over £50.”

“We have to train older members how to work computers all at our expense, it is nerve racking for a lot of people to have to start learning something new at their time of life or be without a job, plus the fact a genuine error would result in the management receiving a large fine and closure of the business.”

“Initially custom will decline as tradesmen are worried about Inland Revenue issues.”

“Not though out properly with regards to itinerant collectors.”

“It suits the larger companies.”

“The scrap industry has been operating on a cash basis ever since it began.  We’ve been given two months to try to change all this. How on earth is this enough time?”

“It will create a black market and make stolen scrap even harder to trace.”

“Bring it on; hopefully it will put the rogues out of business!”

“Will put a lot of good companies out of business.”

More info:

Home Office: bit.ly/T5Fafn

BMRA: www.recyclemetals.org

Additional research: Ben Carey-Evans.

Readers' comments (1)

  • Two months ? It's been on the cards for a year. April 2nd seen Operation Tornado and a confirmation about the impending cash ban. Yes, it was only two months notice for the exact date but people have had a year to prepare. The majority seem to have kicked their heels thinking "nah, it'll never happen". Our yard as bad as the owner still thinks it is 1975 but I have managed to put it all in place within six weeks with new computers, new weighbridge software, new payment methods with the bank and have been ready to go past two weeks.

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