DPRR/12-13/53
Scrap Metal Dealers Bill
Memorandum for the House of Lords Delegated Powers and
Regulatory Reform Committees
Introduction
1. This memorandum has been prepared by the Home Office for the
purposes of the House of Lords Delegated Powers and Regulatory Reform
Committees. It identifies the provisions for delegated legislation in the
Scrap Metal Dealers Bill following its introduction to the House of Lords on
12 November. It explains the purpose of the delegated legislation
proposed; why the matter is to be dealt with in delegated legislation; and
the nature and justification for any parliamentary procedures which apply.
Background
2. The Scrap Metal Dealers Bill will revise the regulatory regimes governing
the scrap metal and vehicle dismantling industries under the existing
Scrap Metal Dealers Act 1964 and Vehicles (Crime) Act 2001. The Bill was
proposed by the Home Office as a Handout Bill and has subsequently
been adopted by Richard Ottaway MP as a Private Members (Ballot) Bill.
The Bill will be sponsored in the House of Lords by Baroness Browning.
3. Metal theft has caused great concern for the Home Office as well as a
number of other Government departments due to the damage it is causing
across many sectors in the UK. The Home Office identified a number of
steps required to tackle metal theft including: more focused enforcement
activity through a dedicated metal theft taskforce (which has made almost
400 arrests since January); continuing activity to design out metal theft;
and tackling the central market for stolen metal, the scrap metal industry.
4. A package of measures was agreed across Government at the start of the
year, including initial legislative steps to prohibit cash payments for scrap
metal, amending police powers of entry into unregistered scrap metal sites
and increasing the existing financial penalties for dealers for offences
under the Scrap Metal Dealers Act 1964. These measures are contained
in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and
will be brought into force by way of a commencement order on 3
December 2012. However the scope of that Act did not permit the Home
Office to include any changes to the registration scheme under the Scrap
Metal Dealers Act 1964.
5. The Home Office remains convinced that metal theft can only be properly
tackled through a reform of the legislation governing the scrap metal
industry which is what this Bill intends to do. The scrap metal industry is
considered by the Association of Chief Police Officers to be the principal
market for the vast majority of stolen metal.
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Overview of the Bill
6. The Scrap Metal Dealers Bill will introduce a more robust, local authority
administered, regime for the regulation of the scrap metal industry. This
new regime will aim to support law-abiding scrap metal dealers, whilst
including further powers to ensure unscrupulous dealers can be
adequately dealt with, including clear and enforceable responsibilities on
scrap metal dealers. Key features of the bill will include:
-
requiring all individuals and businesses to obtain a licence to operate
as a scrap metal dealer;
-
requiring all scrap metal dealers to complete accurate records of
transactions;
-
requiring all sellers of metal to provide personal identification at the
point of sale which is recorded by the scrap metal dealer;
-
incorporating the new criminal offence in the Legal Aid, Sentencing and
Punishment of Offenders Act 2012 of purchasing scrap metal for cash;
-
giving local authorities the power to refuse to grant a licence or to
revoke a licence where appropriate;
-
providing courts with the power to close unlicensed scrap metal yards;
-
providing a right of entry to enable local authorities and police to ensure
compliance with the new regime;
-
allowing local authorities to charge a licence fee to cover the costs of
administration and direct compliance activity; and
-
creating a central public register, hosted by the Environment Agency in
England and the Natural Resources Body for Wales in Wales, of all
individuals and businesses licensed as scrap metal dealers.
7. The Bill extends to England and Wales only.
Provisions for delegated legislation
Clause 2(8): Form and effect of licence
Power conferred on: Secretary of State
Power exercisable by: regulations made by statutory instrument
Parliamentary procedure: Negative resolution
8. Clause 2 covers the form, effect and content of a licence. Subsections (4)
and (6) specify the information that should be contained in a site licence
and a mobile collector licence respectively. Subsection (7) provides that
the licence must be in a form which enables the licensee to comply with
clause 10 (display of licence). Subsection (8) provides a power for the
Secretary of State to prescribe the form and content of a licence in
regulations, rather than permit local authorities to develop individual
licences. This will ensure that there will be a uniform licence used across
England and Wales ensuring they are recognisable and that fake licences
are more easily identifiable. This, as well as the requirement to clearly
display the licence, will assist enforcement activity.
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9. The Home Office is of the view that the negative resolution procedure is
appropriate for the exercise of this power as it will not amend primary
legislation and the power will be used to prescribe a practical requirement
of the regulatory regime. In addition there is precedent for a power to
prescribe the form of licence to be by way of the negative resolution
procedure (see section 8(5) of the Private Security Industry Act 2001 in
respect of a licence to work in the security industry).
Clause 3(3)(b) and (c): Relevant offences and relevant enforcement
action
Power conferred on: Secretary of State
Power exercisable by: regulations made by statutory instrument
Parliamentary procedure: Negative resolution
10. Clause 3(3)(b) and (c) provides a power for the Secretary of State to
prescribe in regulations the meaning of ‘relevant offence’ and ‘relevant
enforcement action’. Relevant offences and enforcement action are
considered when determining a person’s suitability to hold a licence under
the Act. This power is required so that the offences and enforcement
action that are considered relevant can be listed. This power will also allow
for the list to be subsequently amended if necessary, for example to reflect
changes in the criminal law such as if a new offence is created that should
be considered a relevant offence.
11. This power is exercisable by negative resolution as it does not amend
primary legislation. It is required to update the provisions, amending the
definition of relevant offence and relevant enforcement action if required,
such as to take account of changes to the criminal law.
Clause 5 - Schedule 1 para 1(4): Duration of a licence
Power conferred on: Secretary of State
Power exercisable by: order made by statutory instrument
Parliamentary procedure: Negative resolution
12. Schedule 1 para 1 covers the term of a licence, specifying that a licence is
to run for a period of three years. Under para 1(4), the Secretary of State
has the power by order to substitute a different period of time as
considered appropriate.
13. The ability to alter the duration of the licence is necessary as the current
term of three years is designed to reflect the duration of environmental
permits/licences. Should the duration of these change, a mechanism to
reflect such changes to this licensing regime is required.
14. The Home Office is of the view that the negative resolution procedure is
appropriate for the exercise of this power, even though the exercise of this
power will amend primary legislation, as it provides only a technical
change to the licensing regime. The Private Security Industry Act 2001
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provides a similar provision for the Secretary of state to set the duration of
the licence period by an order subject to the negative resolution procedure
(see section 8(8) of that Act).
Clause 5- Schedule 1 para 2(4): Application information
Power conferred on: Secretary of State
Power exercisable by: order made by statutory instrument
Parliamentary procedure: Negative resolution
15. Schedule 1 para 2 provides that a scrap metal licence is to be issued, or
renewed, by a local authority on an application. The clause sets out the
information that an applicant must supply to the local authority in applying
for the grant, or renewal, of a licence. This includes information on the
applicant, their business and information to enable the local authority to
decide upon the suitability of the applicant. Under para 2(4), the Secretary
of State has the power by order to amend the requirements as to what
information must accompany an application.
16. This ability for the Secretary of State to alter the information that is
provided is necessary to ensure that the information required in an
application can be amended to take account of technological advances or
other changes to the licensing regime.
17. The negative resolution procedure is suitable, even though the exercise of
this power will amend primary legislation, as the exercise of this power
would be to make technical changes to the information required in an
application. In this instance the information required in the application is
being set out in primary legislation. In other regulatory regimes the form of
the application is often prescribed in secondary legislation (see for
example section 26A and 26B of the Firearms Act 1968 where no
parliamentary procedure is required or section 8(2) of the Private Security
Industry Act 2001 which is subject to the negative resolution procedure).
The exercise of this power allows for amendments to be made to the form
of application and as with other regulatory regimes it should not be
necessary to require the affirmative resolution procedure.
Clause 11(3): verification of supplier’s identity
Power conferred on: Secretary of State
Power exercisable: regulations made by statutory instrument
Parliamentary procedure: Negative resolution
18. Clause 11 provides that a scrap metal dealer must not receive scrap metal
from a person without verifying the full name and address of that person.
Clause 11(3) provides a power for the Secretary of State to prescribe in
regulations the documents, data or other information which are sufficient,
or not sufficient, for the purpose of verifying identity. This documents, data
or other information that is considered sufficient will include state issues
documents such as passports and photo driving licences. This power will
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allow for the documentation requirements to be amended over time if
necessary, for example if technological advances mean that other forms of
identification are available.
19. The negative resolution procedure is appropriate as the exercise of this
power does not amend primary legislation. It allows for the identification
requirements to be prescribed, and for them to be changed over time as
necessary.
Clause 12(2): Offence of buying scrap metal for cash
Power conferred on: Secretary of State
Power exercisable by: order made by statutory instrument
Parliamentary procedure: Affirmative resolution
20. Clause 12(2) allows the Secretary of State, by order, to amend the
permitted methods of payment for the purchase of scrap metal by scrap
metal dealers. This replicates the power contained in section 146 of the
Legal Aid, Sentencing and Punishment of Offenders Act 2012 which
creates an offence of buying scrap metal for cash etc. This offence, which
is being repealed and re-enacted in this Bill, prohibits scrap metal dealers
from paying for scrap metal except by a non-transferable cheque or by an
electronic transfer of funds. A power is required to amend the permitted
methods of payment to allow for the fact that payment methods may
change e.g. if technological advances lead to new payment methods being
available or existing payment methods becoming obsolete.
21. The affirmative resolution procedure is appropriate because exercise of
this power will amend primary legislation and alter the operation of the
offence.
Clause 21(8): Definitions
Power conferred on: Secretary of State
Power exercisable by: order made by statutory instrument
Parliamentary procedure: Affirmative resolution
22. Clause 21(8) provides the Secretary of State with a power to amend the
definition of “scrap metal” for the purposes of this Act. This is to allow for
changes within the industry and in particular to allow for materials that
would not now be considered scrap metal to be brought within the
regulatory regime.
23. It is considered appropriate that this power is exercisable by affirmative
resolution as it amends primary legislation and amendments to the
definition of “scrap metal” could have a significant effect on the operation
of the regulatory regime under the Act as it would bring more metals within
the scope of the new system of regulation, and the new criminal offences.
Home Office
November 2012
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