Scrap Metal Dealers Bill

James Brokenshire Excerpts

Friday 13th July 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

May I begin by congratulating my hon. Friend the Member for Croydon South (Richard Ottaway) on his second place in the ballot and on introducing this Bill on a subject that rightly interests all hon. Members? Hon. Members from across the House vividly described the impact of metal theft on communities, so it is right that we had the opportunity to debate these issues this morning. There is a great deal of consensus on the nature of the problem, the scale of its impact and the need to examine solutions to deal with this crime, which is adversely affecting many of our communities, and that has been reflected in debates in this House over a number of months.

Some issues do deserve further scrutiny, as my hon. Friends the Members for Bury North (Mr Nuttall) and for Shipley (Philip Davies) have identified, but I believe that they can be dealt with in Committee and that the Bill addresses a number of significant issues and concerns that have been raised. Although I take on board the effect that initiatives such as Operation Tornado have had—it is important that we recognise that—they can take us only so far. In order to get a universal approach—universal buy-in—legislation is required. I believe that there is broad recognition of the fact that the Scrap Metal Dealers Act 1964 is no longer fit for purpose, which is why it is appropriate that we are considering these matters in detail and why my hon. Friend the Member for Croydon South is right to introduce his Bill today. It deserves fair consideration and a fair hearing, and the support that I hope there will be from hon. Members from all parts of the House.

The Bill is not a silver bullet, as my hon. Friend rightly said. We need to take a balanced approach between enforcement, prevention and disruption, but the legislation contemplated in the Bill is important in addressing a number of those elements. This is about being balanced within a broader framework of enforcement. The investment that the Government have provided through the metal theft taskforce is a significant step forward in seeking to deal with the intelligence and to build partnerships together. The right hon. Member for Delyn (Mr Hanson) highlighted the issue of exports, and he was fair and right in putting the matter in that broader context, too. However, his comments showed why intelligence is also being co-ordinated. I hope that what we are doing will telegraph some further support for the National Crime Agency, as that proceeds, in harnessing intelligence and ensuring a cohesive, co-ordinated approach to dealing with serious and organised crime.

The 1964 Act is widely seen as being outdated and in need of reform, and as not reflective of the current £5.6 billion industry. It is important to recognise the wide support that the Bill has already attracted. We have heard clearly about the impact that metal theft has had on churches, cathedrals and other places of worship. Notably, the Archbishops Council of the Church of England has given its support, recognising the steps the Government have taken and saying that

“now is the time to support the introduction of new legislation for the scrap metal trade.”

The Local Government Association highlights the fact that nine in 10 councils are affected by such crime and says that further steps are required, that there is a need to introduce further regulation and that it supports the proposals for local authorities to have that stronger say in and control over the licensing of scrap metal dealerships.

My hon. Friend the Member for Shipley highlighted the importance of contributions made by the British Metals Recycling Association, and it is important to note that Ian Hetherington, the director general, has said:

“The Private Member’s Bill will help close the numerous loopholes present in the current regulatory framework that will enable stolen metal to continue to be sold for cash and bolster unlicensed operators at the expense of compliant businesses.

BMRA hopes the Bill makes swift progress through the legislative system in order that the full range of regulatory measures can be implemented in a single process to avoid confusion for the industry and for the police, Local Authorities and other enforcement agencies.”

There is broad consensus across a number of different parts of the industry as well as law enforcement and other agencies, and that is reflected in the Bill. It is therefore important to recognise the impact of metal theft.

The incidence of metal theft has increased rapidly in recent years and the Home Office estimates that there were between 80,000 and 100,000 reported metal theft offences in 2010-11, costing the UK economy some £220 million to £260 million a year. That is one estimate, but I also recognise that there are higher estimates. The Association of Chief Police Officers provided an estimate of as much as £777 million when the costs of the direct result of infrastructure disruption are also factored in.

We see the impact on so much of our infrastructure, on power companies and on our rail infrastructure, as we try to get around when signalling has been disrupted as a consequence of metal theft. Only this week, we saw 89 homes without power in Stockport following an attack at a local substation. We simply cannot put a price on the costs incurred by members of the public and businesses as a result of the disruption. It is not just about infrastructure, however. Our churches and our community monuments feel the impact of this appalling crime. In London, 16 brass plaques from different monuments and cemeteries have been stolen over the past two years, including from my own constituency in Sidcup. The plaques remembered more than 15,000 war dead. We also saw the shameful theft of the river of life memorial plaque to Johnathan Ball and Tim Parry in Warrington and the destruction and theft of Barbara Hepworth’s bronze sculpture from a south London park over the new year. That sculpture was insured for £500,000.

Such crimes are wanton, selfish and callous and show no respect for our communities. Frankly, those who are responsible deserve our contempt. I point out to those watching our debate this afternoon the personal impact of the crimes. I do not think that anyone present in the House today could have been anything other than moved by the speech made by my hon. Friend the Member for Croydon Central (Gavin Barwell) about the personal and emotional impact of these crimes. That is why it is important to take action to deal with such incidents.

I know that the police have undertaken considerable work to identify where stolen metal is being sold and where it is going to. The UK is a major exporter of scrap metal, with more than 9 million tonnes of metal leaving the UK legally last year. Although we must be aware of the risk of stolen metal being directly exported, we believe that the vast majority of stolen metal is still being laundered through the scrap metal industry. It is therefore right that our attention should be focused on that industry and it has become clear that the regulation is woefully outdated and in desperate need of reform.

However, I put it clearly on record that the industry does vital, good work, and clearly benefits our economy. We should recognise that there are many reputable scrap metal dealerships, but the industry itself acknowledges that to protect the legal part of the industry and raise the bar, legislation and further regulation are required.

The Government have already taken action, both operationally and by making some initial legislative changes. As Members will know, in the previous Session the Government made initial legislative approaches in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which received Royal Assent in May. It prohibits cash payment for scrap metal, amends police powers of entry to unregistered scrap metal sites, and increases the financial penalties for offences under the Scrap Metal Dealers Act 1964. We anticipate that those measures will be brought into force in the autumn.

However, we did say that that was a first step, and we always considered the 1964 Act to be outdated and in need of reform. That is why the Bill is important. Through the private Member’s Bill introduced by my hon. Friend the Member for Croydon South, we have an opportunity better to regulate the industry. The Act is ineffective and needs change. It does not reflect the 21st-century scrap metal industry, and the materials that dealers now purchase. It does little to ensure that dealers maintain accurate records of transactions, or verify a seller’s identity. The Act merely requires records of transactions to be made. It does not enable a local authority to refuse to register a dealer, or to remove a dealer from the register, if that dealer is not suitable to operate as a scrap metal dealer. Nor does it provide any powers to close unregistered businesses. Scrap metal dealers can register at no cost, so local authorities cannot cover their costs. There is also the issue of itinerant collectors, which is largely an issue of enforcement. Many of the people who go round with vans have not registered with local authorities or been recorded by the police, as is required under the legislation. That needs to be addressed as part of broader reforms, and to be covered by a broad legislative framework.

In effect, the Act does little to stop the purchase of stolen metal or encourage higher trading standards across the industry. The Bill before us will change that, by putting in place a more robust, local authority administered, licensing regime for the scrap metal industry. It is right to allow only those individuals and businesses that are considered suitable to operate as scrap metal dealers. The test for suitability should mirror the one used by the Environment Agency in relation to its environmental regulations, and should include a consideration of all relevant unspent convictions. That will support law-abiding scrap metal dealers, while ensuring that elements in the industry that are only too happy to purchase stolen metal can be effectively tackled and closed. The Home Office agrees that the licensing authority should be the local authority, rather than the police, the Environment Agency or some other local body.

It is right to introduce a fee, so that local authorities can recover the cost of administering and seeking compliance with the regime. That should ensure that the regime is effectively managed, and that illegal operators can be tackled. The Home Office has been working with the Local Government Association to cost that licensing fee. We believe that it will be a reasonable fee that will not be disproportionate. It will cover local authority costs relating to the administration of, and compliance with, the regime. It is right and proper that details of that should be provided clearly in Committee, so that the industry is cognisant of how a proper balance will be achieved.

It is important to note the requirement for verification—a point that the right hon. Member for Delyn highlighted. I point to the reference in the explanatory notes to how identity could be verified; it could be done through documentation including passports, driving licences, and bank and utility documents, but not identity cards, which this Government did not consider an appropriate measure. That is why it was one of the first things we scrapped. If the right hon. Gentleman is interested in issues that have not hung around for very long, I challenge him back on that topic.

It is important to note that the Bill will provide powers to close unlicensed scrap metal dealers. The regime will provide for the courts to close premises that should not be operating—the ultimate sanction.

The Bill has been widely called for by Government Departments aware of the need to regulate the industry, by parliamentarians, not least through the Commons motion passed in February, by law enforcement organisations, by victims of metal theft, by public and private industry and those who represent the third sector, and most notably by the scrap metal industry itself. The Government believe that action will be limited without necessary reform to regulate the scrap metal industry. The private Member’s Bill tabled by my hon. Friend the Member for Croydon South provides us with the opportunity to make the necessary changes. We must seize the opportunity, and I hope that all Members of the House will support this much-needed reform.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63.)