Scrap Metal Dealers Bill

David Nuttall Excerpts

Friday 13th July 2012 Commons Chamber

[Philip Davies]

That may well be the case. Of course, there is no compulsion on anybody to make cash transactions. If a business does not want to trade in cash, it is perfectly at liberty not to do so.

The Government may well have changed their tune slightly on the subject. Their views on reform were recorded in their written evidence to the Transport Committee in November last year, in which they said that

“Against that”—

that is, calls for action on the issue of scrap metal theft through regulation—

“it would be necessary to consider carefully the additional burden which new regulation might put on legitimate businesses, and the extent to which the disposal of stolen metal might still continue on an illegal basis. Given the Government’s general aim to reduce and simplify regulation, there would need to be a strong case made to justify any new regulation.”

The Government were wise to sound a note of caution, as regulation is not always the way forward, yet more regulation is proposed. I am not entirely sure that it is entirely justified. More importantly, I am not entirely convinced that it will stop metal theft. We may end up with a lose-lose situation: the regulation will punish not just the bad scrap metal dealers, but all of them.

[Mr David Nuttall (Bury North) (Con)]

My hon. Friend makes a compelling case. He may have seen the British Metals Recycling Association’s briefing on the Bill. Somewhat surprisingly, perhaps, it seems to be in favour of funding the Bill and its provisions through “a small licence fee”. Does he share my concern that, often, what starts off as a small licence fee soon becomes a very large licence fee?

[Philip Davies]

My hon. Friend is absolutely right to make that point. We have seen many examples where a local authority is given a small amount of power, and, before we know it, it is expanding and empire-building at every possible opportunity, and increasing costs on a salami-slice basis. Before we know it, an industry that thought it worth paying a small cost to deal with a problem finds that there is still a big problem, but its costs have gone up hugely and show no sign of abating.

[Philip Davies]

I am grateful for that clarification. Let us just hope that we always have sensible people in the Home Office. Clearly, we can have confidence at the moment: I see the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), is on the Front Bench. I do not want to alarm him unduly about his career prospects, but Ministers come and go, and although we may have confidence in this Minister, I am not sure that I share the faith of my hon. Friend the Member for Croydon South that every future Home Office Minister, whatever their party, will show the same wisdom as this Minister in setting the regulations.

As I was saying, the Bill would affect legitimate businesses. It is worth showing the other side of the industry, because there are good operators in it, as some newspaper stories show; unlike my hon. Friend, I am a big fan of the media, so I am sure that these stories are true. Let me set out one case involving a scrap metal dealer. I am sure that this happens time and again; I am picking out just one example, as the House would not want me to go through every single newspaper report of this kind. I use this story as an illustration. A scrap metal dealer called the police when he was asked to purchase a war memorial from offenders. When Lana Jane Clitheroe and Paul David Kelly pleaded guilty to stealing from a war memorial in St Mary’s church on Lewisham High street, the district judge, Julia Newton from Bromley magistrates court, said in her sentencing remarks:

“A scrap metal dealer was approached by the Defendants; he very quickly realised what the item was and refused to accept it.”

He alerted the police to the problem, so that they were able to catch the offenders.

Many legitimate scrap metal dealers are part of the solution to the problem. They do not want to be involved in any illegal activity and to take things that have been stolen, and they play a crucial role in alerting the authorities to the problem. I feel nervous about saying to the scrap metal dealer who was involved in that case, “I will treat you as if you are potentially involved in criminal activity, and put on you a huge new burden and cost.” What has that person done wrong? What has he done to deserve that? He is part of the solution, not the problem.

Another scrap metal dealer

“donated £21,000 to replace metal plaques stolen from a war memorial in south London.

Fourteen bronze plaques bearing the names of 243 World War I servicemen were stolen from Carshalton war memorial in Sutton in September 2011.”

The scrap metal dealer

“said he was as ‘outraged as everyone else’ that it had been ‘plundered’.”

These are good people—people whom we should be trying to help, and whose side we should be on. The Bill would impose on those people huge burdens and extra costs. What have they done to deserve those extra burdens and costs? Nothing, as far as I can see. We are castigating a whole industry because of some people who are operating illegitimately in that industry. My solution is to go after the criminals. Let us pursue criminals, not a whole industry, which includes some very good people who are not criminals at all.

On bringing offenders to justice, we can use the Theft Act 1968 to charge unscrupulous scrap metal dealers with handling stolen goods. There is already a law with which to tackle the problem of people who handle stolen goods. In addition to using all the existing scrap metal legislation, we should use the Theft Act to prosecute those who accept stolen scrap metal and pass it on. It states:

“(1) A person handles stolen goods if (otherwise than in the course of the stealing) knowing or believing them to be stolen goods he dishonestly receives the goods, or dishonestly undertakes or assists in their retention, removal, disposal or realisation by or for the benefit of another person, or if he arranges to do so.

(2) A person guilty of handling stolen goods shall on conviction on indictment be liable to imprisonment for a term not exceeding fourteen years.”

That is already on the statute book. If a scrap metal dealer is found guilty of handling stolen goods—the definition in the Theft Act makes it perfectly clear that someone handling stolen metal is guilty of handling stolen goods—it is already in statute that they can be sent to prison for a term not exceeding 14 years.

If we actually gave proper sentences, and sentencing guidance was strengthened, so that the provisions in the Theft Act were invoked and a few 10-year-plus sentences were handed down by the courts to these people, we would find a vast drop in the number of scrap metal dealers handling stolen goods, without imposing any kind of extra licensing regime, bureaucracy, or cost, and without giving local authorities more police-like powers to interfere in every nook and cranny of people’s businesses. Let us just start handing down some proper sentences to these people; we will find that some people go legitimate very quickly indeed.

If someone walks off the street into a scrap metal dealer with a chunk of railway line in their hand, or a £500,000 statue or a huge great war memorial in a van, and the scrap metal dealer accepts it and pays them a few pounds for it without any questions asked, the scrap metal dealer should be prosecuted under the Theft Act. If the police and the Crown Prosecution Service cannot get a conviction for that, it says more about our criminal justice system than about anything else.

[Mr Nuttall]

Has my hon. Friend heard anything in the debate so far or read anything in the Bill that would give him any confidence that the new regime, once it came into force, would be any more capable of being enforced and securing convictions than the present one?

[Philip Davies]

No. That is part of the problem. My hon. Friend makes a good point. When politicians are faced with a problem, their solution always seems to incorporate two ingredients. The first is that they must be seen to be doing something. It is the bane of all politicians. The second ingredient is that what they propose must not offend anybody. As long as a politician has a solution that looks as though they are doing something and it does not offend anybody, whether it does any good or not, they will go down that road every time. Rather than looking as though we are doing something and being tough, I would like us to spend a little more time looking at whether the proposed course of action will work and whether it is absolutely necessary. I am not entirely sure that the Bill passes that test.

On offender profiles, according to the Transport Committee in its 14th report of January this year, which was on cable theft from railways,

“Perpetrators can be broadly split into two groups; small-scale, local offenders and organised crime groups. We heard from the BTP”—

the British Transport Police—

“that local criminals were responsible for the majority of thefts from the railway, these being ‘opportunist but nonetheless professional criminals’…and that up to 80% of those arrested for metal theft have previous convictions for similar crimes.”

Here we hit the problem: 80% of the people caught for metal theft have previous convictions for metal theft. The police have done their bit. Under the current regulatory regime, the police have got these people, and what happens? The perpetrators get a derisory sentence from the courts and they are back out on the streets stealing metal again in five minutes flat. So it is not the regulation, but the sentencing of these offenders that is the problem.

Metal theft has recently been included in the serious organised crime strategy. The British Transport Police welcomed this but noted that a maximum of only 30% of cable thefts involved organised criminal gangs. Chief Inspector Carl Burkey, of Airedale and North Bradford police, which is my local police division, said in March this year:

“We have been pleased to take part with partners and reinforce the message locally that officers are working hard to frustrate the sale of stolen metal in Airedale and North Bradford.

Metal theft is a crime which can be life threatening to thieves and seriously disrupt commuters when it affects rail services, and it is important that scrap dealers remain vigilant when offered stolen metal. We will…work closely with all partners and would urge anyone who has information about metal theft to contact ourselves or Crimestoppers.”

One of the main solutions to the problem is for members of the community to be the eyes and ears on the ground—that is what my police chief inspector said—and to report any suspicious activity that they see. When that happens, the police are quite successful in catching the perpetrators.

We come back to sentencing. Metal theft and handling should be seen as an aggravating part of the sentence, taking into account the disruption or the severe sentimental loss that such crimes cause, particularly in the case of my hon. Friend the Member for Croydon Central (Gavin Barwell). I referred earlier to District Judge Julia Newton from Bromley magistrates court when she sentenced a pair who had stolen a war memorial in Lewisham. She also said:

“The war memorial is described by Father Scott Anderson, the Vicar of St Mary’s Church. He believes the memorial plaque had been in the church since approximately 1920-1925. The plaque displayed the names of some of those who had fallen in the First World War. It is described as being a large and heavy plaque, approximately 1.25 metres high and 1.75 metres tall. The impact of the loss of the plaque is described by Father Anderson. The stolen plaque is expressed to be invaluable to both the Church and the families whose relatives’ names appear on it. He cannot even estimate the value. He describes the feeling amongst the members of the Church and Local Community as being both ‘in shock and saddened.’

Those named on the memorial are remembered by family, relatives and fellow countrymen. The desecration of the memorial will be seen by many as an affront. The historic value of the plaque is incalculable.

The seriousness of this offence is determined not only by the culpability of the Defendants, but also the harm caused. This offence was committed without a thought for the impact that their actions would have on individuals or the wider community. In assessing the harm caused, it is not simply the monetary loss in replacing the memorial which is to be taken into consideration, but the public feeling of many as described by Father Anderson.”

The judge took all that into account and said that the risk of re-offending was assessed as high. She said that she took the view that the offence was so serious that only a custodial sentence was appropriate. Bearing all these factors in mind, the sentence of the court would have been 180 days in custody, but because the offenders had pleaded guilty, it would be reduced by one third. The sentence would be 120 days imprisonment. That seems to rank high in terms of the sentences handed down by the court for this type of crime. I therefore praise the judge for bearing all those circumstances in mind as aggravating factors when she came to sentence the offenders. I encourage judges to do more of that, so that sentences are more of a deterrent.

[Mr Nuttall]

My hon. Friend’s expertise in these matters is well known. Perhaps he will be able to confirm that although a sentence of 120 days imprisonment was handed down, it is highly unlikely that the criminals would have served anywhere near 120 days in prison.

--- Later in debate ---

[Mr David Nuttall (Bury North) (Con)]

As always, it is a great pleasure and honour to follow my hon. Friend the Member for Croydon Central (Gavin Barwell)—it is a Croydon day today, is it not? He made some moving points, and the whole House will have been moved by what he said about his personal experience of the effect of metal theft.

Whether we have been affected personally, as my hon. Friend has, or just read about the problem in the papers, we all know that metal theft affects everybody. Some people may have been stuck on a train that has been delayed because the tracks have been taken up and destroyed. Even though a particular church might not have suffered any metal loss, it will still suffer from having to pay increased premiums as a result of thefts from other churches.

There is no doubt that there is a problem, but I rise to express concerns about the Bill. I will not repeat everything that my hon. Friend the Member for Shipley (Philip Davies) said, because he did a thorough job of going through the problems that could arise with the Bill, and because those problems might well be dealt with in Committee.

I congratulate my hon. Friend the Member for Croydon South (Richard Ottaway) on his success in coming second in the private Member’s Bill ballot, which has given him a place at the top of the agenda this morning. Although the Bill is a private Member’s Bill, it has much the look of a Government Bill—it has 20 clauses and two fairly lengthy schedules. That is perhaps not a surprise, because, as we know from the House of Commons note, the Bill is a handout Bill. The note helpfully describes a handout Bill as a Bill offered by the Government to a Back-Bench MP to take forward as a private Member’s Bill, and states:

“These are usually Bills for which the Government has not been able to find time in its”—

legislative—

“programme or, for some other reason, it does not want to present itself.”

I do not know why the Bill is not a Government Bill, but perhaps we will find out when we hear from the Minister. I can think of at least one Bill—namely, the House of Lords Reform Bill—that could be jettisoned so that the Government can find time for the House to consider a Government scrap metal dealers Bill. People outside would be much happier for the House to discuss a problem such as that caused by the theft of metal.

[Mr Hanson]

Just so the hon. Gentleman is clear, the Government made proposals in a previous Act in the previous Session but rejected the measures in the Bill. The Government therefore made a political decision in the previous Session not to proceed with the provisions. They are supporting them in this Session because of pressure from Back-Bench Members such as the hon. Member for Croydon Central (Gavin Barwell).

[Mr Nuttall]

I am grateful to the right hon. Gentleman for clarifying that point. It will be interesting to hear whether the Minister takes that view when we hear from him.

Metal theft is doubtless a serious problem, but it is also an increasingly high-profile problem. The Association of Chief Police Officers estimates that metal theft costs the UK economy approximately £770 million a year. The British Transport police, who have the lead policing responsibility for metal theft, experienced 2,000 incidents in 2010-11, up some 33% compared with the previous year.

The reason for the increase in metal theft is largely tied to the international scrap metal price. A useful diagram in House of Commons Library research paper 12/39 demonstrates that. The graph shows that there is almost an exact correlation between the level of metal theft and the price of metals on the international market. The increase in the price of metal on the international market has led in recent years to an increase in the problem of metal theft.

I am sure all hon. Members would like to see an end to the problem, just as we would like to see an end to all other forms of crime that cause so much damage to our society, and I am absolutely sure that the promoter of the Bill, my hon. Friend the Member for Croydon South, and its six sponsors, are entirely well meaning. I have great respect for their views.

I mentioned that scrap metal theft is a particular problem for churches. The Ecclesiastical Insurance Office, which deals with church insurance, wrote to me on 6 July seeking my support for the Bill:

“Metal theft is an on-going epidemic in this country. Since 2007, the problem of mindless criminals stealing metals from churches, schools, heritage properties, railway lines and even hospitals has continued to rise as the demand for such metals on world markets has increased. 2011 was the worst year on record for the number of metal thefts from churches with some churches in this country now being targeted for more than 10 times in the space of only five years.”

As a church warden of my parish church, I ought to declare an interest. We are as concerned as anyone about the increasing cost of insurance. Many examples have been mentioned—war memorial plaques stolen, chaos on the railways, churches desecrated—but the scrap metal industry is already extremely well regulated. Society has long accepted the need for regulating the industry. The Scrap Metal Dealers Act 1964, which the Bill would replace, repealed the Old Metal Dealers Act 1861 and several other Acts. So the regulation dates back well over 150 years.

It is already an offence to steal metal under the Theft Act and to handle stolen goods, so we need to examine why these offences continue, given that apparent deterrents are already on the statute book. The existing regulation is not driving out the rogues from the industry, so what will make the new regulations any more successful? The Legal Aid, Sentencing and Punishment of Offenders Act 2012 received Royal Assent just 74 days ago, but has not come into force yet, so we do not know what effect the increased penalties will have.

One fundamental change to the regulatory regime will be the introduction of a scheme of registration and identification similar to the one requiring solicitors to ascertain the identity of their clients for the purposes of money laundering legislation. I had some experience of conducting such tests when I practised as a solicitor, and I know only too well the rules and regulations dealing with money laundering and the detailed information about clients that has to be kept.

I note that the Bill does not state what sort of identification will be sought from those seeking to sell scrap metal, but leaves it open for future debate. No doubt that is one of many matters that we can consider in more detail on Report. However, being able to establish someone’s identity is not quite as straightforward as some people might think. Very often people will come without any form of identification, which will no doubt cause inconvenience at the very least, when they are told, “I’m sorry, I can’t pay for your scrap because you’ve not got any identification,” and they will be sent away. They might scrub about in their pockets and pull out a credit card, but that will not have their address on it and so will not be satisfactory, so they will go away disgruntled and have to find further proof of who they are before they can return. It remains to be seen, but I suspect that the evidence will have to be photographic—a passport, a driving licence with a photograph on it or some other photo ID—so that the person conducting the check can verify that the person whose identity documents have been produced is indeed the person before them. The matter is therefore not quite as straightforward as people might otherwise think.

As has been said, a lot of action has already been taken to try to sort the problem out. We have heard that in November 2011 the Government announced the establishment of a dedicated £5 million national taskforce, led by the British Transport police and comprising officers from across England and Wales whose job it would be to target metal thieves and scrap metal dealers trading illegally in stolen metal. The taskforce’s first steps apparently included a programme of action to target scrap metal dealers suspected of trading illegally in stolen metal. At that time, the Government said they would consider longer-term options to tackle the problem of stolen metal being traded too easily in the scrap metal industry. As we have seen, the Government then changed the Legal Aid, Sentencing and Punishment of Offenders Act 2012, increasing the fine available under the Scrap Metal Dealers Act 1964 to

“level 5 on the standard scale”—

that is, a fine not exceeding £5,000—and introducing a new criminal offence that prohibits cash payments.

All that has not really had a chance to work; nevertheless, we are now faced with the possibility of new legislation, and we have to consider whether it will be successful. Clause 20(1) states that the Bill applies only to England and Wales. One does not have to be Einstein to work out that the Bill risks creating a possible loophole that those involved in underhand, illegal and criminal activities of this nature will quickly spot. It is that people would simply go to Scotland or Northern Ireland to dispose of their ill-gotten gains. Before anyone intervenes on me, I should say that I accept that Scotland is looking at the problem and that it might well come up with a similar set of rules and regulations to those that we have here in England. I do not know whether Northern Ireland is going down a similar road. Nevertheless, if this Bill is to be successful, discussions will need to take place between the other constituent parts of the United Kingdom on what they are doing to tackle the problem.

If the Bill is successful, it will repeal the Scrap Metal Dealers Act 1964, but there is no doubt that it will also increase the level of regulation. That is what it is all about. Its raison d’être is to create more rules and regulations to restrict the opportunities for those involved in criminal behaviour to get away with it. That brings me to the Government’s one in, one out policy, which I strongly support. What regulations will be scrapped to make way for the creation of these new ones?

The Government’s report, “One-in, One-out: Third Statement of New Regulation”, that was issued in February this year shows that, unfortunately, the Home Office does not appear to be doing too well in the league table. According to annex A of the report, its contribution to the overall total was a negative one. It had three “ins” and only one “out”, and the zero net cost is listed as 5. In terms of the annual regulatory cost to business, the Home Office’s “ins” cost £50.8 million, with an “out” cost of only £0.83 million, leaving a net balance of £49.97 million. I submit that the Bill will only leave the Home Office further marooned at the foot of the one in, one out league table.

That leads me to the benefits of increasing regulation in the scrap metal industry, and to ask how successful that will be. In this regard, I am obliged to Philip Booth’s blog posted on the Institute of Economic Affairs website on 5 January. He writes about the fact that the regulation designed to tackle money laundering is being recycled for the scrap metal industry, and relates the views of the British Transport police on the matter. His blog states:

“The British Transport police go on to say: ‘My serious belief is that if you put those measures in place, Johnny in the white van isn’t going to want to turn up, produce his passport or his driving licence and proof of where he lives so we can then very quickly check where [his metal] comes from.’ Precisely…This will be the case whether Johnny in the white van is a builder or a criminal—the two will be treated exactly the same. The naivety of the proposals is stunning. Already, about ten per cent of economic activity in developed countries takes place in the shadow economy and serious work suggests that regulation and taxation are a major cause of this. Whilst Johnny Plumber in the white van may just decide to dump his scrap in landfill rather than have it recycled, Johnny Criminal will turn to the black market which will thrive. Indeed, Johnny Plumber may decide to become a criminal himself and use the black market. So, as ever, well-meaning measures lead to more stress on the natural environment, more business costs, more criminality and the people who it is designed to hit will just carry on as normal in a thriving criminal world.”

There is therefore a real danger that the Bill will not be as successful in tackling the problem as its promoters hope.

A number of changes to the regulatory regime have already been passed, but have not yet come into force. Also, Operation Tornado has certainly been relatively successful. We know that from the debate in this Chamber on 18 June, when the Minister said that

“Operation Tornado, a voluntary scheme supported by the British Metals Recycling Association”

had been so successful that it had reduced metal-related crime

“by half in the first three months of 2012 across the three north-eastern police force areas of Northumbria, Cleveland and Durham.”—[Official Report, 18 June 2012; Vol. 546, c. 718.]

In anybody’s book, that is pretty impressive. If such a level of success could be rolled out across the country, that could be just as beneficial to society as the measures in this Bill.

Let me repeat my support for some of the remarks on sentencing made by my hon. Friend the Member for Shipley. There is a problem if the risk of being detected is low. If people think they can get away with crime, they will be more likely to be tempted down the criminal path. Secondly, we must have stronger sentences that actually act as a deterrent to criminals. We need honesty in sentencing, too. I remember the days when it was Conservative party policy to have honesty in sentencing, and I look forward to that once again being the case, so that when someone is sentenced to six months in prison, they spend six months in prison, and when they are sentenced to five years, they spend five years in prison.

I trust that the concerns that my hon. Friend and I have raised will be looked at when this Bill goes into Committee, and I assure the House that its measures will be examined very closely on Report.