Speaking exclusively to MRW, Richard Ottaway MP has developed the intentions behind his private member’s bill to reform the scrap metal industry.
As reported by MRW, the plans include a council-run licensing scheme, greater powers to local councils to vet licence applicants, charge fees and remove licences. Dealers would be required to keep more detailed records and demand photo ID from sellers.
MRW put some of the concerns of scrap dealers to the MP before he introduced his bill in Parliament.
MRW: You have suggested your bill will introduce a licensing scheme run by local authorities. But many in the industry believe councils have failed to properly administer licensing under SMDA (1964), and that a national licensing regime is the best way to tackle the national problem of metal theft.
Ottaway: Many councils have been unable or reluctant to administer the SMDA 1964 because it is a toothless mechanism where licences are dispensed at no cost and any breach of the law results in a maximum £1,000 fine.
When you consider scrap metal is a multi-billion pound industry, this is hardly a strong deterrent. The situation has not been helped by the lack of accountability through cash payments and a myriad of uncoordinated registers that exempt itinerant traders altogether from scrutiny. However, as metal theft has increased, many more councils have been taking a greater interest in upholding the registration regime – and the government has moved in the right direction to support them.
Changes under the LASPO (Legal Aid, Sentencing and Punishment of Offenders) Act that are anticipated to come into force this autumn, will introduce unlimited financial penalties, greater police powers of entry and cashless transactions to create more transparency. My bill will bolster this further with the introduction of a licence fee that will cover all local authority costs in relation to this regime and a single national register capturing information on every single UK scrap metal dealer. There will at long last be an incentive for local authorities to implement the regime, in the knowledge that they will not lose out financially, and that they have the backing of the police and the courts.
If councils are given licence fee raising powers, there may be concerns that scrap dealers in some areas will face unfair disadvantages where license fees are higher; and that councils will be able to set punitively high fees. What assurances can you give legitimate scrap businesses?
All I can say at this stage is that there is no desire for any local authority to lose out under the new regime – but this is not a profit-making enterprise either. The last thing I want to create is a postcode lottery that would penalise dealers working in certain areas.
The Home Office is currently working with the Local Government Association to work out the likely cost to councils of this new regime. My bill will allow local authorities to set fees up to a cap set by the Secretary of State that will ensure costs remain reasonable for the scrap metal industry whilst allowing local authorities to cover their expenses.
Some of the proposals you outlined seem like they could be quite bureaucratic – perhaps that’s necessary for robust regulation. But many legitimate small scrap businesses will be concerned that the cost of this bureaucracy will be paid by them through additional paper work and licence fees and become an unaffordable burden at a difficult time.
The measures proposed in my bill don’t go much further than what is already in place. Scrap metal dealers, regardless of their size, are already required to maintain records of transactions. All we want to do is to strengthen this to ensure records are accurate and traceable, which is not always the case at the moment. My bill will replace ineffective regulation with something that works. Better record keeping for legitimate dealers is a small price to pay in return for the significant benefits they will gain from working under a more robust and fairer licensing regime.
Some in the industry feel they are being punished and bullied because the police have been unable properly to police metal theft. They believe part of the problem has been the police’s failure to properly enforce the SMDA and target the criminal element in the industry.
Police forces are strengthening and improving their law enforcement activity in this area and we are seeing more intelligence-led work delivered through the National Metal Theft Taskforce and British Transport Police’s National Fusion Centre.
The SMDA 1964 is fundamentally flawed because it does not require accurate record keeping. The subsequent lack of transparency with anonymous and untraceable transactions makes the police’s job very difficult. The revised regime however, in conjunction with cashless payments, will require scrap metal dealers to accurately record all transactions.
Operation Tornado, which is a voluntary precursor of things to come with the new licensing regime, is proof that policing with the right procedures in place is both effective and necessary. In the first few months of its introduction in the north east, the number of metal thefts halved.
A lot of metal theft is low level theft which would be unlikely to result in prosecution or serious punishment. Often, it is impossible for police to prove a theft has happened. How will your proposals on photo ID and records help to reduce this?
Requiring all scrap metal dealers to maintain accurate records of transactions and retain photo identification of all sellers, including itinerant collectors, will provide a much greater degree of transparency. And this combined with the ban on cash transactions will remove the low risk that metal thieves currently enjoy when selling stolen metal to elements of the scrap metal industry.
When was the last time you visited a scrap yard? And do you any future visits?
I have spent the first few weeks since I chose the subject of my Private Member’s Bill talking to parties across the industries and organisations affected by this important piece of legislation.
This week I am visiting three scrap yards and I’m sure everything that I have learnt about this complex industry will come into sharper relief and help inform me at this crucial time while my draft bill is still under construction.