Scrap Metal Dealers Bill

Lord Taylor of Holbeach Excerpts

Friday 30th November 2012 Lords Chamber

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, I thank my noble friend Lady Browning for introducing so skilfully the Bill for noble Lords’ consideration and for her important contribution to developing the war against this abuse of metal theft, about which all noble Lords have spoken very robustly today. There is considerable consensus around the House that this illegal activity needs to be tackled. It is fitting that my noble friend was asked to take on this Bill by its sponsor, Richard Ottaway MP, because as noble Lords will know, my noble friend was a Minister in the Home Office when the metal theft epidemic erupted. During her term of office she played a considerable part in developing the Government’s response. I also join all noble Lords in acknowledging the work of my honourable friend the Member for Croydon South, Mr Richard Ottaway, and for bringing forward this Bill. He has immersed himself in this topic by meeting and consulting with stakeholders, and then developing and fostering cross-party and industry support. We have that evidenced in the correspondence that Peers in this House have received. There is widespread support for the Bill.

How pleasant it is for me to be able to thank my noble friend Lord Henley not only for his contribution to this debate, but also as my predecessor in the role that I am now undertaking. I know how deeply he was engaged in dealing with the challenge of legislating for this problem in the Home Office. It may not be particularly appropriate to use the analogy of apostolic succession, but at the very time that my noble friend moved to the Home Office, I was in Defra. We were working in conjunction with the Home Office through the Environment Agency to set up the task force and other arrangements for dealing with this abuse. I am sure that the right reverend Prelate will forgive me, but we have an apostolic succession here today and noble Lords have been able to hear from all three of us.

Let me make it clear that this Bill has wholehearted government support, and it is important to note that the support does not just end there. We have witnessed the support for it here in this Chamber. It is supported by police forces, including the Association of Chief Police Officers, and it is supported by the Local Government Association and local authorities across England and Wales which are keen to be given the powers to regulate scrap metal dealers properly. One of the problems is that there are insufficient powers for enforcement agencies actually to deal with this problem. The noble Lord, Lord Rosser, asked about local authorities’ attitude to seeing this legislation through. I know that they have made it clear that they are keen to see this legislation enacted and implemented as soon as possible. A number of other bodies have written to noble Lords, all expressing their support for the Bill. It is supported by those who have suffered from metal theft, including private industry, those responsible for transport infrastructure and, indeed, the church. More importantly, it is supported by many legitimate scrap metal dealers who seek more effective regulation of their sector. Before I move on, I would like to express my particular thanks for the contribution of the British Metals Recycling Association and its director-general, Ian Hetherington. The BMRA has worked closely with Richard Ottaway on the development of this Bill and with the Government on wider measures to tackle metal theft. The association has at all times sought to represent its members’ interests as well as those of the wider industry, and it continues to provide challenge to government on their behalf. Time and again we have heard examples of unscrupulous scrap metal dealers prospering at the expense of legitimate operators. I believe that this Bill will change that and level the playing field across the metal recycling sector.

The Bill seeks to reform the regulation of the industry, which is currently regulated by legislation dating back to the 1960s—the Scrap Metal Dealers Act 1964. The Government believe that this Act is outdated and no longer reflects the 21st century. This is a £5.6 billion industry, and its development means that the legislation needs to be correspondingly robust. It may interest noble Lords to know that the Scrap Metal Dealers Act 1964 originated in this House, and that the Bill was introduced by Lord Auckland. However, its days are numbered and this Bill is designed to replace it.

Reform of the industry is important for many reasons but I believe that it will make a significant contribution to tackling metal theft. Parts of the scrap metal sector offer the principal market for stolen metal. Unscrupulous scrap metal dealers either purposefully purchase stolen metal, knowing full well what they are doing; or they purchase it without undertaking any checks or due diligence, knowing that lax regulation will allow them to do so without attracting the adverse attention of the authorities.

The rising commodity prices of metals on the world market, coupled with this low-risk, “no questions asked” marketplace, have seen the theft of metals turn into a growing, acquisitive crime. I have a number of examples of my own but will not rehearse them as noble Lords have all been able to come forward with very graphic examples of the economic and cultural damage that has been caused by this pernicious crime.

Metal theft peaked in the UK in 2010-11. Since then, there has been considerable work by a range of organisations to tackle metal theft, which is having some success. Last month, ACPO estimated that reported metal thefts have fallen by around 39% this year; an excellent achievement. I have some Home Office figures here that will perhaps help my noble friend Lord Henley, who wanted to know what the impact had actually been of the Operation Tornado task force and of the anti-theft design of many materials. I will read out this tabulation as it will be useful to put it on the record.

Scotland has seen a 64% reduction, north-east England 53% and north-west England 58%. I do not know what the noble Lords, Lord Greaves, and Lord Willis, will make of that. The noble Lord, Lord Willis, is not in his place now but Yorkshire and the Humber has only seen a 16% reduction. We would have to calculate whether that was because they were all going across to the north-west, as the noble Lord, Lord Greaves, alleged. The east Midlands has seen a 29% reduction, the West Midlands 48%, Wales 26%, south-west England 50%, south-east England 49%, London 29% and the east of England 60%. These are sizeable figures and show that there has already been an impact as a result of having more confident enforcement in this area. How much better it will be when we have these measures in place, which is why I hope we will be able to implement them.

The noble Lord, Lord Faulkner, asked about funding. I cannot give him a positive response. Of course, we are awaiting the Autumn Statement. We are aware of the considerable representations that have been made on this issue, and will be looking at whether it will be possible to implement it. This debate has reinforced the continuing importance of this enforcement drive.

The reduction in metal theft can be put down to a number of different activities, including: greater law enforcement activity by a number of organisations, assisted by the £5 million made available to the national metal theft task force; seeking design solutions, which has made a great deal of difference, as my noble friend Lord Henley mentioned; strengthening the intelligence on metal thefts and offenders; working with the scrap metal industry to voluntarily improve its trading standards, in particular through Operation Tornado; and seeking to strengthen the criminal justice system response to metal theft cases, including working with the Crown Prosecution Service and metal theft victims to inform the courts of the full costs, including consequential costs, of all metal theft offences, especially to help inform sentencing decisions.

All this activity is making an impact and we hope the response will be strengthened further by the measures, commencing on Monday, that the Home Office included —at the prompting of the noble Lord, Lord Faulkner—in the LASPO Act 2012. These measures include: the prohibition of cash payments to purchase scrap metal, which will bring greater traceability for those selling metals—I assure the noble Lord, Lord Rosser, that cheques given in payment need to be crossed, and a paper trail will still exist even in the circumstances that he described; increasing the financial penalty for offences in the Scrap Metal Dealers Act 1964; and revising the police’s powers of entry into unregistered scrap metal yards, which was an anomaly that I think all noble Lords accept was one of the biggest difficulties for the police.

The noble Lord, Lord Faulkner, asked how these measures will work. The Home Office has worked very closely with the British Transport Police and ACPO to deliver guidance in relation to the new provisions that come into force on Monday. We are confident that they will make a difference.

The Bill has been refined in its passage through the other place and I believe that it now provides effective and proportionate regulation of the scrap metal sector. The Bill has many important features. I will not talk about each one but will limit myself to what I consider to be the most important. The Bill will allow for local authorities to properly manage this sector, allowing them to decide who should and should not be licensed. The fee covers not just the costs associated with administering the licensing procedure but the enforcement that is involved for local authorities. Although the guidance will be given by the Secretary of State and we expect local authorities to abide by that, we anticipate that local authorities will be able to recover the costs that this Bill imposes upon them.

The Bill will also provide much needed closure powers to tackle unscrupulous dealers who operate without a licence. My noble friend Lord Greaves asked what “residential premises” are. No definition is provided in the Bill; it would be for the police to decide whether premises were predominantly used as a home or were business premises. This will be a question of substance rather than superficial appearance. I hope that that provides some answer to my noble friend on that issue.

The Bill will also require scrap metal dealers to record fully the metals that they are purchasing and disposing of, as well verifying the identification of the people with whom they transact. The Bill will end the exception for itinerant collectors, which the Government no longer wish to continue. Finally, the Bill will integrate the separate regulation for motor salvage operators with the scrap metal sector.

I know that the Bill was written and developed following close consultation with many legitimate scrap metal dealers, who, as the House knows, fully support the Bill. The Bill strikes the right balance between supporting legitimate operators and providing powers to tackle those who wilfully break the law. It should contribute to raising trading standards across the whole of the scrap metal sector. It will restrict the market for stolen metal that part of the industry currently offers. As noble Lords will know, there is a point at which stolen metal enters this trade, and it is sealing off that point of entry that the legislation is designed to do. The Bill will provide local authorities and the police with the powers they need to tackle businesses that operate illegally. The Bill will build on good practice already used by parts of the industry, such as strengthening the record-keeping requirements that have formed the key component of the successful Operation Tornado.

A number of noble Lords, including the noble Lord, Lord Rosser, and my noble friend Lady Hamwee, asked about the commencement of the provisions of the Bill. As has been said in guidance, it is recognised that around six months will probably be needed for local authorities to have in place the necessary provisions so that licensing can commence. Subject to any requirement to adhere to common commencement dates and the introduction of regulations, the dates are mandated by BIS, so we need to work this together. However, it is the Government’s intention that the Bill should be effective and brought into play as quickly as possible.

The response to metal theft does not rest with this Bill, but I remain convinced that the only long-term response to metal theft is to introduce a new, more robust system of regulation for the scrap metal sector, which is what this Bill is designed to achieve. I am delighted that it has been welcomed by all corners of the House.

[Lord Faulkner of Worcester]

My Lords, there was a suggestion that the Government intended to move an amendment in Committee to insert a sunset clause into the Bill. The Minister has not referred to that, and I cannot see why it should be necessary when one views Clause 18, which provides for review after five years. Is the Minister able to clarify that?

[Lord Taylor of Holbeach]

The noble Lord is right about the review, but my honourable friend the Minister for Crime Prevention, Mr Jeremy Browne, made a commitment to insert a sunset clause into the Bill. I imagine the details of that will be presented to this House in Committee. That provision was agreed by the Government during the Bill’s passage through the other place. I am pleased to confirm that. It was alluded to earlier by the noble Lord, Lord Rosser.

I was in full-flight oratory, saying how much I welcome the support of the House at this Second Reading. We all wish the Bill well. It is designed to tackle an abuse that we all condemn. The Government give the Bill their full support.