Select Committee on London Local Authorities Minutes of Evidence

Evidence Session (Sections 3072-3099)


23 MARCH 2006

3072. CHAIRMAN: Good morning Mr Clarkson.

 3073. MR CLARKSON: Good morning. It is time to round up the usual suspects! May I say today that the appearances are as on your sheet. There is another usual suspect who is making a cameo performance from retirement, Mr Michael Pritchard who will be instructing me here today. What we lay before you today is registration of second hand dealers. The act seeks to regulate the second hand trade and reduce the levels of acquisitive crime such as burglary by making it part of a scheme to dispose of stolen goods and turn them into cash. Dealers in second hand goods will be required to register with councils, keep records of their transactions and that will provide the metropolitan police and local authority trading standards officers with comprehensive intelligence which will allow stolen property to be traced through the supply chain.

 3074. I can give comfort to the Committee that this is not radical, it is not new. Parliament has passed similar legislation on a number of occasions before. I hope that you have had this document through the system, it is an important document and is really seminal to a number of the points that we are going to lay before you. It is perhaps helpful for me to tell you the genesis of it, if you go right to the end you will see something called The Kent County Council Act 2001 in appendix three in the back. I am not going to take you through the Kent County Council Act which is very similar in many respects to what they are laying before you in the Bill but what is important is on page 14 of that appendix, section 20, under the heading reports, "Not more than 3 years after the appointed day the councils shall submit to the Secretary of State a report on the working provisions of the Act; and the Secretary of State shall lay any such report before Parliament." That is what this document is, a product of the examination of the Kent Act they were required three years afterwards to submit this report. It is quite a useful document as an aid to a number of matters because you see a number of the issues analysed.

 3075. If you go to page 15 of it, the main document, you can see that what we lay before you is not original. I cannot say the form of the legislation is the same but there has been a number of Acts, the South Yorkshire Act, Merseyside, Manchester, Humberside, Lancashire, Hereford, Worcester, North Yorkshire, Newcastle, Nottingham and Kent. I am going to take some time with the executive summary and that is the nub of my opening. Can you go to page one of it. If the Committee will forgive me I am going to read it out. It is a useful exposition. "The basic premise of the market reduction approach is that by disrupting the market for stolen goods, the motivation to steal can be reduced and hence levels of acquisitive crime will fall. Kent Police have been applying this approach since 1994, but in 1999 decided, in collaboration with Kent and Medway Councils, that legislation was needed to help control the market for stolen goods. The report highlights how the implementation of this legislation in Kent has contributed to overall falls in acquisitive crime in the county and asserts that national legislation would, if enacted, have benefits. Kent Police and Trading Standards requested local legislation to manage the open market place (second hand shops, car boot sales etc.) which was enacted in 2001. The Kent Acts are just one tactic amongst many to control the disposal of stolen goods. They have, however, given Kent Police a range of inspection and enforcement powers necessary to manage the open market place. The legislation requires dealers to register with the Councils and to keep records of specified transactions. The Kent Acts also contain provisions to regulate occasional sales such as markets, boot fairs, trade fairs, and one-day sales." Passing the Bill before you does not dissent to that. "Briefly, the main provisions are as follows: They apply to persons dealing in second hand goods in the course of a business. Both the dealer, and any business premises situated in Kent must be registered. A single registration covers both Councils." Medway also are involved as you will appreciate. "With some exceptions, registered dealers have to keep specified records relating to the items they acquire and sell. Dealers are required to display a copy of their registration certificate when trading from any premises in Kent, including a vehicle or stall. The main enforcement benefit provided by this part of the legislation is that it gives both the Police and authorised officers from the Council the power to enter registered premises and to inspect and take copies of records."

 3076. I am not going to read out in relation to occasional sales because that is not a provision that is proffered in this Bill. The added value of the legislation, "Without legislation, it is difficult to make a scheme such as this work. A voluntary scheme previously tried in Medway was met with only limited success. Voluntary schemes have no legislative teeth and will not control those determined to avoid the voluntary requirements. These are likely to be the very people that police and other enforcement agencies most need to control. Of particular importance is the fact that no other legislation gives any of the powers that these Acts provide. The Kent Acts require an infrastructure and commitment within both the local Police and Trading Standards department that supports and resources a market reduction approach. Without this infrastructure, the Kent Acts would not function efficiently. The Kent Police and Trading Standards have fully utilised the local legislation. The success of the Market Reduction Approach has been measured by both partner agencies. The outcomes are outlined in this report. Overall, this report asserts that the Kent and Medway Acts have been instrumental in supporting the management of both overt (such as second hand shops and antique dealers) and covert (criminal handlers) markets that can be used for the resale of stolen goods. This, in turn, has contributed to a 6.9% reduction in burglaries and an 18.9% reduction in vehicle crime in Kent since the Acts came into force. No other police force within Kent's family of most similar forces have experienced these levels of crime reduction. Consultation across a wide selection of the public, has shown that the Kent Acts are generally supported. Research into costs to the retailers and persons subject of the legislation has shown these costs to be minimal." I should add there that the cost of registration in the Kent Act was zero, there was no payment required. There is a proposal for a fee under this Bill.

 3077. "… research has also been carried out into other similar local legislation that has been enacted throughout the country. The majority are using the legislation actively. In addition, a further eleven areas in the country have expressed interest in obtaining similar legislation. This gives strong support for consideration of national legislation. Disparate local acts could be replaced by a single act, thereby providing standard recording, registration and inspection requirements throughout the country. It would also encourage effective interagency liaison as has occurred in Kent."

 3078. "Kent and Medway Trading Standards, together with Kent Police, wish to continue in their use of the local Acts. National legislation, if supported by the commensurate resources as outlined, would benefit all of the country, as the Kent Acts have benefited our county and communities." That last sentiment is endorsed by the Promoters here. I cannot tell you that there is national legislation coming forward. May I take you to the scheme of the Bill, and it is page 63, clause 87. I am not going to take it in too much detail.

 3079. Interpretation 88, " 'dealer in second hand goods' means a person who carries on a trade or business, the whole or part of which consists of transactions in second hand goods …" Under 89(1) they shall be registered, "A person shall not in a borough carry on a trade or business the whole or part of which consists of transactions in second hand goods when he is not registered by the council under this section or exempted from registration by section 92 … when he is not so exempted, he shall not carry on such a business in premises in a borough which is occupied by him when the premises are not so registered. On application for registration under this section shall register the applicant and, if the applicant specifies premises, those premises and issue to the applicant a certificate of registration on which there shall appear a registration number." Then there are a number of items that have to be set out in writing. 89(5)is important, "Registration under this section shall remain in force for three years from the date of registration." 89 (6) "A council may charge a reasonable fee for a registration under this section, calculated by reference to the cost of dealing with applications for such registration." The reason for that fee is that it is universal now but if there is any form of licensing or registration, a fee is charged to cover overheads.

 3080. CHAIRMAN: Mr Clarkson, I am sorry to interrupt you but I believe you said in relation to the Kent Acts that there is no fee?

 3081. MR CLARKSON: No, there is no fee.

 3082. CHAIRMAN: Will there be evidence coming forward to us as to why in this case it is felt that a fee is necessary or have you just given us that evidence?

 3083. MR CLARKSON: I have given you some of it but I am going to call two witnesses.

 3084. CHAIRMAN: Thank you.

 3085. LORD FAULKNER OF WORCESTER: Will you also tell us the range of fees that are charged?

 3086. MR CLARKSON: Yes. I think the figure is of the order of £33 which works out at £11 a year. Then, the information to be kept, which is really plagiarised from the Kent Act, section six, that is, and I am going to summarise it, details under one in respect of every transaction under which he acquires an interest in second hand articles, he must keep a record of the date of the transaction, a description sufficient where reasonably possible to identify the articles quantity, the name and address of the person from the article is required and if the person is registered under this act as it would be, the registration number, et cetera.

 3087. Then, I am going to go to two, that subsection one shall not apply in respect of any transaction in respect of which a person acquires an interest in or takes charge of any second hand article which will in his reasonable opinion at the time of transaction be disposed by him for no value or at a price less than the relevant amount. If you go forward you will see what the relevant amount is in clause 4 but before I get there subsection two above, "shall not apply in relation to any electrically or battery powered goods or to any medium on or by which sound images or other data are or maybe stored or recorded." The relevant amount for acquisition is £10 in the case of vehicle parts, jewellery, watches, photographic equipment, sports equipment, equestrian equipment, boating equipment, musical instruments, tools, bicycles, firearms and gardening equipment. It is £50 in respect of all other articles in which the subsection applies. 95 is the end of the process, there has to be a record kept of the selling. The relevant amount for selling is something over six items at £100 pounds for the materials set out there in 6(a) and £500 in the case of all other articles.

 3088. Seven which is of interest, I suspect, to those sitting alongside me. In the case of transactions under which a dealer of second hand goods acquires an interest in, or takes charge of, or sells articles at an auction, the entry of the name and address of the auctioneer in the record referred to in subsection one shall suffice for the purposes of subsection one (c) one or as the case may be, subsection 5(a) shall apply. An addition apart which is on page 15 of the clauses apart, "Subsection (1) and (5) above shall apply to transactions which take place outside the borough only if - (a) the person acquiring an interest in, taking charge of or selling the articles in question occupies premises registered under subsection (5) above; or (b) the usual place of residence of the person acquiring an interest in, taking charge of or selling the articles in question is within the borough (except if that person carries on his business as a dealer in second hand goods primarily in premises occupied by him and situated outside the borough)".

 3089. At nine, they have to keep records for two years, ten, they have to produce records if asked for them. There are a number of offences set out on summary conviction that I do not propose to take the Committee through unless you would like me to in any detail. 92 is important because it says what it does not apply to and I can fast read that for you with headline points, charity, scrap metal dealer because there are covered, waste paper, cardboard, textiles, plastics in bulk or second hand clothes. Hire purchase agreements because they are covered elsewhere, pawn broker, (f) "a person engaged in a business of which the primary purpose is the supply of new unused goods and to which the supply of second hand or used goods is merely incidental." Second hand books, dealer in animals in respect of his business, that is an interesting concept, a second hand animal, a difficult one. A person who is by resolution the council excluded from the operation of this part of the Act.

 3090. LORD FAULKNER OF WORCESTER: What does that mean?

 3091. MR CLARKSON: They can exclude it, they can say specific dealers of specific goods need not register. Then, there are provisions 93 with the addition apart which I am not going to burden you with at 16 that set out the process pending registration. A renewal of legislation exercised at 94 so the registration continues until it has got a new certificate. 95 is important because this is the bite, so to speak, as far as the police and the trading standards officers are concerned. Subject to subsection two below, "an authorised officer, on production, if required, of his credentials, or a constable, may at all reasonable hours exercise the following powers - (a) he may, for the purpose of ascertaining whether any offence under this Part of this Act has been committed, inspect any goods and records and enter any premises; (b) if he has reasonable cause to suspect that an offence under this Part of this Act has been committed, he may, for the purpose of ascertaining whether it has been committed, require any person carrying on a trade or business or employed in connection with a trade or business to produce any records relating to the trade or business and may take copies of, or any entry in, any such record; (c) if he has reasonable cause to believe that an offence under this Part of this Act has been committed, he may seize and detain any goods for the purpose of ascertaining whether the offence has been committed; (d) he may seize and detain any goods or records which he has reason to believe may be required as evidence in proceedings for an offence under this Part of this Act; (e) he may, for the purposes of exercising his powers under this subsection to seize goods, but only if and to the extent that it is reasonably necessary in order to secure that the provisions of this Part of this Act are duly observed, require any person having authority to do so to break open any container and, if that person does not comply with the requirement, he may do so himself." He "… may not enter a dwelling in the exercise of his powers under this section without the consent of the occupier unless he has obtained a warrant under subsection (4) below. (3) An authorised officer or constable seizing any goods or documents in the exercise of his powers under this section shall inform the person from whom they are seized."

 3092. Then, at four, there is the mechanism for a warrant which is a justice of the peace mechanism.

 3093. At five, anybody who does enter has to leave the premises in good order is the short summary.

 3094. At six, "If any person who is not a duly authorised officer of the council or a constable purports to act as such under this section he shall be guilty of an offence an liable on summary conviction to a fine not exceeding level 4...".

 3095. I should have perhaps told you on the way through, an authorised officer is in clause 2 of the Bill, in relation to the borough council, means any employee of the council, any other person by whom in pursuance of arrangements made with the council any function under this act formally is charged or any employee of any person. It was authorised in writing by the council to act in relation to the relevant provision of this act. By another name that is an authorised trading standards officer.

 3096. Seven, "Nothing in this section shall be taken - (a) to compel the production by any person of items subject to legal privilege, excluded material or special procedure material; or (b) to authorise the taking of any such items or material in the possession of that person."

 3097. Those are defined at eight under the Police of Criminal Evidence Act, the subtleties of that, I will not trouble the Committee with. There is a procedure for the serving of notices under 96. At 97, "Where the council pass any resolution under this Part of this Act (other than a resolution bringing into effect section 89 ... they shall, no later than 28 days before the resolution comes into effect, either - (a) serve on every person registered under the said section 89 and affected by the resolution; or (b) cause to be published in a local newspaper circulating in the borough, notice of the passing of any such resolution."

 3098. The last point I should make dealing with the Bill this is a clause that is adoptive. That is to say, the individual councils pick it up as and when they consider it appropriate and you will hear evidence as to what the council's views are from Mr Wallace who is a group manager at the Trading Standards of the London Borough of Enfield, after which you will hear from acting Superintendent Murphy of the Kent Police who has got clear experience of the Kent Act. He gave evidence to Parliament on it and promoted it and is now a senior police officer who has the responsibility for it in Kent so, you have got both sides of it. Also, through the witnesses, you will hear from the Metropolitan Police, there is a letter from the Metropolitan Police explaining they are in support of it, they see it as a valuable addition for police officers in the detection of acquisitive crime. That is all I say in opening unless there is anything I can help you with. I call Mr Wallace to give evidence.

 3099. CHAIRMAN: Yes, that is fine. Thank you.


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