Part 2 - Consultation on Civic Government (Scotland) Act 1982 (Metal Dealers' Exemption Warrants) Order 2012.
1. The purpose of this consultation paper is to set out the Scottish Government's proposals to amend the scope of the Licensing Scheme for Metal Dealers and to seek views on the detail of this.
2. The draft order provided at part 3 of this document is intended to assist further consideration.
3. Section 28(1) of the Civic Government (Scotland) Act 1982 (the 1982 Act) sets out that a metal dealers licence is required for those carrying on a business as a metal dealer. Licensed metal dealers are subject to conditions that are attached to the licence by the licensing authority . Maintaining full records is a condition of all licences. Licensing authorities may attach other conditions as they deem appropriate such as a requirement for CCTV.
4.There are dealers that are exempt from licensing. Section 28(2) of the 1982 Act states that a licence shall not be necessary where a metal dealer is in possession of an exemption warrant. An exemption warrant is granted where a dealer has a turnover of over £100,000. Section 29 of the 1982 Act stated that an exemption warrant shall be granted on production of a certificate by the auditor of the metal dealer's business stating that, in a financial year ending in the preceding 18 months, the total amount received by the dealer in respect of metal sold or supplied by him, exceeded £100,000 or such other sum as may be substituted for that sum by order made by the Secretary of State. The sum of £100,000 has not been amended since the passage of the 1982 Act.
Thefts of Metal
5. There is no doubt that there has been a dramatic escalation of thefts of metal in Scotland in recent years. This reflects the significant rises in the value of metal for scrap. The theft of metal affects many industries including railways, utility companies and ultimately communities through the loss of transport, power and telephony to name but three critical services. There have been large increases reported in metal theft by police forces across the UK, with levels remaining high for each of the rail, telecom and power industry sectors.
6. Metal theft is a priority for British Transport Police who have seen a rising trend of metal theft over the last three years experiencing 2,000 incidents in 2010/11 compared with approximately 1,500 in 2009/10. So far in 2011/12, over 1,500 offences have been reported, suggesting figures will be in excess of previous highs, a trend reflected by other police forces and industries. There is also evidence that major infrastructure projects have also been affected by metal theft and with the sustained high prices for scrap metal, future capital projects could be vulnerable to theft and resultant delivery delays.
7. There is also evidence of communities being adversely affected through thefts of public art works and war memorials, damage to the roofs of public buildings and even thefts of drain hole covers. There has also been more minor inconvenience caused by minor thefts of items such as brass plates, door knockers and catalytic convertors containing platinum.
8. Over the last year at least ten members of the public have been killed attempting thefts of metal with many others being injured.
9. Specific reported examples of thefts include:
- Thousands of pounds of damage caused to public buildings in Leith including theatres, a parish church and a primary school (Edinburgh Evening News - 1 June 2011)
- Theft of a £35,000 memorial to a mining disaster in North Lanarkshire (Scotsman - 20 November 2009)
- 125,000 shopping trolleys stolen from Edinburgh and Glasgow in a year (Daily Record - 24 July 2010)
- 66 trains delayed or cancelled after thieves cut signal cables (Scotsman, 26 January 2011)
10. The cost to the UK economy of metal theft has been estimated recently in a report commissioned by the Association of Chief Police Officers at £220million to £260million. Higher figures have been posited but it is very hard to measure the consequential costs of many of these thefts. The figure of £220 - £260 million suggests about £100million of direct costs to conduct repair and replacements and a further £120million to £160million of indirect costs through for example commuters being delayed and businesses losing internet connections. Whilst there is no specific data for Scotland, it is clear that the cost to Scotland amounts to many millions.
Tackling Thefts of Metal
11. Police and other agencies are using a variety of measures to tackle metal thefts. These include:
- Early engagement with crime reduction officers highlighting effective industry practice, for example around property marking and physical barriers.
- Embedding a crime prevention focus within the industry by supporting the involvement of police crime reduction design advisors in the planning stages of construction projects.
- Encouraging a proactive role in reducing the opportunities for metal theft by working closely with metal owners
- Work with the Institute of Materials, exploring more sustainable ways of designing out this crime. This includes making metal harder to steal or easier to detect if stolen, as well as creating metal alternatives using cutting edge technologies.
However it is clear that measures that regulate scrap metal dealers, and provide the Police and others with greater powers to control, and take action against outlets that buy stolen metal or allow stolen metal to be sold into the legitimate scrap metal trade can form part of the solution.
12. Scottish Ministers believe that it is right to significantly increase the turnover level required in order for a warrant exempting a dealer from licensing to be obtained. This would have the effect of drawing many more dealers into the licensing system.
13. Once within the system it would be open to licensing authorities to consider what conditions should be attached to a licence. The sum of £100,000 has not been amended since the passage of the 1982 Act and is now regarded as inadequate by Scottish Ministers. In reaching this view Scottish Ministers have taken note of both the increased proportion of Metal Dealers who are now in receipt of an exemption warrant, and the greatly increased frequency of metal thefts and the consequences that flow from that.
14. The Scottish Government proposes that the exemption threshold is increased to £10m, and the draft order contains this figure. We believe that a figure of £10m will bring the majority of metal dealers into the licensing regime, whilst allowing the few largest, well run business to continue to be able to apply for an exemption. Greater regulation of the scrap metal industry should help improve standards to a consistently good level across the sector which means that many well run dealers may benefit from enhanced public perception and confidence in the sector as a whole.
15. Clearly, bringing more metal dealers into the licensing system will incur costs for business. We believe that the costs will be manageable and are justified by the reductions in the costs that arise from metal theft that we expect to flow from the expanded licensing regime. Many businesses, currently unlicensed, already meet the highest standards and will therefore not face any significant changes to their practices as a result of licensing. A partial Business and Regulatory Impact Assessment ( BRIA) accompanies this consultation. A full BRIA will be conducted before the final order is laid.
16. We would be grateful for views on the following questions:
Q. Do you agree that turnover based exemption from licensing should be increased from its current level of £100,000?
Q. The Scottish Government has advanced £10 million as a suitable figure for an exemption. Do you agree that this figure is appropriate?
Q. Do you have any other comments on the attached draft order?