Metal Theft

Nadine Dorries Excerpts

Tuesday 7th February 2012 Commons Chamber

[Chris Kelly (Dudley South) (Con)]

My interest in this vital subject was sparked by the near-nightly chronicling of metal thefts in the black country by the excellent six-nights-a-week Express and Star newspaper, which is the most widely read regional paper in the country. As the global price of metals such as lead and copper has climbed higher due to surging demand in emerging economies such as China, so the number of reports of metal thefts in local newspapers in my constituency has increased. Having studied the impact of this particular crime, and having set up with my friend the hon. Member for Hyndburn (Graham Jones) the all-party group on combating metal theft, it is my belief that most stolen metal is laundered within a few miles of where it is stolen. The most obvious reason for this is that the opportunist, unprofessional thief does not have the means, inclination or transportation to move several tonnes of stolen metal. Therefore, a car, pick-up truck or van-load of metal is usually weighed in at the nearest scrap yard that is known to pay cash with no questions asked.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Does my hon. Friend agree that many of the vehicles that transport stolen metal have been filled with red diesel that was also stolen from the place where the metal was stolen, so it is actually a double theft?

[Chris Kelly]

I thank my hon. Friend for that intervention. There is certainly a loss to the Exchequer and one often finds that the vehicles are uninsured and have no MOT. There is often criminality at all levels in this area.

I have a number of scrap yards in my constituency and there are many in the Dudley borough, the majority of which are run by law-abiding people who would not dream of laundering stolen metal for cash. I have visited one such dealer, Hudsons of Dudley in Brierley Hill, to see how the legitimate side of the trade operates. However, I suspect that the concentration of metal dealers in the Dudley borough and the black country has made my constituency and neighbouring constituencies a metal theft hot spot.

Legitimate metal dealers have told me that yards they know of are regularly visited by youths carrying bags—often sports bags or even supermarket carrier bags—containing copper wire that is promptly weighed in for cash. I have even been told of a metal dealer’s customer record book containing the name Mickey Mouse and the address Disneyland, Paris. That reinforces my view that metal is usually sold within a few miles of where it has been stolen. A youth carrying copper wire in a plastic bag to a scrap yard clearly is not a professional, licensed or regulated commodity dealer who is monitoring the market, moving stock and options around, buying when the price falls, selling when the price rises and transporting metal between supplier and customer in liveried, professional fleets of vans and trucks. That is not to say that everybody who sells small quantities of metal for cash on a regular basis is handling stolen goods, but it is clear from police reports, infrastructure, energy and transport networks and insurance company records that much of it is stolen.

The problem of metal theft was becoming so acute in my community that last February I arranged for the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), to meet a delegation of metal dealers and business people from the black country. They came down to the House to meet the Minister and his officials to discuss measures to combat metal theft, and Mr Hudson of the aforementioned Hudsons of Dudley was one of the business men present. One of the problems we discussed with the Minister was that a legitimate metal dealer cannot compete with the cash-in-hand payment of a dealer who is prepared to launder stolen metal. A legitimate dealer paying the market price and declaring everything to the tax authorities cannot compete with a dealer who is prepared to pay cash and who does not declare all that he or she should to the relevant authorities.

It seems to me that there are only two reasons for wanting cash payments in business. The first is that one is prepared to launder stolen goods, with the cash rendering the seller untraceable, and the second is that one wishes to avoid the all-seeing eyes of Her Majesty’s Revenue and Customs. In some cases, it may be both. I know from my time in business that the use of cash is actively discouraged today. There are sensible but quite onerous reporting requirements in place to prevent money laundering and tax evasion by companies. There is also a massive security risk while the cash is on the company’s premises—typically an ordinary office and not a bank-like building with all the necessary security features—and while the cash is being transported in the footwell or boot of, say, a company car and then on foot from the parking bay to the local high street bank to be paid in. It is high time that this industry was modernised and properly regulated. I am a natural deregulator, but this is one industry for which, as the Home Secretary said in her written statement last week:

“Cash transactions…are often completed without any proof of personal identification or proof that the individual legitimately owns the metal being sold. This leads to anonymous, low-risk transactions for those individuals who steal metal. In addition, the widespread use of cash facilitates poor record keeping by the metal recycling industry and can support tax evasion activity.”—[Official Report, 26 January 2012; Vol. 539, c. 26WS.]

Having spoken out several times about metal theft, I have received representations from the British Metals Recycling Association, which appears to make the sole argument that eliminating cash from the metal trade will drive the illegal trade underground. First, I would hope that no members of an organisation such as the BMRA would knowingly be involved in laundering metal above ground. Once stolen metal enters the chain of supply it is hard, if not impossible, to trace, and once it has been melted down it is virtually impossible to trace. That is why it must be prevented from entering in the first place through measures such as those we are calling for in the motion. Large metal recyclers cannot verify the source of every ounce of metal they process, and stolen material is undoubtedly laundered lower down the chain, ending up in domestic use or being exported to fast-emerging markets abroad.

Secondly, there will always be a small minority of rogue traders willing to launder stolen metal. The Government’s recent actions will not completely eliminate metal theft—hence the need to go further and faster, as we have called for in our motion—but I confidently predict that outlawing the use of cash will do much to reduce dramatically instances of this particular crime.

--- Later in debate ---

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Hyndburn (Graham Jones) and other hon. Members on their work to secure this important debate on the epidemic of metal theft. In the short time available, I would like to concentrate on the work of the Transport Committee on its recent report on cable theft on the railways, to which the hon. Member for Manchester, Withington (Mr Leech) has already referred.

Cable theft on the railways is an escalating problem of increasing importance. First, there is the disruption. Last year alone over 35,000 national rail services were cancelled or delayed, which meant 3.8 million passenger journeys thwarted. Secondly, it costs the public purse a great deal of money. Network Rail estimates that it has paid £43 million out directly over the past three years, and there has perhaps been an additional £20 million cost to the economy. Thirdly, lives are at risk. The British Transport police have said that 10 people lost their lives last year because of cable theft, and the problem is escalating.

What is the solution? The solution lies in a package of measures. First, more preventative action is needed. Network Rail can do more to prevent theft by having better surveillance, burying cables, using alternative materials and using traceable technology marking such as RedWeb. There should be stricter licensing and regulation of scrap metal dealers and stronger enforcement of the conditions of that licensing; proof of identity for those selling metals at scrap metal dealers should be made compulsory; there should be better surveillance, including CCTV, when transactions take place; there should be records of those transactions; and cashless trading should be trialled.

[Nadine Dorries]

Much of that work can be done in conjunction with the police and local councils. The Localism Act 2011 gave new powers to those councils that are prepared to go the extra mile and implement procedures for some of that work, so some councils, such as Central Bedfordshire, are already doing some of that work. I accept that more needs to be done, but councils can go some way already.

[Mrs Ellman]

I thank the hon. Lady for her comments and recognise what she says, but the Committee advocates a compulsory system of registration, stronger licensing and enforcement, too.

There must also be an increase in police powers to enter sites and to search them. There should be new offences, such as aggravated trespass on the railways, to make the theft of metal on the railway something for which thieves consider they will be apprehended. That requires more funding—more funding for British Transport police and for other authorities. Operation Tornado, which is being undertaken in the north-east of England, is to be welcomed, but it is a limited and voluntary scheme.

This problem is not a new one. Back in 2008 the National Audit Office warned about the problem of metal theft, and during our inquiry we were told that the industry thought it was better to keep quiet about it. None of us will keep quiet about it any longer.

I note and applaud the Government’s response following the publication of the Committee’s report, and some actions have now been taken, with others promised, but the full package of recommendations has not been adopted, so I look forward to hearing from the Minister how the Government intend to enact the full package of measures that the Committee proposed. We addressed the theft of cables on the railway, but our recommendations apply to the epidemic of metal theft wherever it may occur.