Scottish Parliament statement on the Deposit return Scheme - Jun 7

The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater)

In 2020, the Scottish Parliament voted for a Deposit return scheme for single-use drinks containers in which the onus for dealing with the disposal and reuse of those containers is placed on the companies that produce them—the polluter-pays principle. The Parliament did so because it looked around the world and saw that Deposit return schemes worked, with more than 50 schemes worldwide. It did so because it recognised the benefits of dramatically reduced litter, a step change in recycling rates and having yet another tool in the fight against climate change, as well as that those benefits increase the larger the scope of the scheme is. It did so because the case is strongest, both economically and environmentally, where schemes are all-inclusive. It did so because it took in good faith a United Kingdom-wide agreement on the introduction of Deposit return schemes that include glass. After all, only a few months before, the UK Government had been elected on just such a promise. Rishi Sunak, Alister Jack and Douglas Ross were all elected on the promise of a full Deposit return scheme.

The Scottish Parliament voted for that all-inclusive Deposit return scheme because it was the latest in a long list of ways in which it has used its powers to deliver distinctive and progressive policies for Scotland, such as the Scottish child payment, free bus travel for under-22s, better rights for tenants, free tuition for students and the indoor smoking ban.

That is the context in which I am updating Parliament today.

Last week, I told Parliament of the communication from the UK Government that, at the 11th hour, imposed a number of highly significant conditions on our scheme, including the removal of glass. It did so by refusing to agree a full exclusion from the United Kingdom Internal Market Act 2020 after almost two years of discussion.

The UK Government has offered no justification for removing one of the most significant aspects of the scheme, which the Scottish Parliament voted for—namely, the inclusion of glass. The decision letter says:

“The UK Government notes the strong representations made by relevant businesses”.

The environmental and economic case for including glass in our DRS is clear, and the scheme follows the majority of schemes operating successfully around the world. Glass is one of the three main materials used to make single-use drinks containers, and it accounts for more than a quarter of all the containers to be included in our Deposit return scheme as planned. It is one of the most common items to pollute our beaches, and broken glass poses a hazard to children, pets and wildlife. Local authority, private sector and voluntary clean-up crews are left to deal with littered glass.

Indeed, the UK Government’s own analysis quantified those benefits and acknowledged that the social and economic benefits of DRS are increased by 64 per cent when glass is included. That is why the Scottish Government proceeded in good faith to include glass in our DRS, backed by the Scottish Parliament, and that is why businesses have invested millions of pounds in the infrastructure to handle glass.

Up until March 2022, the UK Government itself had planned to include glass in the English scheme. As recently as January this year, it also confirmed that Wales would include glass in its DRS and that it was for each of the devolved nations to decide on the scope of its DRS.

However, this is not just about glass. An even bigger act of sabotage comes from the UK Government’s imposing a number of other conditions, including a maximum cap on deposit levels agreed across all nations, one administration fee to cover all schemes across the UK, one barcode for use across all parts of the UK, and one logo for all schemes. Those aspects are all absolutely legitimate areas of discussion in relation to the alignment and interoperability of schemes. However, the critical point right now is that the UK Government cannot tell us what those are or when they will be finalised. Indeed, it cannot tell us whether they will even appear in regulations or whether, as appears likely, they will be delegated to a scheme delivery body that is at least two and a half years away from being established—a body that will not be empowered to deliver a DRS in Scotland.

The Scottish Government has said from day 1 that we recognise the need for alignment and for schemes across the UK to work in tandem. However, let us be clear: Scotland has proceeded as planned. Wales, too, has worked on the basis of the common UK position—[Interruption.] It is England that has chosen to step out of line. In matters of alignment—[Interruption.]

The Presiding Officer

Minister, please allow me a moment. It is really important that the statement is heard without intervention or interruption. I would be grateful if we could proceed on that basis.

Lorna Slater

Thank you, Presiding Officer.

In matters of alignment, whose line is it? Is it just the line of the biggest player on the field?

We are being invited to go ahead with a scheme in Scotland in which rules that we set now can be changed unilaterally by the UK Government at any time. I sought a further meeting with my ministerial counterpart in the Department for Environment, Food and Rural Affairs to seek assurances that we could have a stable basis on which to go forward, but it is clear that the UK Government has simply not yet done the work and is not in a position to give the assurances that Scottish businesses need.

Earlier today, the First Minister and I met a wide range of businesses to discuss where the UK Government’s 11th hour intervention leaves us. I am grateful for the constructive and focused feedback that we received today. The single biggest message from business is the need for certainty—for planning and investment. The UK Government’s conditions blow a massive hole in any certainty.

Since we received the UK’s decision 12 days ago, we have engaged intensively with delivery partners, including Circularity Scotland and industry, to understand how the decision affects their preparations for the launch of Scotland’s DRS. The removal of glass and the imposition of as yet unspecified conditions have been pored over intensively. Although Circularity Scotland has been optimistic that the scheme could go ahead without glass, the feedback from producers, retailers and hospitality is overwhelmingly that they cannot prepare for a March launch based on the changes that are required by the UK Government without any certainty even about what those changes might be. Because the delivery of DRS is an industry-led project, those views are critical.

Today, the First Minister and I heard that industry, in turn, recognises the enormous amount of work carried out by its body, Circularity Scotland, on its behalf and acknowledges the case for sustaining a delivery vehicle for the DRS to come.

The UK Government’s decision excludes glass from Scotland’s DRS at the 11th hour, contrary to the will of the Scottish Parliament and the all-UK basis on which we planned. It changes the playing field for non-glass drinks producers. It creates massive new uncertainty for business by imposing conditions for interoperability with schemes in the rest of the UK that have not even been legislated for and which even then might not be clear.

Yesterday, I told Parliament that our scheme cannot proceed as planned. The refusal of the UK Government to budge on glass alone makes that obvious. As of today, it is clear that we have been left with no option other than to delay the launch of Scotland’s DRS until October 2025 at the earliest, based on the UK Government’s current stated aspirations.

I remain committed to interoperable Deposit return schemes across the UK, provided that we can work in the spirit of collaboration, not imposition. I wrote to the UK Government again last night to urge ministers to reset a climate of trust and good faith, and to galvanise and retain the knowledge that has been built in Circularity Scotland and DRS partners in Scotland.

Today, I have written to the Net Zero, Energy and Transport Committee in Parliament to say that we will be seeking to revisit the regulations that we laid in Parliament in mid-May, which set our launch date of 1 March and made other changes to the scheme. The immediate priority is to bring forward regulations to amend the go-live date. Subsequently, I will also consider how to bring forward revised provisions to deal with the UK Government’s exclusion of glass and how best to reflect the decisions made so far by the Scottish Parliament.

Let me be clear: the Scottish Parliament voted for a Deposit return scheme. I am committed to a Deposit return scheme. Scotland will have a Deposit return scheme. It will come later than need be. It will be more limited than it should be. It will be more limited than what Parliament voted for and more limited than what I want, what other devolved nations wanted, and even what the Tories wanted at the time of the last election.

Those delays and dilutions lie squarely in the hands of a UK Government that, sadly, has so far seemed more intent on sabotaging the Scottish Parliament than on protecting our environment. [Applause.]

The Presiding Officer

Thank you. Continue, minister.

Lorna Slater

However, I will work as hard as I can with the UK Government and other devolved Governments to play the hand that we have been dealt—for a cleaner environment, for less waste, and to meet our climate targets. It is our future.

The Presiding Officer

The minister will now take questions on the issues raised in her statement. I intend to allow around 20 minutes for questions, after which we will move on. I would be grateful if members who wish to ask a question press their request-to-speak buttons now.

Maurice Golden (North East Scotland) (Con)

I thank the minister for advance sight of her statement.

Let us be clear: the scheme had already failed long before any intervention by the UK Government. Today’s statement reflects the key concern of businesses about having a scheme that works across the United Kingdom. I believe that we could have saved a great deal of time and energy if the Scottish National Party and the Greens had listened to those businesses in the first place. Nevertheless, this is an attempt to salvage something from the wreckage of a disastrous scheme.

Just days ago, the minister and the First Minister were indulging in reckless scaremongering, threatening to scrap the scheme if glass was not included. They tried the old nationalist trick of picking a fight with the UK Government, but it backfired. [Interruption.] They were rumbled, misrepresenting one of Scotland’s leading drinks producers. Then, Circularity Scotland and the logistics partner Biffa both confirmed that the scheme can go ahead without glass.

The fact remains that, just days ago, the SNP and Greens were ready to abandon the Deposit return scheme. Humza Yousaf announced that

“the removal of glass fundamentally threatens the viability of Scotland’s DRS”.

Can the minister tell us: was the First Minister using glass as an excuse to ditch the scheme, or did he just not know what he was talking about?

Lorna Slater

I am unclear whether the member understands the situation as I have laid it out. [Interruption.] As I have set out, we will look forward to a date of October 2025 for Scotland’s Deposit return scheme, which is the earliest possible date by which the UK Government has committed to delivering its scheme.

The main conditions that have been applied to the scheme through the use of the United Kingdom Internal Market Act 2020 place us in an impossible position. Going ahead of the UK would mean asking businesses to comply with regulations that we have not seen yet. For example, in its letter to us on IMA exclusion, the UK Government stated that it wants to set a maximum cap on deposit levels. This Parliament passed regulations for a Deposit return scheme with a 20p deposit. If the UK set the cap at 10p, 15p or 30p, that would be a substantial change for Scottish businesses. How are we to proceed with a scheme on the basis that we have to wait for the UK Government to make that kind of decision before we can give business any certainty?

That is the impossible position that the UK Government has put us in and the basis upon which we are being forced to delay the scheme beyond what we would have liked.

Sarah Boyack (Lothian) (Lab)

I have to say that the late notice of the statement did not assist with parliamentary scrutiny.

On the content of the statement, it is clear that Scotland is paying the price for two bad Governments, both of which seem more interested in a constitutional fight—[Interruption.]

The Presiding Officer

Let us hear Ms Boyack.

Sarah Boyack

I know that members will not all agree with me, but let me say what it is: it is a constitutional fight rather than constructive work with each other and—critically—stakeholders to get a viable Deposit returnscheme that works for the whole of Scotland.

Yesterday, the minister refused my constructive suggestion that she meet a key stakeholder. That was on the back of the decision that the contract be handed to a US hedge fund instead of the scheme being co-produced with our local authorities and the Government’s refusal to meet key stakeholders or provide clarity or certainty to producers or businesses over the past two years. The UK Government, on the other hand, is acting utterly indefensibly, given its own manifesto pledge, instead of getting round the table to find a scheme that works.

Now that we have another delay, will the minister tell the Parliament how she will act in the next two and a half years to ensure that—finally—we get a scheme that is a success, that will increase recycling and that will reduce waste?

Lorna Slater

I thank the member for that constructive question, because the question is how we move forward in the next two and a half years with a UK Government that has been a bad-faith actor throughout.

Initially, the UK Government said that it would put glass into the scheme, and it then removed it. As recently as January, it said that devolved nations could do what they liked, and it then changed its mind in May and said, “Oh no, you can’t do what you like.” The UK Government dithered for months and months about giving us the clarity that businesses need on how VAT would be handled by the scheme, and it still has not given us the answers that we need on trading standards for shelf-edge labelling.

We are—absolutely—working in good faith. We went through the stages of the common framework decision, and we have published those stages and the communiques associated with them. At every point, we acted in good faith, working towards the UK Internal Market Act 2020 exclusion. It is the UK Government that has changed its mind.

When the First Minister and I met industry representatives this morning, they highlighted the fact that the list of uncertainty issues includes ones on which the UK Government still has not given certainty. It is now for the UK Government to work through those issues. It needs to pass its regulations, bring us certainty on trading standards and answer the questions that it has taken the power away from this Parliament to answer.

The Presiding Officer

There is much interest in the subject, as members would expect. I would be grateful for concise questions and responses.

Clare Adamson (Motherwell and Wishaw) (SNP)

The common frameworks that were agreed between the UK Government and the devolved legislatures of the UK were the mechanism by which constructive engagement would facilitate regulatory divergence and respect the devolution process. By invoking the UK Internal Market Act 2020 on the Deposit return scheme, has the UK Government irrevocably damaged the frameworks process?

Lorna Slater

That is a serious concern that we should all have. The UK Government appears to have torn up the common frameworks—the agreements by which the Governments work together. My Labour colleague asked us to work in a spirit of good co-operation with the UK Government, and those frameworks were how we did that. The UK Government has torn them up and it is not at all clear to me how we move forward if that tool no longer exists for co-operation between the Governments. That should be deeply concerning to all of us.

Liam Kerr (North East Scotland) (Con)

On 23 May, I asked the minister how much the Scottish Government had budgeted for its DRS. She did not know. On 30 May, I asked again. The minister did not know but said that she would write to me imminently. It is taxpayers’ money and a competent minister ought to know the figure, so I ask the minister again: how much has the Scottish Government budgeted for the scheme and what impact will her decision have on the budget?

Lorna Slater

I am sure that the member has seen the representation in letters from Biffa and Circularity Scotland, which detail the level of investment that industry has made in the scheme. It is an industry-led and industry-funded scheme. Biffa has cited tens of millions of pounds that it has invested. [Interruption.]

The Presiding Officer

Let us hear the minister.

Lorna Slater

Circularity Scotland has cited the hundreds of millions of pounds that have been invested, collectively, by members of the industry in the scheme. The scheme is to be funded by industry. It is not a Government-funded scheme.

Clare Haughey (Rutherglen) (SNP)

Scotland had its Parliament restored to afford this country a measure of self-government, but Westminster has blocked Scotland at every turn, on equalities issues and now on environmental issues. The UK Government is making a mockery of devolution by trying to hollow out the powers of our Parliament, and the Scottish Tories are happy to be complicit in that.

If we are not to use the powers of devolution to prevent waste and litter to tackle environmental and social issues, what exactly is devolution for?

Lorna Slater

The member is exactly right. The purpose of devolution is to allow us, in Scotland, to make different rules that might apply to our different situation. We have used the powers of devolution successfully to make progressive changes to improve the lives of people in Scotland, such as free bus travel for under-22s and the implementation, earlier than the UK Government, of a ban on smoking.

At the time of the implementation of the smoking ban, the UK Government did not have the powers under the United Kingdom Internal Market Act 2020 that it has now. We can only imagine how the UK Government might have used those powers to delay Scotland implementing a smoking ban. It has now given itself such powers, which it can use to intervene on devolved issues. The UK Government can now interfere with and block many things that we do to protect our environment and deal with social issues. That should concern all of us who believe in Scottish devolution.

Mercedes Villalba (North East Scotland) (Lab)

The minister has just described the UK Government’s approach as an “act of sabotage”, but it is this Government that is cancelling the scheme after spending £218 million—[Interruption.] Yes, the Scottish Government has spent £218 million—it is there in black and white on the Scottish Government’s website—[Interruption.]

The Presiding Officer

Let us hear Ms Villalba.

Mercedes Villalba

—with no proposed alternative to meet its target of recycling 70 per cent of waste by 2025.

Will the minister be honest with the public and take some responsibility for the fact that the SNP and the First Minister himself sabotaged the scheme by repeatedly talking it down during their bitter leadership contest? [Interruption.]

The Presiding Officer

Members! I remind you of the need to conduct business with courtesy and respect.

Lorna Slater

As I told the Parliament when we introduced the delay from August this year to 1 March next year, it is the UK Government’s delay in granting us an exclusion from the internal market act that has caused the uncertainty.

The pot was stirred by the Secretary of State for Scotland in February of this year. In January of this year, the UK Government’s own documentation said that it was for the devolved nations to make decisions on the scope of their schemes. The Secretary of State for Scotland then sowed doubt in all our minds by threatening to use the internal market act to block our scheme. At that point, the friction on delivery of the scheme and the uncertainty that had been created by the words of the secretary of state meant that I had to come to Parliament to announce a delay.

The secretary of state has now made good on his threat and has implemented a version of the IMA exclusion that is only temporary, which puts us in an impossible position. I will share with Mercedes Villalba the example that I shared with her fellow member earlier. The UK Government has said that the maximum cap on deposit levels will have to be agreed before our scheme launches. The UK Government has not set a cap on deposits, set a deposit or passed its regs. What if the UK Government’s deposit is 10p or 30p? We cannot tell Scottish businesses to go ahead with the scheme when we do not even know what the deposit amount is. The UK Government has put the Scottish Parliament and the Scottish Government in the impossible situation of having to ask Scottish businesses to comply with regulations that do not even exist.

Kaukab Stewart (Glasgow Kelvin) (SNP)

Polling that was conducted in 2021 indicated that one in 15 Tory MPs do not believe that climate change is real and that 9 per cent of Tory MPs said that they did not accept that there is a scientific consensus on human activity causing climate change. The Conservative Party reportedly received £3.5 million from individuals and entities linked to climate denial—among other things—last year.

The Presiding Officer

Is there a question, Ms Stewart, and is it related to the statement?

Kaukab Stewart

Minister, are those really the people who we want telling us that we cannot pass environmentally conscious legislation?

The Presiding Officer

Please respond on matters for which the Government has general responsibility.

Lorna Slater

The UK Government has shown no commitment to tackling climate change, and this is another example of the Scottish Parliament voting to take practical action to deal with the climate and nature emergencies and the UK Government interfering to block it.

Liam McArthur (Orkney Islands) (LD)

Let us remember that this is the fourth delay to the introduction of the DRS. Is it the case that the DRS is only the latest victim of two Governments that see political advantage in stoking division and indulging in constitutional spats? What does the minister plan to do to provide reassurance to businesses across Scotland?

Lorna Slater

The First Minister and I met representatives of businesses today, and certainty is exactly what they are asking for. The uncertainty that is being created is being created by the UK Government, which delayed its decision on the internal market act and which is now asking Scottish businesses to comply with regulations that do not even exist. That is absolutely the kind of uncertainty that Scottish businesses cannot tolerate.

The Scottish Government has worked at all times as a good-faith actor by following the common frameworks and agreed processes. We can see that the UK Government has not done so. I wrote to my counterpart at DEFRA yesterday to ask for the opportunity to reset our relationship so that we can work together in good faith from now on. That is very much how I would like to proceed. I have yet to hear back from her.

John Mason (Glasgow Shettleston) (SNP)

As the minister has just said, businesses and producers have invested millions of pounds in the scheme, and the UK Government has now dealt a massive blow to the certainty that they had previously. Can she offer any hope or comment on the uncertainty for businesses?

Lorna Slater

As I have said to other members, the First Minister and I met business representatives this morning to discuss what they need, and they said that they need certainty on what the regulations will look like—on basic things, such as what the deposit will be. The Scottish Parliament said that it would be 20p, but what will the UK Government say? What will the UK Government say about how the scheme administration works? What will the UK Government say about barcodes and labelling? Those things are entirely unknown and uncertain.

I have written to my UK counterpart to ask that we have a constructive dialogue on those matters. I have yet to hear back from her, but I hope that we can work towards that so that we can have a successful launch of Scotland’s Deposit return scheme.

Jamie Halcro Johnston (Highlands and Islands) (Con)

Will the minister tell me what analysis she has undertaken of, and what estimates she can give about, the cost to businesses—which will now not be recovered, at least in the short term—because of her shambolic attempt at a roll-out? Has the Scottish Government taken legal advice relating to any compensation schemes?

Lorna Slater

We have, of course, taken advice from many quarters on how to proceed with the scheme. We know that businesses in Scotland have invested hundreds of millions of pounds ahead of the launch of the scheme based on the regulations that were passed by the Parliament. We thank all the businesses that made that investment in good faith, and we look forward to working towards launching Scotland’s Deposit returnscheme so that those investments can be put to good use.

Mark Ruskell (Mid Scotland and Fife) (Green)

People who have been campaigning for years to get a Deposit return scheme will be, justifiably, incredibly angry and worried about the delay, which has been caused by the utter contempt that is shown towards the Parliament by the Westminster Tory Government. What does the minister say to people who are worried about the likely impact on Scotland’s environment and the impact on our democracy in Scotland?

Lorna Slater

I say to those people that I share their concerns. I share their concerns that the UK Government is not committed to protecting our environment and that it will seek to block any legislation from the Scottish Parliament to prevent damage to our environment and to tackle the climate emergency. Some of the businesses that the First Minister and I spoke with this morning said that they had already worked for six or seven years with the Scottish Government towards getting the scheme launched.

It has been an enormous investment on our part and on the part of Scottish businesses, and to have it torpedoed at the last minute by Alister Jack, who has used the clumsy tool of the 2020 act to prevent the scheme from going forward as this Parliament passed it, is extremely frustrating.

Fiona Hyslop (Linlithgow) (SNP)

The UK Conservative Government that Scotland did not vote for is, yet again, holding Scotland back and preventing democratically supported policies and laws from being implemented.

Does the minister agree that being held back by the slowest Deposit return scheme in the convoy when other international countries already have a scheme does not tackle waste or pollution or help the environment? Also, what state is the partial Deposit return scheme for England actually in, and what guarantee is there that it will even be ready for 2025?

Lorna Slater

It is not only the slowest scheme but the least ambitious one. The UK has dragged both Scotland and Wales down to the lowest common denominator. Deposit return schemes are normal. There are more than 50 such schemes around the world. It is normal to have a system in which industry pays to collect and recycle the materials that it produces. In the UK and Scotland, that cost has to be borne by the taxpayer—that is not normal and it is not the way forward.

As to the UK scheme, we do not know what state it is in—no regulations have been passed and there are no dates for when the legislation might be passed. The UK Government says that it will happen in October 2025, which is the date that it aspires to. That is the date that we will aspire to because that is the best information that we have at this time. However, as with all these matters, until the UK can give us certainty on that, we will have to treat that date with some degree of scepticism.

The Presiding Officer

That concludes the ministerial statement on the Deposit return scheme. My apologies to those