Cash for scrap to be banned as Government tackles metal theft epidemic

In a written ministerial statement (1-page / 80KB PDF) Home Secretary Theresa May said that the ban, together with increased fines for scrap metal theft, would be created as an amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill that is currently being considered in Parliament. The current maximum fine that can be charged for metal theft is £1,000.

“The Government considers that legislation is the only sustainable, long-term solution to the growing menace of metal theft,” May said in the statement. "There is an urgent need to make stealing metal less attractive to criminals, and tackling the stolen metal market will act as a significant deterrent."

“Cash transactions for scrap metal are often completed without any proof of personal identification or proof that the individual legitimately owns the metal being sold," she said. "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.”

The Government announced £5 million funding to set up a dedicated metal theft taskforce as part of its National Infrastructure Plan in November 2011.

Although a high percentage of scrap metal theft takes place from within the manufacturing and metal recycling industries it is the theft of cables from the railways for resale, together with lead stolen from church roofs and copper from telephone exchanges, that has consistently hit the headlines.

May’s announcement came as an influential committee of MPs published the results of its own inquiry into the effect of cable theft on the railways. The Transport Committee said the crime cost Network Rail more than £16m last year, as well as resulting in delays to or the cancellation of over 35,000 passenger journeys.

Committee chair Louise Ellman called on the Government to introduce a new offence of aggravated trespass on the railways to deter metal thieves, tougher regulation of scrap metal dealers and for increased powers to be given to the police.

“Cable theft from the rail network is part of an increase in metal theft across the country made easy by the way in which stolen metal can be sold to scrap metal dealers," she said. "Current legislation for regulating scrap metal dealers is out of date. We need urgent reform to improve the audit trail generated by the scrap metal industry so that criminals selling stolen metal into the trade can be identified much more easily."

Recovery law expert Andrew Masterson of Pinsent Masons, the law firm behind Out-Law.com, said that banning cash payments for scrap would make it much less easy to launder stolen metal, especially from vulnerable infrastructure like the railways.

“Even so, the high values that non-ferrous scrap command means there will always be an under-the-counter market,” he warned. “The message for manufacturing businesses remains to make sure you have strong systems for custody and control of your metal production if you want to hang on to it.”

In a recent opinion piece for Out-Law.com, Masterson said that some scrap metals, including copper, were increasingly being seen as ‘semi-precious’ due to their high value and increasing scarcity. Even after recent price falls scrap copper now trades at around $8,000 per tonne, he said. In its recent review of the Government’s waste management strategy, manufacturers’ organisation EEF said that a shortage of raw materials is the biggest threat that the manufacturing industry currently sees to its business.