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Home Office rejects call for delay on scrap cash ban

A consortium of scrap metal dealers is pressing ahead with a legal challenge to delay the introduction of a ban on cash transactions despite strong opposition from government solicitors.

A court action is being drafted in an attempt to prevent an amendment to the Scrap Metal Dealers Act 1964 being enacted on 3 December that would make it an offence for the majority of dealers to buy scrap for cash.

The challenge is being co-ordinated by Amy Bird, director of One Stop Recycling, on behalf of hundreds of disgruntled scrap metal dealers.

The Home Office was notified of the impending action by a firm of solicitors acting for the merchants. A letter sent last week said the new law posed a “serious risk to the commercial viability” of a large number of small and medium sized businesses.

But a response from the Treasury Solicitor’s Department on behalf of the Home Office rebuffed claims that smaller dealers have not been given enough time or guidance to implement non-cash transactions.

It said legislation had been given Royal assent in May, giving the industry seven months advance notice, and that there was no requirement to give guidance on how businesses should adapt. It added: “We strongly disagree that there is any lack of clarity or any ambiguity in the provisions.”

In response to merchants’ fears that using cheques instead of cash was “not a realistic possibility” due to delays in clearance and administrative costs, government solicitors said: “In our view it is entirely normal – not to say essential – for businesses of all sizes to have banking facilities. Nor is there anything unusual in using cheques or electronic payments for small sums.”

Jon O’Brien, director of Simply Recycling Solutions and organiser of the Metal Recycling Collective (MRC) pressure group, said £35,000 had been raised to cover the initial court costs. Pledges made by MRC members total around £98,000.

He said: “No-one’s really happy and we don’t know what sort of chance we’ve got. But you’ve got to be in it to win it.

“I’m thankful to the members of MRC. They’re not messing around.”

Some itinerant collectors and motor salvage operators will continue to be able to use cash until a private member’s bill on wider reform of the scrap industry put forward by MP Richard Ottaway makes its way through Parliament.  

The pressure groups claim the cash ban will “unfairly discriminate” in favour of itinerant collectors and motor salvage operators.

The law was introduced under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. As well as banning cash deals – including postal orders and gift vouchers – it introduces stricter requirements to record payments and seller details. The new rules also give greater powers to the police to enter yards.

A MRW survey recently found 15% of scrap metal dealers said they would not be fully prepared for the new rules by 3 December.  

UPDATE: A previous version of this article stated that MRC and Amy Bird were officially working together, but Bird said that they had not joined forces.

Readers' comments (5)

  • Not even EMR are READY the new government is a joke, i bet if you rang your police station now and spoke about it , they wouldnt have a clue what is going on. The small dodgy traders that avoided Tornado and still buy stolen material will STILL pay cash because NO ONE WILL DO ANYTHING ABOUT THEM !!. the registered dealers are an easy target

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  • Well done we all agree

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  • Update, Amy would have got nowhere near the target donations she required if the Metal Recycling Collective had not have helped. It is unfortunate Amy feels that we were not working together and also a little strange as most of her signed support letters came from MRC. Many thanks to all those who supported this action.

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  • Treasury solicitors letter
    Para 3 Line 3
    "with transactions estimated by the Home Office to be between 1 & 1.5Bn each year creates opportunities for transactions to avoid direct and indirect taxes"

    I thought the cash ban was about stolen scrap?

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  • Its amazing that Jon is quoting from a treasury letter that was sent directly to me - Amy Bird. I would like to see at which point Mr O'Brien used his 98k to instruct counsel. Jon O'Brien is playing directly into the governments hands displaying the sort of attitude that got us into this mess in the first place. I wish the members of the MRC every success, you are going to need it. For the record, if I were a member I would like to know where my 98k had been spent. I will now get on with the job of running my company. I have been in this industry all my life and am passionate about it, as those of you have been working with me will appreciate. I will continue to try and get clarity around payment methods etc for those people who genuinely need help, this is not for money or ego but for genuine concern for the industry.

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