The government has put forward new proposals to end the “epidemic” of metal thefts afflicting railway lines, churches, telephone exchanges and metal suppliers.

Labour said the proposals of Home Secretary Theresa May, which would see scrap metal cash transactions banned and fines “significantly increased”, did not go far enough to tackle the “epidemic” of the illegal scrap metal trade.

The British Metals Recycling Association said the proposed changes will simply push the trade in illegal scrap metal further underground. They said: “The proposed ban on cash transactions as part of the amendment to the Legal Aid Bill will not solve the problem and will simply push the trade to illegal scrap yards.”

The proposed measures are intended to end the current “low-risk transactions” for thieves who steal metal, including those who disrupt rail services by stealing cables, the Home Secretary said in a written statement to MPs.

Though BMRA welcomed the Government’s “increased focus” on scrap metal thefts, they instead recommended bringing metal transactions into the open and stricter enforcement of current legislation.

Scrapco Metal Recycling Limited manager Chris Wightman said the laws definitely needed a major overhaul but May’s proposals didn’t go far enough: “They’ve been talking about changing the laws for years and years, they’re very, very out of date. They first came into force in 1964 and they’ve never been updated: fines are still ten pounds which is ridiculous.”

Like BMRA, he claimed the new proposals would drive illegal scrap metal transactions further underground: “I’m not sure it will be policed properly, it will just drive it underground. You’ll get some bloke going around in a white van; he’ll probably just open up an account and become very rich.” He added that small, independent plumbers would likely be against the ban as it would be “nothing but an inconvenience”.

He said if a scrap metal merchant was “above-board” then it has nothing to fear from police being allowed to go undercover inside scrap yards to track the source of stolen metal.  “Sometimes we get raided [by the police] two or three times a day and we’re fine with that.”

Companies like Drakes Plumbing Supplies in Kent are staunchly in favour of any improvement to the scrap metal laws. They said: “We’ve had a lot of trouble in the past with break-ins, we’ve lost thousands of pounds worth of copper pipes over the last few years.” Drakes Plumbing supplies suffered three break-ins during 2009 alone.

Yesterday Labour Shadow Home Secretary, Yvette Cooper, called for greater police powers to enter scrap metal yards and close down dealers not obeying the rules.

Metal thefts have increased in recent years, with valuable materials being stolen from railways (causing disruption to 3.8 million passengers last year and costing more than £16m), church roofs, telephone exchanges and suppliers.

The metal recycling industry employs 8,000 people in the UK and is valued at £5.6bn.