28th April 2011

The UK government has introduced The Red Tape Challenge, an initiative to reduce some of the 21,000 active statutory rules and regulations that place the largest burden on society; thereby damaging new business and the economy. One area of focus, and therefore in danger of repeal, is the hallmarking of precious metal jewellery and silverware.

Hallmarking is a 700 year old institution and is the oldest form of consumer protection in the UK. The process – and the information that it gives to the consumer – is the envy of the world, and without it an unfair and huge responsibility would placed on the consumer to judge whether an article is suitable for purchase.

Far from being burdensome, the Hallmarking Act 1973 (and amendments) protects trade and consumers alike, so Johnson Matthey is urging the Department of Business to scrap its proposals and keep hallmarking regulations as they are.

Whilst the public is being asked to post comments about these regulations on the government-run website (www.redtapechallenge.cabinetoffice.gov.uk), the stated default presumption is that burdensome regulations will go unless government departments can justify their need.   

As a refiner and fabricator of precious metals, integrity, trust, and the need to safeguard reputation are at the cornerstone of Johnson Matthey’s business. Backed by hallmarking, our customers and partners in the jewelry trade also operate under the same philosophy. However, the removal of the regulations would potentially introduce unscrupulous business practices from those (in the UK or abroad) that currently cannot operate in the UK, creating a “buyer beware” culture that would bring an element of risk and suspicion to the retail purchase. The cost of regulation is not assumed by the State, but actually the trade and, ultimately, the consumer. That price is worth paying to protect all parties. 

The abolition of hallmarking would allow the introduction of new, low-cost, jewellery metals to the UK market. Without regulation, these metals (which could not be hallmarked under the current rules) would be able to compete on a level playing field with established precious metals, bringing a race to the bottom in terms of price and quality. These criteria for being competitive could only be met by manufacturing overseas and importing products into the UK, as is already happening in the US jewellery market.  

Recent history has shown that hallmarking has boosted new business in the jewellery sector, which is the government’s stated objective. The introduction of a new hallmark in January 2010 gave credibility to palladium as being a bona fide precious metal for jewellery, with the result being increased consumer confidence as evidenced by rising sales.  In 2010, 107,000 palladium items were hallmarked, compared to 45,000 items in the second half of 2009 after the hallmark was introduced.

If you are convinced by the arguments for retaining hallmarking regulations in their current form, and for protecting the UK consumer and jewellery trade, then please register your comments on:

http://www.redtapechallenge.cabinetoffice.gov.uk/hallmarking/