Clause 18 - “Carrying on business as a scrap metal dealer” and “scrap metal”

Scrap Metal Dealers bill – in a Public Bill Committee at 9:45 am on 12th September 2012.

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Photo of Jeremy Browne Jeremy Browne The Minister of State, Home Department 9:45 am, 12th September 2012

I beg to move amendment 39, in clause 18, page 10, line 1, leave out ‘and’ and insert ‘or’.

Photo of Joe Benton Joe Benton Labour, Bootle

With this it will be convenient to discuss the following:

Amendment 40, in clause 18, page 10, line 7, leave out ‘buying or’.

Amendment 41, in clause 18, page 10, line 8, leave out paragraph (a).

Amendment 42, in clause 18, page 10, line 10, leave out ‘(if at all)’.

Amendment 43, in clause 18, page 10, line 10, leave out ‘them’ and insert ‘articles’.

Amendment 44, in clause 18, page 10, line 33, leave out paragraph (c).

Amendment 45, in clause 18, page 10, line 35, leave out from ‘silver’ to the end.

Photo of Jeremy Browne Jeremy Browne The Minister of State, Home Department

Thank you, Mr Benton, for giving me the opportunity to speak to the final string of amendments. There is a substantial number of Government amendments, so let me talk the Committee through them in turn.

Government amendments 39 to 45 seek to amend the definitions in the Bill of a scrap metal dealer and of scrap metal. The amendments follow discussions held between the Home Office and the British Metals Recycling Association since Second Reading.

Government amendments 39 to 43 relate to the definition of a scrap metal dealer. Amendment 39 will allow a scrap metal dealer either to buy or sell scrap metal, rather than requiring that they do both. The current wording was not felt to reflect sufficiently the reality for some people. Clause 18(3) outlines the businesses that are not to be considered as scrap metal dealers.

Amendments 40 and 41 make changes to the clause, principally to remove the reference to businesses buying scrap metal, so that any business that buys metal only as materials for manufacturing items should be considered a scrap metal dealer as well. The reason for that is the example of foundries, which purchase scrap metal and smelt it to make other products. Smelting removes all visible markers, including products such as SmartWater, which makes the metals impossible to trace. If the record-keeping requirements at the point of purchase are not kept, that would offer a loophole for the easy disposal of stolen metals, particularly metals with a low boiling point such as lead. The Government are concerned that that might be a loophole, and the amendments seek to close it. Including that sector in the definition will ensure that all its purchases are included in the conduct of business set by the Bill, thereby closing the loophole. Government amendments 42 and 43 are consequential amendments that will give effect to the change that I have just outlined.

Government amendment 44 will remove the exemption for the six platinum metals that currently fall outside the definition of scrap metal. Members will see them listed, and looking like a chemistry lesson, in the Bill. Those metals, exempted in the 1964 Act, have now risen in prominence in a number of different types of industrial equipment and machinery, and in catalytic converters. Thefts of items such as catalytic converters have risen considerably over the past few years, which we believe is a result of the attractiveness of their metals to the criminal. Those metals are now routinely purchased by the scrap metal sector in that format. They are therefore included, ensuring that their purchase is covered by the new standards of conduct. In summary, the previous decision to exempt them was seen to be out of line with some practices, so we have cast the net wider to include them. Government amendment 45 is a consequential amendment to give effect to amendment 44.

If the Committee accepts the amendments, gold and silver will be the only exempted metals not classified as scrap metal. The scrap metal industry does not commonly purchase those metals, which are more routinely purchased by specialist dealers to high street outlets and jewellers. The Government take the theft of gold seriously. Gold prices have risen considerably in recent years, and the incentives for criminals to steal gold have increased in line with the higher price.

Gold and silver do not fall within the commonly understood definition of scrap metal and are not metals dealt with by the industry that we—or, more precisely, the hon. Member for Croydon South—seek to regulate in the Bill. I do not wish the Committee to think that the Government are not concerned about the theft of silver and, in particular, gold. Other metals should be  included because they fall within the commonly accepted definition of scrap metal applying to the industry, whereas gold and silver require separate attention.

Photo of Robin Walker Robin Walker Conservative, Worcester

In a Bill focused on scrap metal, it is right to leave aside gold theft, but I am sure that the Minister recognises that the south Asian community in particular, where people have a lot of gold in their houses, has been targeted in gold thefts. There is great concern about gold theft among people in my constituency and other places around the country. I have asked Home Office Ministers to keep a close eye on the situation to see whether a ban on cash payments for gold should be considered, and I ask him to bear that in mind. Although I accept that the Bill is not the right place to deal with such thefts, the Home Office should monitor and look into the problem closely.

Photo of Jeremy Browne Jeremy Browne The Minister of State, Home Department

I am grateful for that extremely constructive intervention and I share the sentiments in it.

Let me make two brief concluding points. First, Members will note that clause 18(8) provides a delegated power to the Secretary of State to change the definition of scrap metal, if that is deemed to be a wise course of action. I do not envisage that it will be appropriate to bring extra metals within the scope of the Bill, but should it prove a sensible path to go down, in the judgement of the Secretary of State, the Bill provides for that to happen.

To address my hon. Friend the Member for Worcester’s intervention more precisely, there is a whole body of work that it might be more appropriate to discuss in greater detail in another forum. The police are working to put more rigorous mechanisms in place for transactions involving gold, including requirements to obtain names and addresses of customers, to verify identification, to ensure that customers are over 18, and so on. It might be more appropriate to have a wider discussion of the problem. The amendments will not change the situation relating to gold, but most people would not regard gold as scrap metal. We recognise the seriousness of the crime and seek to put in place measures to combat it, working with the police to make it harder to steal gold and to trade in stolen gold.

Photo of Chris Kelly Chris Kelly Conservative, Dudley South 10:00 am, 12th September 2012

It is a pleasure to serve under your chairmanship, Mr Benton. The Minister began his remarks on the amendments to clause 18 by saying that the Home Office had rightly consulted the British Metals Recycling Association. I am pleased that the Home Office has done that, but there was early resistance from some directors and members of the BMRA to the need for legislation at all. I am glad that they have now fallen in line. I did some media early on this year, or late last year, with the chief executive of the BMRA, who at that point was against the need for this kind of legislation. I am glad that that line of thought has changed.

As my hon. Friend the Member for Worcester said, this is a necessary series of amendments to a provision on a crime that is doing huge damage in my constituency of Dudley South. I am pleased that we have made this progress through the Bill of my hon. Friend the Member  for Croydon South. I am pleased that the BMRA has been consulted and is now in agreement with the aims and objectives of the Bill.

Photo of Richard Ottaway Richard Ottaway Chair, Foreign Affairs Committee, Chair, Foreign Affairs Committee

I would simply add this to my hon. Friend’s remarks: having visited a number of scrap yards, I know that catalytic converters often make up a dedicated corner of the yard. Platinum is clearly being frequently traded through scrap metal yards now, so these amendments are thoroughly appropriate.

Amendment 39 agreed to.

Amendments made: 40, in clause 18, page 10, line 7, leave out ‘buying or’.

Amendment 41, in clause 18, page 10, line 8, leave out paragraph (a).

Amendment 42, in clause 18, page 10, line 10, leave out ‘(if at all)’.

Amendment 43, in clause 18, page 10, line 10, leave out ‘them’ and insert ‘articles’.

Amendment 44, in clause 18, page 10, line 33, leave out paragraph (c).

Amendment 45, in clause 18, page 10, line 35, leave out from ‘silver’ to the end.—(Mr Jeremy Browne.)

Clause 18, as amended, ordered to stand part of the Bill.