LMT UK Ltd
Unit 4202 Waterside Centre
Solihull Parkway
Birmingham Business Park
Birmingham
B37 7YN

Direct Number: +44 (0) 121 717 5832
Office Number: +44 (0) 121 717 5830
Fax Number: +44 (0) 121 717 5838

Change in Scrap Legislation – Has It Reduced the Value of Your Scrap?

27th August 2013
Change in Scrap Legislation – Has It Reduced the Value of Your Scrap?
Metal theft has emerged as a significant and growing problem throughout the UK and highlighted the ineffectiveness UK Scrap Metal Dealers Act 1964.  The act then underwent some significant amendments when the Legal Aid, Sentencing and Punishment of Offenders Act received Royal Assent on 1 May 2012 with the amended changes to the Scrap Metal Dealers 1964 (which will make paying for scrap metal with cash a legal offence) becoming effective from 3 December 2012.  Magistrates are also being encouraged to impose unlimited fines on any metal trader found to be dealing in cash or conducting business without an authorised license.  Only this month (Aug-13) a Soham, Cambs man caught carrying scrap metal illegally was fined £750 and ordered to pay £2,000 costs at Bury St Edmunds Magistrates’ Court.
 
So what’s all that that got to do with the engineering/manufacturing industry and why should it make any difference to their finances?  Well of course machine shops spend their working life manipulating metals of all kinds and much scrap metal is produced as a result.  Over the years many shops have formed relationships with itinerant scrap dealers where scrap metal was routinely collected and cash changed hands.  Cash that often didn’t find its way back into the business as staff members awarded themselves a cash bonus; and in truth many business owners may have turned a blind eye to that practice.
 
Under the new cashless regime that will no longer be possible, so (in theory) the employer will benefit financially.  Additional financial benefit may also accrue through the reinforcement of better grading of scrap metal as scrap merchants are encouraged to co-operate with the machine shops to better segregate their scrap by type and grade.  The reputable scrap metal merchants will achieve this by providing on-site containers to their machine shop clients into which the various metals can be stored for collection.
 
Top graded scrap metals like carbide attract sky-high prices but previously everything was just lumped into the same scrap metal bin and in so doing, the real value of the high-priced metals was likely being lost in amongst the lesser graded scrap.  If there’s an obvious financial benefit to be derived from taking more care in separating their scrap metal better, then machine shops will obviously do so in order to maximise scrap values of the top grade stuff.
 
This 2013 act isn’t perfect, but is far better than its predecessor and already appears to be making a difference.  The measures taken have certainly reduced the amount of thefts across the UK in a considerable manner.  Thefts ranging from stealing telephone cables to that of stealing a barn or garage shed might now less likely because of the implementation of cashless trading.
 
In conclusion, it may well turn out to be that whilst machine shops may have to put up with a bit more bureaucracy when it comes to moving on their accumulated scrap metal – they might also end up being making more money out of it as a result.
 

 

Back to the main news page