No more cash for metal

As a ban on cash transactions for purchasing scrap metal becomes law, Ian Hetherington, director general of the British Metals Recycling Association (BMRA), outlines the importance of regulatory reform to limit its effect on legitimate businesses.

From next week (3 December) it will be an offence to pay cash for scrap metal. It is the result of increasing pressure on government to do something to stop the tide of metal theft which has caused untold distress and disruption to communities across the UK.

BMRA director general Ian Hetherington
BMRA director general Ian Hetherington

Whilst the majority of scrap metal dealers are prepared for the cash ban, there is still some way to go in ensuring all are ready in time. The principal requirement is for transactions to have traceability and to provide an effective audit trail meaning all transactions must be by crossed cheque or electronic transfer and each transaction must be recorded.

As with all legislation, enforcement is the key to making it work and it is local authorities and local police forces that are responsible for ensuring compliance with the new cashless trading provisions as well as remaining responsible for checking the records of scrap metal dealers under the existing Scrap Metal Dealers Act (SMDA) 1964.

Illegal Trade

BMRA continues to work with government and other stakeholders to reform the industry as without a robust regulatory framework the ban on cash will not have the desired outcome. Instead it could have a devastating effect on businesses as they stand to lose a substantial amount of trade. If illegal sites are allowed to continue to trade, they will no doubt offer householders and businesses payment in cash too, therefore negating the purpose of the cash ban to remove the rewards that make metal theft so enticing.

Whilst we are confident that 99% of itinerant collectors are now covered by the cash ban, as legislation currently stands some metal traders such as motor vehicle salvage operators are exempt, which again leaves an unfair playing field. It poses a serious challenge to small metal recyclers who rely on the trade of householders and businesses who sell scrap items every day and who will undoubtedly take their business to collectors who will continue to pay cash.

The Scrap Metal Dealers Bill hopes to eradicate those issues, closing off the loopholes whilst improving regulation and enforcement to rid the industry of illegal and unscrupulous dealers. The bill has recently been agreed by the House of Commons and is now being considered by the House of Lords.

The industry must now pull together and work with the police, local authorities and others to reduce the impact the cash ban will certainly have on businesses, particularly smaller traders, and work to ensure this bill makes it into law and as quickly as possible. The longer the cash ban continues without this reform, the more damage it will do to the UK metals recycling industry.

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