Grasping the Metal

METAL DEALER LICENSING

The licensing of metal dealers has been in and out of the press for some time now as a result of the increasing spate of metal thefts across Scotland and beyond. Stories of war memorials being vandalised, powercuts and even worse have been so common that the Scottish Government has been motivated to legislate. But are their proposals toothless?

The existing licensing scheme for metal dealers is moderated under the Civic Government (Scotland) Act 1982, the same Act which licenses street traders and taxi drivers; and the requirement for a metal dealer licence arises where a business is selling or dealing in metals such as scrap merchant. Once the licence is in place, there are a number of conditions which must be adhered to such as keeping records and observing a 48 hour “quarantine” on selling second hand metal, in order to try and tackle reset.

However, the legislation offers an exemption for metal dealers whose turnover is greater than £100,000. This level was set in the early 1980s and has never been amended. It transpires that a large number of dealers are therefore exempt from the licence requirement.

Increasing metal theft has resulted in the Civic Government (Scotland) Act 1982 (Metal Dealers’ Exemption Warrants) Order 2012, which principally sought to raise the turnover threshold from £100,000 to £10million in order that a far higher number of metal dealers would be “caught” by the licensing requirement.

In response to this proposal, some suggested that there should be no threshold at all, especially local authorities such as Glasgow City Council and East Ayrshire Council. On the other hand, other consultees from the industry felt that the threshold was too high; and others that suggested it would cause chaos when extremely large organisations who often sell high volume quantities of metals within hours of purchase would be forced to “hold” the goods for 48 hours under the licensing regime, creating capacity and safety issues.

On 6 June 2012 Kenny MacAskill announced that the threshold would in fact be set at £1million. This will increase the number of businesses which need to be licensed, but the increase would have been much more significant had the original proposal of £10million remained. I expect this will come into force sometime in 2013 and there will a “transitional” period to allow businesses caught to lodge applications by a certain date and keep trading whilst the application is being progressed. These businesses will need to think seriously about to deal with the quarantine period.

Along the way a couple of interesting points have been made. Firstly, the implication that the big guys should be left alone because only smaller dealers could be “caught out” or perhaps even willingly buy stolen metal seems abstruse. I do tend to agree with the argument that if an activity is to be licensed, then the volume of business conducted is irrelevant. However, a separate issue is the practical problem of having to hold large deposits of all sorts, shapes and sizes of metals which must all be detailed and accounted for and then held for 48 hours taking up valuable space. Even worse, (and this has not been picked up as far as I can see) the 48 hour period does not include Saturday and Sunday so metal bought on a Thursday could not be sold till Monday; metal bought on Saturday could not be sold till Wednesday and so on. My understanding is that there is no similar 48 hour rule in England & Wales. The 1982 Act does allow for a licence holder to apply for the 48 hour rule to be disapplied; but this is difficult to negotiate to say the least and likely to objected to by the police. These requests are extremely rare, although I have acted in a couple of such hearings for clients in the last year and in the face of strenuous objections from the police the best I could achieve was to have the exclusion of the weekend lifted.

Secondly, the proposals completely ignore the separate category of itinerant metal dealers which are licensed separately. Under current law, itinerant dealers do not need to keep records and do not require to observe the 48 hour quarantine period. I raised this point through the Law of Society of Scotland and you will note this on the consultation responses. But there appears to be little appetite to fix that, which in my mind is strange. If you want to clamp down on metal theft, why allow travelling metal dealers to buy and sell metal without any sort of recording keeping, ID, or quarantine?

Taking all that in, I am concerned that the 2012 Order has turned into a PR exercise, and will actually do little if anything to reduce the mischief aimed at.

Advertisements

About Stephen McGowan

Leading Scottish licensing solicitor at TLT. Chairman of BII Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s