Scottish Government proposes ban on cash payments for scrap metal

The plans included in the consultation, which also focuses on what conditions scrap dealers should be subject to under a new licensing regime for dealers, are intended to target the "scourge" of metal thefts from buildings, bridges and railways. The Scottish Government proposed a licensed trade in an initial consultation last year.

If approved, the plans will see the law in Scotland closely mirror that in England and Wales. Cash payments for scrap were banned in December 2012, while a licensing regime will be introduced later this year under the Scrap Metal Dealers Act, which received Royal Assent in February.

"We already know from the responses to our first consultation that there is support for proper regulation and licensing," said Justice Minister Kenny MacAskill. "This consultation takes a closer look at what form licensing would take. It is essential that any changes to the regulation of the scrap metal industry protect both the public interest and the interests of that industry."

MacAskill was speaking at St Mary's Cathedral in Edinburgh, which has faced significant structural damage in recent months as a result of the theft of lead from its roof. Metal worth approximately £7.5 million was stolen in Scotland in 2011, according to a recent study by the Association of Chief Police Officers in Scotland, while thefts accounted for losses worth a further £2.8m over the first half of 2012. The indirect costs of these thefts are usually far higher, such as costs resulting from inconvenience to the public and loss of public utilities and services.

In its consultation paper, the Scottish Government said that it was already taking steps to tackle metal theft on "a number of fronts". The Crown Office and Procurator Fiscal Service recently announced a tougher prosecution policy, and courts now reflect the full consequential costs of thefts when sentencing, it said. Licensing had an important role to play as part of this regime as one of the ways a thief could seek to convert stolen metal into cash was by selling it into the legitimate scrap metal recycling industry via a dealer, it said.

Metal dealers in Scotland are currently licensed by local authorities; however those with a turnover in excess of £100,000 were previously exempt from licensing requirements. This turnover threshold was raised to £1m in February 2013 as a result of the Scottish Government's initial consultation exercise; however it has proposed to remove the exemption system entirely.

Among the licensing conditions proposed by the consultation are tighter record-keeping requirements and a need for dealers to take steps to confirm the identity of the customer who is wishing to sell metal. Other possible conditions, such as the need for dealers to use CCTV as part of their security arrangements, could be made mandatory or left to the discretion of the various licensing authorities.

On the topic of banning cash payments for scrap metal, the consultation notes that this would end "one of the drivers" for stealing metal. "By its nature the transaction is anonymous and very hard to trace when compared to other forms of payment such as cheque, bank transfer or bankers draft," the consultation said.

The Scottish Government is seeking views on whether it should allow an exception for transactions of a very low value, which could be "uneconomic to process via electronic means or cheque". However, it notes that it is not inclined to allow such an exception as "many thefts of metal only have a scrap value of a low amount", and the exception could be used as a loophole to allow cash payments to continue.