Scrap Metal Dealers Bill

Lord Faulkner of Worcester Excerpts

Friday 30th November 2012 Lords Chamber

[Lord Faulkner of Worcester]

My Lords, I offer my congratulations and thanks to the noble Baroness, Lady Browning. I congratulate her on introducing the Bill with such skill, and I thank her for the very kind things she said about my contribution to this issue over the past year and a half or so. I am delighted that she has taken on the responsibility of piloting the Bill through your Lordships’ House. There is no better champion for it. In the regrettably all-too-short time that she was a Minister in the Home Office, she demonstrated commitment and sureness of touch on this issue. I have seen some of the letters that she wrote in support of measures that are not very different from those that are contained in the Bill before she left office in September 2011.

I also congratulate the honourable Member Richard Ottaway for his patience and skill in getting the Bill through the other place. There was a very trying final day when it looked as though some of his honourable friends might have sought to talk the Bill out. Happily, that did not happen, and the Bill is in front of us today in a form that I hope the whole House will be able to support. As the noble Baroness said, the Bill is supported by all responsible members of the scrap metal and recycling industry, by numerous trade bodies, the Local Government Association, the British Transport Police and the civilian police.

The noble Baroness referred to the fact that I raised the issue of metal theft in 2011. In October, I put a Question to the noble Lord, Lord Henley, whom I am delighted to see in his place, and I look forward to his speech. It was on cashless transactions, a cause that I pursued in March this year with an amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill. I was happy to accept the Government’s alternative version, despite the inclusion of exemptions for itinerant sellers and motor salvage operators, the logic of which I never understood, and which I am happy to see disappear in this Bill.

The cashless provisions of the LASPO Act finally come into force this Monday, 3 December, and I would be most grateful if the Minister, when he replies, could give some indication of how he expects these measures to work. The measures in the LASPO Act were never intended to be the last word, and we all agreed that nothing short of a rewriting of the Scrap Metal Dealers Act 1964 would do. That is exactly what your Lordships have in front of you today. There is no need to go through the provisions of the Bill clause by clause. We will have the opportunity to do that if we have a Committee stage, although I hope it does not take too long or delay the Bill’s passage.

The need for the Bill is undeniable for all the reasons that the noble Baroness, Lady Browning, said. I am sure that I am not alone in having received persuasive briefing from organisations as diverse as the Local Government Association, the Energy Networks Association, Network Rail, the British Metals Recycling Association and Alchemy Metals. All of them, without exception, fully support the Bill, and I have had no representations expressing a contrary view. It is worth putting on the record some of the points that they have made. I shall do so without repeating any of the points that the noble Baroness has made. The Local Government Association, for example, says that it carried out research into the levels of metal theft experienced by councils between April 2009 and early 2012. Only one in 10, or 12%, of respondents had not suffered any metal thefts. The Local Government Association says:

“Not only is there disruption to public transport, there is also the theft of lead from schools and other council buildings, the desecration of war memorials, along with the loss of bus shelters, street signs, and manhole and gully covers. This puts members of the public at risk of serious injury or harm and imposes a further financial burden on councils in replacing the stolen property”.

The Energy Networks Association reports that there continue to be deaths as a result of attempted metal theft, including a 16 year-old boy killed trying to steal earthing cable from an underground trench. He was aided by two other boys and, it is assumed, others to remove a 1.5 tonne concrete block used to access the trench for maintenance. Another example is of a father and son who had cut down a wooden pole to steal cable. The son was fatally electrocuted while trying to coil up the cable and his father suffered burns to the hands and arms. On presenting himself at hospital he denied all knowledge to the police that his son had been killed or that he had even been there.

Network Rail says that incidents of cable theft were responsible for,

“causing nearly 22,000 hours of passenger delays in past four years and costing the rail industry £61 million”.

I am sure that there are very few Members of your Lordships’ House who use the railway who have not been delayed as a consequence of theft of signalling cable.

The company Alchemy Metals has written to me to say,

“the 1964 Act … is abundantly unfit for purpose. The removal of loopholes such as the Itinerant Trader and Motor Salvage Operator exemption must now pass to law as a matter of urgency. This, combined with further police powers and a comprehensive registration system will give the relevant authorities and the scrap industry itself the powers needed to combat metal theft once and for all”.

Amid all this gloom there is a little heartening news, which the noble Baroness referred to. That is the success of Operation Tornado, for which the noble Lord, Lord Henley, certainly deserves credit, and the activities of the National Metal Theft Taskforce programme, announced by the Government on 29 November 2011. That received funding of £5 million for extra operational activity to tackle metal theft. The lead in this was taken by the British Transport Police, which set up a central team to manage the programme and provide dedicated co-ordination and support in each region of the country. The taskforce programme has financially supported the pilot of Operation Tornado and the implementation of Tornado tactics by forces and agencies across the country. It is an enhanced identification initiative agreed by the British Metals Recycling Association and the police. Of the forces providing figures, 72% of yards have signed up to Operation Tornado.

What has been the effect on metal theft? The British Transport Police tell me that there has been a decrease in reported metal theft of 52%. This is particularly good news for Network Rail, as it has led to a reduction of 59% in the total amount of delay minutes and has reduced the company’s compensation payments by £5.6 million. I understand that the Ecclesiastical Insurance company has reported that the number of claims for theft of metal from church buildings have fallen sharply; no doubt we will hear more about this from the right reverend Prelate the Bishop of London, whose speech I am also very much looking forward to.

If we look at the national average reductions achieved in reported metal crime, currently 38%, and make a comparison with the figures in the Deloitte report in 2011 in which they said that metal theft costs the UK economy £220 million to £260 million a year, then it is likely that the £5 million taskforce money has delivered harm reduction for the UK of between £83 million and £98 million. That is a pretty good rate of return, as a relatively small investment of public money seems to have led to a substantial reduction in metal theft. Of course, this is a pilot study, not a complete picture. It needs now to be followed by the implementation of the measures contained in the Bill.

I have a question for the Minister on Operation Tornado. Its funding and that for the taskforce are due to come to an end in March 2013. Do the Government intend that this will be renewed, at least until the provisions of the Bill are fully implemented? The danger is that if the funding stops, police forces will start to focus on other priorities, and the momentum that they have gained will peter out. I cannot believe that that is what the Government would like to see happen.

Meanwhile, I am very happy indeed to support the Bill. I congratulate the noble Baroness on introducing it, and I hope that it can pass speedily through this House.

--- Later in debate ---

[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.