Extracts from Scottish Parliament proceedings: Deposit Return - Feb 22
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Extracts from Rural Affairs and Islands Questions Deposit return
Scheme (Drink Industry Supply Chain) 3. Sharon Dowey (South
Scotland) (Con) To ask the Scottish Government what discussions the
rural affairs secretary has had with ministerial colleagues
regarding the potential impact on the drink industry supply chain
of the introduction of the Deposit return scheme. (S6O-01902) The
Minister for Green Skills, Circular Economy and Biodiversity (Lorna
Slater) I...Request free trial
Extracts from Rural Affairs and Islands Questions Deposit return Scheme (Drink Industry Supply Chain) 3. Sharon Dowey (South Scotland) (Con) To ask the Scottish Government what discussions the rural affairs secretary has had with ministerial colleagues regarding the potential impact on the drink industry supply chain of the introduction of the Deposit return scheme. (S6O-01902) The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater) I have kept ministerial colleagues updated with developments during the implementation process. Most recently, earlier this month, I sent a letter to all MSPs that provided a comprehensive update ahead of the launch of the United Kingdom’s first Deposit return scheme. I will continue to keep Parliament up to date as we head towards the go-live date in August. I ask Sharon Dowey to adjust her microphone slightly before she comes back in. I have spoken to rural businesses, which have raised concerns about the 24 substantial steps that are required to register for the Deposit return scheme. The first step requires businesses to sign up to a three-year legal commitment, which will significantly change their operations and could even bankrupt them. If businesses fail to sign up by next week, they risk no longer being able to sell in Scotland, which could significantly impact the rural supply chain. Will the minister engage with those businesses to limit the impact on the rural supply chain and ask her Cabinet colleagues to listen to and address those concerns? I am taking very seriously the concerns that small producers have raised, as the member will note from the significant intervention for all producers, with a focus on small producers’ needs, that was announced on Tuesday—an increase in cash flow and simplification of labelling for small quantities. Tomorrow, I will meet small producers again to see what else we can put on the table to help them to comply with the legislation. I would encourage all producers to begin their registration process with Circularity Scotland by the deadline of the end of this month. Deposit return Scheme (Impact on Small-scale Drinks Producers) 7. Jamie Greene (West Scotland) (Con) To ask the Scottish Government what discussions the rural affairs secretary has had with ministerial colleagues regarding the potential impact of the Deposit return scheme on small-scale drinks producers. (S6O-01906) The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater) As I confirmed in my response to Sharon Dowey, I have kept ministerial colleagues updated with developments during the implementation process. The letter that I sent to all MSPs earlier this month details measures that we have put in place to support businesses, including small producers. I will continue to listen to the concerns of small producers and to hear whether there is any further action we can take to support them ahead of the scheme going live. As part of that listening exercise, the minister could listen to this. Philip Sisson runs Simple Things Fermentations, a small craft brewery in Glasgow. He has written to me today and would like me to say this to the minister: “DRS will have a catastrophic impact on my business and the craft sector. We survived the pandemic by producing quality products and offering excellent service, but that won’t be enough to get us through the chaotic implementation of a badly flawed DRS”. He further says: “small producers are being thrown under the bus”. Is he wrong? I met small producers a week ago on Friday, when we discussed their concerns in great detail, including their specific concerns around cash flow for their businesses and the costs around labelling of small quantities. On Tuesday, Circularity Scotland announced an intervention of £22-million worth of support for the cash flow of small businesses and a solution for labelling, specifically to support craft brewers, small wine importers and craft beer producers. That is a significant intervention to support those businesses, and I look forward to meeting them again tomorrow to find out whether there is anything further that we can do to support them to participate in the scheme. There are a number of supplementaries. I make the same appeal for brief questions and answers. Christine Grahame (Midlothian South, Tweeddale and Lauderdale) (SNP) I must agree with Jamie Greene. I have been written to by Traquair House Brewery in my constituency. Famous for its craft brews, it has been operating since 1965. It has a global reputation and exports around the world. All of its materials are sourced locally, and the malt is even put into a cattle feed. It tells me that, if nothing else is done, the Deposit return scheme will have a devastating effect on its business in all respects. I hear what the minister said, but— Question, please, Ms Grahame. —will the minister please listen to the small craft breweries? I take the considerations and concerns of small businesses very seriously. That is why I met them a week ago Friday, and why this week we have put in place a significant intervention. Circularity Scotland has announced £22 million of cash-flow support and a specific response to the concerns around labelling. Those were the issues that were raised with me by small business, and those are the solutions that have been put in place by Circularity Scotland. I will meet those businesses again tomorrow to take forward any further concerns. Colin Smyth (South Scotland) (Lab) The minister will know that a Scotland-wide tender was issued to American hedge fund-owned Biffa to provide collections under the Deposit return scheme. What assessment has the minister made of the impact on the small and medium-sized businesses in rural communities that are excluded from that decision, and which in some cases will lose existing contracts for recycling collections? Circularity Scotland is a private business and therefore its procurement processes are for it to decide. It is not a Government procurement process and Circularity Scotland may conduct procurement as it wishes to do. [Interruption.] When the Deposit return scheme comes online, the amount of glass and other recyclates in the system that is collected and cleaned for recycling will increase enormously. Kerbside recycling and other systems will still deal with non-scheme articles. Pasta jars, shampoo bottles and all such materials will still be part of the standard recycling scheme. [Interruption.] The Deposit return scheme specifically increases the volume and the quality of recyclate of scheme materials, which will increase our overall recycling in Scotland. Mr Lumsden, no more heckling from a sedentary position, please. Collette Stevenson (East Kilbride) (SNP) Can the minister outline the discussions that the Scottish Government and drinks producers have had? Will those discussions continue, particularly with small businesses, to ensure that the roll-out is a success? As briefly as possible, minister. As I have outlined to other colleagues, I am taking a pragmatic approach on the implementation of the DRS. I regularly meet industry stakeholders, including drinks producers, to get direct feedback on the scheme and to identify challenges and solutions. As a result of industry feedback, particularly from small businesses such as craft breweries, Circularity Scotland has announced a £22-million package of support for those producers. I will continue to engage with businesses. Indeed, tomorrow I will meet small drinks producers again to discuss their readiness for launch. Debate on Deposit return Scheme The Deputy Presiding Officer (Annabelle Ewing) The next item of business is a debate on motion S6M-07975, in the name of Maurice Golden, on launching a successful Deposit return scheme.
14:54 Maurice Golden (North East Scotland) (Con) We all want to see Deposit return succeed, and we know that it can. Look at the success that countries such as Latvia, where 93 per cent of the population regularly use a Deposit return scheme, have had. Improving recycling and reducing litter are goals that we all share, especially now that the Scottish Government’s recycling efforts have stalled. Its 2013 recycling target has still not been met, which is ironic given that it first committed to Deposit return in the same year. Despite having 10 years to prepare, it has left it to the last minute. I know about that, having spent the past decade working in the waste sector or here in Parliament calling on the Government to plan ahead by doing things such as creating a level playing field for small businesses, developing a reverse vending machine procurement framework, ensuring no council job losses and constructing a plastic recycling plan so that we retain collected materials in our economy. The Government has done none of that, so it finds itself in the middle of an almighty mess of its own creation. Stephen Kerr (Central Scotland) (Con) Does Maurice Golden read any significance into the fact that the minister who is responsible for this unfolding disaster is sitting very much alone on the front bench? She has no colleagues there to support her; no one is even sitting in the row behind her. That is striking and telling, because it is not only the minister’s fault. She has been in post since 2021, but the Scottish Government did next to nothing in the preceding years to launch a Deposit returnscheme. The latest gateway review concluded that “a fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule”. The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater) Unfortunately, I must correct the record for the member on that. The latest gateway review—the one that was completed in October last year—stated that it is feasible to deliver DRS by August this year. The member is quoting the gateway review from May last year, which is not the latest review. That is incorrect. I am quoting from the latest published review, which is from December last year. In my view, that is the latest review. Will the member take an intervention? I need to make progress, but I will come back to the minister. The Scottish Government has already had to postpone and scale back the online take-back policy, but it is determined to rush the scheme through regardless. I recognise that there have been attempts to address problems. We have had confirmation on labelling, and the removal of day 1 charges for retained United Kingdom barcodes and month 1 charges for all products. We have also had measures to reduce the administrative burden and help smaller producers with cash flow. We all welcome that, but where is the support for small retailers and hospitality? They have up-front costs, such as those for reverse vending machines, and added costs could see hefty price increases on stock orders. They face being out of pocket, with handling fees not covering their costs, despite the recent increase. The retail handling fees that will be offered in Scotland for manual return points are significantly higher than those anywhere else in Europe and are towards the high end of schemes elsewhere in Europe. Our scheme is comparable with and, in fact, more generous than similar schemes in Europe. I guess that we will find out in court, because the Scottish Grocers Federation is taking Circularity Scotland to court over handling fees. That is where we will find out whether the fees are fair. That is before we get to other challenges, such as container storage and insurance cover. It is incredible that retailers still do not have an operational blueprint, which forces them to take a best guess at how to spend around £250 million to be compliant. Meanwhile, wholesalers are waiting on solutions for stock and bonded warehouses and how the scheme will define an importer. Consumers face higher costs and reduced choice. One brewer estimates that the cost that will be passed on to shoppers could be as much as 40p per container, and the Scottish Wholesale Association warns that as much as 40 per cent of brands could disappear from Scotland. Let us not forget local authorities. Falkirk Council will stop collecting glass altogether, and other councils are considering reducing collections. We could see job losses, financial hits and poorer recycling services—that is hardly the expected outcome from a scheme that was designed to benefit our environment and communities. Will the member take an intervention? I need to make progress. There are still significant outstanding issues for producers. For example, the missing guidance on glass tolerances that will allow them enough time to introduce new accounting and invoicing processes and to address the UK’s barcode surcharge that will cost disproportionately more for Scottish producers. Then there is the producer agreement itself. Producers are being rushed to sign up to a scheme without knowing the full details or costs, and if they do not sign up, they cannot sell their products; it is a lose-lose scenario. When confronted with those problems, the Scottish Government hides behind the pretence that the scheme is industry led. Mark Ruskell (Mid Scotland and Fife) (Green) Will the member take an intervention? The member is in his last minute. Nothing could be further from the truth. This is a Government-run scheme, fronted by a secretive company that was put in place without a competitive or transparent process. The Scottish Government has so far refused to issue a section 5 order to allow freedom of information requests to be made to Circularity Scotland. It is a dereliction of duty that raises questions about procurement practices and dodgy dealings. I have spoken with dozens of businesses and trade bodies, and they all want Deposit return to succeed, but their good will is being eroded by a poorly planned process, and we need practical solutions such as an immediate review to consider how we can launch the scheme successfully. That could be done by extending producer registration until full costs are provided; granting small producers a grace period before joining; taking a phased approach to the introduction of the scheme; reviewing procurement processes so that small waste management companies are allowed to compete for collection contracts; helping retailers by boosting the handling fee; providing TUPE—Transfer of Undertakings (Protection of Employment) Regulations—cover for local authority and waste management staff who face redundancy; taking Circularity Scotland into special measures; and planning ahead with a business case for a digital system to future proof the scheme. The DRS has been rolled out in a manner that will destroy businesses—particularly small businesses—jobs and livelihoods. If the Scottish Government is willing, we can rescue Deposit return. I urge it to do so before we pass the point of no return. I move, That the Parliament believes that a Deposit return Scheme (DRS) can make a positive contribution to increasing the rate of recycling and reducing litter for drinks containers; recognises that the Scottish Government has been committed to introducing a DRS since 2013; welcomes the widespread support that the scheme’s environmental objectives have received from businesses, and recognises their concerns over key operational elements of the scheme; understands that businesses, and waste management experts have called for at least 18 months’ notice prior to the scheme launch, and that, with less than six months until the proposed launch, information is still required by stakeholders to both ensure compliance and maximise the operational success of the scheme; notes the findings of the Gateway Review Final Report, which stated that “…a fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule”, and calls for an urgent independent review of the launch date to enable a successful launch as soon as practically possible.
15:02 The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater) I welcome this opportunity to contribute to the debate. There were so many inaccuracies and so much misinformation in that opening speech that I scarcely know where to start, but I will start at the beginning and, hopefully, systematically correct the record and provide some useful information for members. In May 2020, three years ago, the Scottish Parliament agreed the Deposit and Return Scheme for Scotland Regulations 2020, which establish the approach and structure of Scotland’s DRS. The case for the scheme remains just as strong now as it was then. It will reduce carbon dioxide emissions by 4 million tonnes over 25 years; reduce litter by a third, cutting the £46 million of public money—that is local authority money—that is spent cleaning up litter every year; drive an increase in recycling rates from 50 per cent to 90 per cent of scheme materials; and increase the quality and value of that recycling, which will move us towards a more circular economy. In the context of the current climate emergency, Scotland needs a Deposit return scheme now. In line with the polluter pays principle, and just like similar schemes around the world, Scotland’s Deposit return scheme is being delivered and funded by industry. It is led by the scheme administrator, Circularity Scotland. I want to be constructive. Circularity Scotland Ltd—CSL—issued a contract for waste management collections to Biffa, which is owned by an American hedge fund. No small or medium-sized enterprise in Scotland was invited to tender for that procurement. Will the minister consider releasing the details of that procurement and explain to SMEs throughout Scotland why an American hedge fund is more important than them when they face financial ruin as a result of that procurement process? I am surprised to hear that a Conservative member thinks that FOI requests and that kind of scrutiny would be appropriate for private businesses, but I am sure that some of my Green colleagues would be interested if that is a new position that the Conservatives wish to put forward. CSL is now at an advanced stage—[Interruption.] I think that we need to hear the person who has the floor, which, in this instance, is the minister. Please resume, minister. Thank you. CSL is now at an advanced stage of building the infrastructure and logistics network that will underpin the scheme. Sites have been secured across Scotland to handle and process material. Counting equipment and vehicle fleets are arriving. Daniel Johnson (Edinburgh Southern) (Lab) The minister said at the outset of her remarks that there is a problem with information, yet what we have heard so far from her has been the case for DRS, which is not in dispute, and nothing to give us clarity. Is the inherent problem not with CSL itself? What will she do to tackle that, given that CSL is so central to her policy? CSL—and I will further enlighten the member on the details as we go forward—is at an advanced stage of building the infrastructure. That is happening. Recruitment is under way to create 500 new jobs in Scotland in processing and logistics. That is the work that CSL is doing. Just as importantly, CSL is working closely with businesses of all sizes to prepare for the launch in August this year and I am in no doubt that those preparations are well under way in the boardrooms, on the bottling lines and in the local supermarkets and small grocers. Liam Kerr (North East Scotland) (Con) Will the minister take an intervention? I will take one more and then I must make progress. I am grateful. Several small producers have publicly said that they are going to go out of business thanks to the proposed Deposit return scheme. Is the minister telling them that they are wrong? I take the concerns of small producers seriously. That is why we had an urgent meeting the Friday before last. This week, Circulatory Scotland has announced the launch of a package of measures to address those concerns—£22 million to support cash flow for producers and some practical solutions on labelling, which is what they asked for and we have delivered. I will meet them again tomorrow to see whether there are any further ways in which we can help them. I am afraid that I must make some progress now. As I have set out, I have been systematically working through industry concerns with the industry, Circularity Scotland and the Scottish Environment Protection Agency to ensure that pragmatic approaches to implementation are in place. For example, we heard concerns about the interoperability of the scheme with other schemes in the United Kingdom. As a result, CSL has confirmed that there are no Scotland-specific labelling requirements, and producers can retain existing and UK barcodes. We are working closely with other Administrations to maximise interoperability when DRS is finally introduced in other parts of the UK. We heard concerns that small retailers faced barriers to applying for an exemption from acting as a return point. As a result, we streamlined our exemptions guidance and application process last November—a move that was widely welcomed by businesses. That means that there is already a mechanism in place for many small retailers to be exempt from acting as a return point, if they wish to be, while maintaining a scheme that is accessible to all. We heard concerns about costs to producers, particularly around cash flow for smaller producers. As a result, CSL has reduced its producer fees by up to 40 per cent and reduced its day 1 payments for producers using UK-wide barcodes by two thirds. We heard concerns from online retailers and producers about the online take-back obligations. As a result, I confirmed last year that I proposed to phase in online take-back from 2025, while still protecting those unable to get to a physical return point. We heard concerns on planning needs, domestic rates, local authority collections, VAT on deposits and operational information. We have listed and acted on each and every one of those concerns. In the past two weeks, I have continued to meet representatives across sectors that are affected by DRS to understand their on-going concerns. For that reason, I greatly welcome Circularity Scotland’s announcement yesterday that it would provide a further— Minister, I gave a wee bit of latitude to the opening speaker because three interventions were taken. You have also taken three interventions; you will get the same latitude. You have 30 seconds left. Thank you. Thank you. Circulatory Scotland will not only fund cash-flow measures but remove day 1 and month 1 charges for all producers. To turn to the findings of recent gateway review reports, a gateway review is a short, focused review that is carried out at key points. In the case of this project, there have been four gateway review stages, which is normal for a programme of this importance and complexity. I am concerned to see quotes from the superseded May 2022 report being used in isolation, including in today’s motion. It is the October— Minister, please conclude now and move your amendment to the motion. It is the October review report that is the most up to date and the most relevant. That report concluded that “the DRS Programme has gained increased momentum and is in a much-improved position” and that go-live is now feasible. Minister, you need to conclude and move your amendment now, please. I move amendment S6M-07975.2, to leave out from “Scottish Government” to end and insert: “Deposit and Return Scheme for Scotland Regulations 2020, which establish the approach and structure of Scotland’s DRS, were agreed by the Parliament in May 2020; welcomes the recent progress made by Circularity Scotland, SEPA, the Scottish Government and the UK Government in finalising the key operational elements of the scheme; further welcomes the package of measures recently announced by Circularity Scotland to support producers; notes that the most recent review in October 2022 concluded that the DRS Programme has gained increased momentum and is in a much improved position; understands that Scotland’s DRS will make an important contribution to cutting climate emissions, and calls on the Scottish Government to continue to take a pragmatic approach to implementation, working with industry to identify and address concerns.”
15:10 Colin Smyth (South Scotland) (Lab) Labour supports the introduction of a viable Deposit return scheme—a view that is shared by the overwhelming number of producers, suppliers and retailers that, ultimately, will have to implement any proposals. An effective scheme would reduce our waste and our carbon emissions at a time when Scotland is failing to meet its climate commitments and is falling behind on recycling. As a producer responsibility scheme, it will ensure that producers pay for the clean-up of their products. We know that successful schemes are already up and running in 50 countries and territories across the world and that those schemes are likely to cover three quarters of a billion people by 2026. There is no question but that a successful Deposit return scheme would make a positive contribution in our journey to net zero. I am surprised, given that Labour accepts the huge environmental benefits of a Deposit return scheme, that members of the party signed a letter during recess claiming that there will not be any environmental benefits from the scheme. Which one is it: are there environmental benefits, from Labour’s perspective, or not? Our support for such a scheme cannot and will not blind us to the genuine concerns about the Government’s proposals as they currently stand, which Mark Ruskell does not seem to be interested in. It will not stop us from seeking to improve those proposals. Perhaps Mark Ruskell can think about and listen to some of our proposals. We welcome recent changes by the Government in relation to online take-back, exemptions, reduced producer fees—although those still remain higher than for other European schemes—and the announcement from Circularity Scotland, coincidentally on the eve of the debate, of some funding to partly address the cash-flow concerns of businesses. Those changes are a step forward, but we do not just need the minister to meet producers tomorrow, as she said that she will do; we need her to listen to their concerns and take more action. There remain a number of issues with the scheme as it is currently proposed that need to be addressed. Let us be clear: those concerns are not just about big business lobbying. They are primarily the concerns of small businesses, in my region and others, that are simply trying to survive. That includes the small gin distillery in Galloway that I recently visited. It has one stock keeping unit with one bottle design, but it will now need to order twice as many bottles with every order because of minimum order levels, although it has simply nowhere to store them. In the same way, the local shop that I spoke to at the weekend has nowhere to store glass bottle returns. The small cider brewer that I visited in Dumfriesshire is close to the border and he made the valid point that consumers will have less choice, as his fellow brewers only a few miles away on the other side of the border will stop trading in Scotland. Christine Grahame highlighted the case of the brewery in the Borders that told her that the 20p deposit is, in effect, a 20p price rise for its customers, as many of them are visitors who come from just a few miles away in England and will not be returning that product. If we want to talk about the role of big business, when I raised with the minister concerns about the decision to issue a Scotland-wide tenure to Biffa, which is owned by an American hedge fund, she dismissed the concerns of the Scottish small and medium-sized businesses that were excluded from being able to take part in the contract, many of which already provide collection services. Those businesses were not even consulted on that approach. That is not a just transition. Does the member share my concerns about the tender process? When the original tender was issued, it was for 2 billion containers per year. However, one week later, Circularity Scotland changed that to 3 billion containers a year, which led many waste management companies to tell me that that was a “reputational risk” and that they would not apply for the bid. Circularity Scotland and the Scottish Government also excluded SMEs from bidding for the process. I will give Mr Smyth a maximum of an extra 40 seconds. I share those concerns, including that small and medium-sized businesses were not able to participate in the tender process and that many will cease to be in business as a result. We want to work with the Government to make the changes that are needed so that the scheme that is delivered is successful and supports small businesses, because that would be a genuine jobs-first just transition. That is why Labour’s amendment asks the Government to, at the very least, consider further changes ahead of the introduction of the scheme, including a grace period of 18 months for small producers, during which their products would be treated as non-scheme articles. We have failed to give those small businesses the information that they needed for a fair lead-in time, and they should not be punished for the incompetence of Circularity Scotland and others. We should consider an opt-in rather than an opt-out option for small retailers, and exemptions for low-volume producers. I appreciate that I am running out of time, so I will make a final point. Many other concerns have been raised, including the decision to include glass without the inclusion of a smelt target, which raises fears that much of the glass collected could end up in road aggregate and not be recycled, and the failure to provide a full operational blueprint to businesses at least six months in advance of the launch of the scheme. Labour’s amendment proposes common-sense changes that would address some of those concerns and allow a scheme to go ahead but be phased in to minimise the impact for small businesses. That is crucial. If the Government is serious about a genuine just transition—a jobs-first just transition—I hope that it will support that and work with us to make the scheme work. I move amendment S6M-07975.1, to insert at end: “; acknowledges that an effective modern Deposit return scheme reduces carbon emissions and waste; welcomes the changes that have been made to the proposals since the regulations were first made; recognises that concerns from some businesses, in particular small producers and retailers, remain over operational elements of the scheme, and urges the Scottish Government to consider further changes ahead of any introduction, including a grace period for small producers, exemptions for low volume producers, and an opt-in for small retailers to ensure delivery of a viable Deposit returnScheme that helps meet Scotland’s net zero ambitions.”
15:15 Liam McArthur (Orkney Islands) (LD) I thank Maurice Golden for allowing Parliament to have this debate, and I congratulate him on flushing out a return of around £22 million from Circularity Scotland, aimed at addressing at least some of the serious concerns that have been raised over many months by smaller producers around Scotland, including in my Orkney constituency. With regard to the cost and cash-flow pressures that are faced by small brewers, distillers and so on, that additional support is undoubtedly welcome. Sadly, and more important, as one industry representative put it to me yesterday, “it doesn’t address the complexities of the scheme nor does it provide sufficient clarity to help businesses to prepare in time for the scheme going live in less than six months.” Therein lies both the problem and the case for an independent review. I applaud the efforts of Colin Smyth in his amendment to set out further improvements that could make a difference in addressing those remaining concerns. Those improvements are sensible and should be taken on board. However, there is now a very real risk that the minister and CSL will stumble on, week after week, amending, exempting and whittling away at their scheme. Why not pause, gather the evidence about what needs to be done and provide the clarity that is needed to make the scheme one of which Scotland can rightly be proud? Right now, the Government and the minister seem determined to press on whatever the cost to business, whatever the confusion for consumers and whatever the damage to support for the DRS itself. I understand absolutely the imperative to reduce waste, emissions and litter, and I recognise the urgency, too. However, we need to get this right and we are nowhere close to that position right now. Will the member give way? I will not. Previously, I have made the point that the Scottish Liberal Democrats were the first party to have a manifesto commitment to introduce a DRS, but the truth is that it has long been an issue that has commanded strong cross-party support, as evidenced by the debate so far. Like other party spokespeople, in the previous parliamentary session, I regularly met the then environment secretary, Roseanna Cunningham, to discuss the details of the Government’s scheme. At that time, like others, I expressed concern about the inclusion of, for example, glass, reflecting what I had seen at first hand in Norway, where the scheme has been operating successfully for years. Despite promises to learn from such international examples, the Government sought instead to go further and faster than the rest of the UK as an end in itself. That is perhaps justifiable in some policy areas, but, in the case of DRS, it actually sowed the seeds of many of the problems that we are seeing now. For months, I have been working with local stakeholders in Orkney, trying to get answers to the questions that they have about how the scheme will work in practice, particularly in a more challenging island setting. I am very grateful to Circularity Scotland and to Zero Waste Scotland for their engagement in various round tables and for the time committed to follow-up meetings. However, the fact is that too many questions remain unanswered, too much uncertainty hangs over the operation of the scheme and there is too much at stake if the Government gets it wrong. I urge the Government to pause, commission an urgent independent review and pave the way to making DRS a success here in Scotland, as we have seen it be in countries around the world. I support the motion and the amendment in the name of Colin Smyth. We move to the open debate. I advise members that we have no time in hand and that any interventions must be absorbed in the member’s time.
15:19 Brian Whittle (South Scotland) (Con) I appreciate the opportunity to contribute to the debate, albeit that I lament the need for the Scottish Conservatives to use their time to highlight the increasing disquiet that the industry is feeling around the proposed introduction of the Scottish Government’s Deposit return scheme, much of which has been ably highlighted by my colleague Maurice Golden. Let us be clear, Deputy Presiding Officer, that this policy is essential to our net zero target, and that its premise is universally accepted in this Parliament and the UK Parliament, across industry and by the public. However, the minister claims that this is an industry-led scheme. Really? Maurice Golden and I have spoken with literally hundreds of producers and suppliers over the months and we have yet to meet one that is leading the scheme. The consistent message is that we have a Scottish Government minister who will not listen or engage and who is blind to the serious concerns that are being raised across the whole industry. Many producers and retailers have significant issue with the way in which the scheme is being introduced, as it will have a specific effect on their viability. For example, I visited a fairly small but successful distillery that produces 5,000 bottles of whisky a year. Those are mainly for export, but it must carry a stock of 2 million bottles, because that is the minimum cost-effective run that a bottle producer will deliver. As a result, the distillery carries a four-year bottle supply. It has put aside £60,000 to pay the fines that it will need for using old stock, as doing so will cost less than ordering new stock once the scheme goes live. That is not an isolated case, and I note the case that Jamie Greene raised during portfolio questions earlier. It is incredible that the minister in charge of delivering the scheme answers so many direct questions with the response: “I don’t know the answer to that”. For example, I asked the minister about Circularity Scotland’s obligations to the banks on paying back its loans for the scheme and the potential impact of that on the timetable for its implementation. She said that she did not know and that she felt that she did not need to know. I looked up Circularity Scotland on the Companies House website and saw that the Bank of Scotland has a floating charge over the property or undertaking of that company. That matters, and it might go some way towards explaining why the Scottish Government is committed—or potentially forced, come hell or high water—to an August launch, irrespective of the impact on producers, retailers and hospitality owners. In some ways, it is understandable that the minister might not know the answers, as the lack of information is a problem of Circularity Scotland’s. Does the member agree that the minister needs to get a grip of that organisation and get it to do its job properly? Absolutely, because there is a risk in the arrangement for those businesses that are investing in Circularity Scotland. Should Circularity Scotland fail, the suppliers and the investors would lose their money. Given the level of support for a Deposit return scheme across the chamber and within industry, this legislation should have been a cakewalk for the Scottish Government. All that it had to do was to look at how similar schemes have been successfully implemented, talk with the industry, listen to its concerns, keep it close and ensure that it is part of the solution. However, that has not been the case and the calamitous result is what happens when those in the Scottish Government who are charged with delivering the scheme have no business acumen whatsoever. It is not too late to pause and then deliver a more cohesive and effective scheme. I urge the Scottish Government and the minister to heed industry’s concerns and have a rethink. Not to do so would have a devastating impact on the economic viability of many businesses and ensure that, in the end, it will be consumers who pay.
15:23 Fiona Hyslop (Linlithgow) (SNP) The Deposit return scheme is an important policy in Scotland’s drive to reduce carbon emissions, and the Scottish Government’s plans are ambitious, bold and necessary. There has been a shift from outright opposition to the DRS by some to acknowledgement and acceptance. However, I am concerned about how we have a successful launch and roll-out. I appeal to the minister on the need for her to be practical and pragmatic. Smaller businesses are facing unprecedented cost pressures from all directions, and we must be sensitive to that. Some say that the scheme has been rushed, but I remind members that, in May 2019, Roseanna Cunningham, the then Cabinet Secretary for the Environment, Climate Change and Land Reform, made the statement in the Scottish Parliament that a Deposit return scheme would be introduced in Scotland. It is worth repeating that a scheme, once it is introduced, will reduce littering by a third, increase recycling rates of single-use drinks containers from the current rate of around 50 per cent to 90 per cent and see a reduction of 4 million tonnes of carbon emissions over 25 years. Craig Hoy (South Scotland) (Con) The member makes reference to littering. On the basis that few pubs are a source of litter in the environment, is that not a reason to remove them from the scheme entirely? The people at the pubs that I go to do not tend to leave with bottles or cans. I think that, if the member had read the letter that Lorna Slater wrote to all MSPs, he would have seen it set out that pubs that use containers only within their premises would not be part of the scheme. I suggest that he reads the letter that was sent to us all by the minister. Deposit return schemes have proven to be extremely successful around the world, by raising recycling rates, reducing litter and saving carbon emissions. According to Zero Waste Scotland research, more than 70 per cent of the Scottish public supports the introduction of a DRS. Slovakia introduced its own Deposit return scheme in 2022. Officials there say that they are already seeing an uptick of more than 10 per cent in recycling after introducing a scheme such as the one that is proposed by the Scottish Government. Larger companies will have had the capacity to trial a Deposit return scheme in a number of their stores. Last September, I was pleased to visit Aldi in Bathgate in my constituency, which had already trialled acceptance of bottles and cans in exchange for vouchers for the business. I understand that Aldi has used feedback from customers who have used the scheme to inform its plans as it prepares for the nationwide roll-out. Experience and learning must be shared with smaller businesses in order to ensure a timely, successful launch of a Scotland-wide scheme. With just six months to go, however, it is the smaller businesses—both retailers and drinks producers—that have genuine concerns, such as the issue that Colin Smyth raised about storage, and they need to be addressed. The reduction in producer fees of up to 40 per cent and the two-thirds reduction in day 1 payments for producers are welcome, but small businesses—particularly retail businesses—might require on-going support. The announcement by the scheme administrator, Circularity Scotland, of a £22-million fund to support small businesses with the costs of participating in the scheme will make a big difference. Businesses need to have clarity on how VAT will be applied to deposits. The UK Government needs to respond to resolve that issue, to minimise risk to the Scottish scheme, which it was requested to do some time ago in relation to cross-border sales. Will the member take an intervention? Very briefly. Well, no, actually, in that you have 24 seconds left. [Inaudible]. Perhaps the minister can put it in her summing up. The further resolutions that have been set out in the minister’s letter to MSPs have addressed many of the points that Maurice Golden and others have raised. I would encourage the Government, in its understandable drive to deliver, to continue to be prepared, with the support of the Parliament, to have the space to be pragmatic and flexible so that it can meet the needs of smaller producers and retailers and deliver a welcome and needed Deposit return scheme for Scotland.
15:27 Claire Baker (Mid Scotland and Fife) (Lab) A successful Deposit return scheme should be an important part of Scotland’s drive to reduce carbon emissions and deliver the shift to net zero. International examples demonstrate what can be achieved. However, with only six months to go till the proposed launch, it is clear that we are still some way from a workable scheme. I recently joined with cross-party MSPs to write to the First Minister about the scheme, highlighting the review team findings that the scheme could not be made to work by August and pointing to the concerns that we are hearing from businesses. Will the member take an intervention? If it is regarding the report on the review, we quoted the one that was in the public domain, which is what the MSPs had to work on. I am very short of time, so I will continue. [Inaudible]. Minister, I do not think that the member has taken your intervention. Ms Baker, are you taking an intervention? No. I think that the minister was about to explain to me about the review team. The report that we used was in the public domain, and I think that it is reasonable that that is what the letter was based on. It is not enough to insist that the scheme will be a success by force of will; a lot of work is required to make it so. It is not clear at this stage how the scheme will work in practice for small producers, suppliers, retailers, hospitality and consumers. The scheme was first proposed by the Scottish Government in 2019. It was planned to come into force last July, but it was pushed back by more than a year, following feedback from industry. Although there have been some tweaks since—for example, on online takeback, reduced producer fees and exemptions—they do not go far enough to provide confidence to producers and suppliers. I can see where effort is being made to simplify the system, and I note the removal of the registration fee for smaller producers. However, the Scottish Government must recognise that, for many producers, particularly as they face increased energy costs and a cost of doing business crisis, the costs of the scheme will still be prohibitive. Those concerns have been raised by the Society of Independent Brewers. What will be the impact on small craft breweries who produce for outlets across the UK? Will they continue to sell in Scotland, or will the costs make them less likely to do so? Will smaller, boutique off-licences still be able to secure the same range of products? Those producers also face the additional costs of either changing labelling and barcoding for the Scottish market or being charged an extra payment over those that introduce new barcodes. Can the minister advise whether the stickering solution that is being developed for small producers will be cost free and whether it is only available for Scottish producers? There are questions for smaller retailers to do with the administration of return points and handling costs. Although I welcome the fact that some retailers can apply for exemption on the basis of proximity or environmental health, more information is needed on how those with premises that do not meet those requirements but where space is limited can meet their obligations as necessary. Small producers, retailers and hospitality businesses are desperate for clarity and feel passed between the Government and Circularity Scotland. Ministers need to show leadership by ensuring that Circularity Scotland addresses shortcomings, but the Government needs to accept responsibility for the lack of information and guidance. It is important to remember the context of the policy—it lies within not just the wider climate change agenda but the cost of living crisis, and we must be aware that any increase in costs for consumers at this point will be keenly felt by many. I realise that, under the model, the additional costs will be returned but, for too many families and individuals, any additional outlay in a week can push them into further difficulty. Households need to know how the scheme will work when it comes to storing and organising to return containers, alongside existing collections and arrangements for waste and recycling. I also have concerns about how the scheme will work for everyone, including those whose lives are unpredictable, people who move addresses or those who have other reasons for being less likely to participate. There are also questions about how the scheme will work for hospitality businesses, and particularly those that sell drinks for consumption on the premises and elsewhere. I do not feel that the minister’s letter to members addressed those issues. It is clear that the current proposals need to be improved so that we can be confident of a smooth introduction that will deliver the scheme’s aims as a key part of the circular economy in Scotland.
15:31 In principle, my party supports the idea of a Deposit return scheme. If it was run efficiently, we would support it. International evidence shows that a scheme can work. Many countries already have an effective system in place, and the United Kingdom Government is bringing in a DRS across England, Wales and Northern Ireland. Will the member take an intervention? I will take a very brief one. I have a lot to get through. I just want to understand at what point the Tory Party dropped its commitment to include glass in the DRS. Was it before or after the member’s party accepted a donation from the Wine and Spirit Trade Association? We are talking about something completely different that affects businesses in Scotland, right now—I will come on to that in a second. A well-thought-out Deposit return scheme can help to improve rates of recycling—[Interruption.] Ms Wells, could you please resume your seat for a second? I remind members that we should listen to the member who has the floor, which in this case is Annie Wells, and that I am not responsible for the content of members’ comments. Please resume, Ms Wells. [Interruption.] Sorry? We need to listen to Ms Wells, please. A scheme can decrease the amount of litter in our streets, it can help to protect our natural environment and it should be easy to introduce a scheme in which people purchase a drink container and a deposit is returned when the product is recycled. Therefore, we would have been happy to endorse the scheme, but we cannot do so, because the SNP-Green scheme is headed for disaster, and there have been so many times in the past that the SNP-Green Government has taken something positive and turned it into a negative. The current proposals for a Deposit return scheme are very controversial. Businesses say that they are unworkable and that the likely impact of the scheme’s introduction, if the SNP and Greens push ahead, will be the loss of jobs and a severe hit to economic growth. If members do not want to listen to us, they should listen to what small businesses are saying about the scheme. As reported recently in the press, one Glasgow-based brewer, Simple Things Fermentations, said: “We’re far from assured and in fact feel pretty confident that the scheme will be a disaster.” The brewer added that the scheme will “result in small shops closing and a massive reduction in choice for Scottish people after August.” That warning is from a brewer, but shops are issuing similar messages of caution. Glasgow’s Wee Beer Shop has said: “Retailers need to purchase and install expensive equipment to process returns—something my business has no physical space to host—I literally have a wee shop. I also have concerns about the ability of small shops to manually process and store returns ... It will be far too costly for us to arrange the pick-up of empty containers.” I spoke recently to a director of a small craft brewery in Glasgow who has now decided that he can no longer run his business due to the introduction of the scheme. It is not just businesses in Glasgow that will be affected; other businesses further afield have issued clear warnings about the scheme. Chris Jones, the co-founder of the international drinks company Paragon Brands, has said: “there is a huge number of smaller producers who have simply taken the option to stop selling in Scotland. The complications and the cost and the complexity involved in setting yourself up for this scheme just mean that the commercial returns are not there.” What has gone wrong here? Why are so many small businesses and local shops worried about the impact of the Deposit return scheme? Why are they fearful of the damage that the scheme could cause, when it is something that everyone could support if it was run effectively? The problem is that the SNP-Green Government is rank rotten at communicating and engaging with the business community. The scheme should have been designed for small businesses; they should have been the key people round the table. I know that I have gone past my time, Deputy Presiding Officer, so I will finish now. The funding that was announced yesterday came at the 11th hour. Finally, there was recognition of the huge costs that the scheme will place on businesses, but throwing money at the problem is not the same as improving the scheme. This is a shambles of a scheme, and I urge MSPs of all parties to vote against its introduction at this time.
15:36 Kaukab Stewart (Glasgow Kelvin) (SNP) Scotland is introducing a Deposit return scheme that, by definition, applies the polluter-pays principle, which means that people are economically incentivised to recycle rather than to waste. When someone buys a drink in a single-use container, they will pay a 20p deposit, which they will get back when they return their empty bottle or can. I remember doing that in the past with my wee ginger bottles. The scheme will help to tackle climate change, increase the quantity and quality of materials that are collected for recycling and decrease the amount of litter. In Europe, 10 countries—including Croatia, the Netherlands, Denmark, Germany, Iceland, Norway and Sweden—have already implemented Deposit return schemes, with significant positive results. My Glasgow Kelvin constituency has the second-highest number of businesses in any constituency in Scotland, so I understand and have listened to the concerns, including those from many small shops and hospitality venues. I note that hospitality businesses that sell drinks only for consumption on the premises do not need to charge a deposit to consumers or operate as a return point. Brexit, the pandemic and, now, the cost of living crisis have combined to make life very difficult for such businesses. I am assured that the Scottish Government recognises that and provides significant support. That includes the unique non-domestic rates package, which will continue to result in many SMEs paying no rates in the coming year and will mean that rates will be frozen for those who pay them. It is essential that businesses can participate in the Deposit return scheme with confidence. Under the scheme, retailers will be paid the highest return handling fees among comparable schemes anywhere in the world. The scheme will also deliver a cleaner environment for their customers, support their vital contribution to Glasgow’s 2030 net zero commitments and meet their customers’ aspirations for more sustainable lifestyles. I welcome the news that Circularity Scotland has announced £22 million of funding to support measures that respond significantly to the concerns of industry. The measures include the removal of day 1 and month 1 charges for all producers, the provision of two-month credit terms, and changes that simplify and reduce the costs of branding requirements. We must resolve any outstanding issues urgently, because we cannot afford further delay. The scheme was initially due to be introduced in April 2021, and it is estimated that the delay has so far resulted in more than 2 billion empty drinks containers that would otherwise have been recycled being discarded as litter, sent to landfill or incinerated. That represents 380,000 tonnes of entirely avoidable carbon emissions over that period. When Scotland introduced its world-leading legislation on minimum pricing of alcohol, some big producers in the drinks industry invoked a lengthy delay, despite the cross-party support for that policy in the interest of public health. Ten years on, a report by Public Health Scotland confirms that minimum unit pricing had no economic impact on the alcoholic drinks industry in Scotland. I trust that the Scottish Government will continue to listen and respond to the concerns from retail and industry. We must move forward with the Deposit return scheme with the urgency that the climate emergency demands.
15:40 Mark Ruskell (Mid Scotland and Fife) (Green) Well, well, well—first, the Tories backed a delay to Scotland’s Deposit return scheme; then they wanted it sped up; now, they are calling for it to be stopped. What a reckless anti-business message that sends out to the hundreds of businesses that have quietly invested millions of pounds in the scheme. Reverse vending machines are being ordered; product packaging is being reconfigured; staff training programmes are being rolled out; and new jobs are being created. The Tory flip-flopping and scaremongering on the DRS does not stop here. In the February recess, the dream team of Fergus Ewing and Maurice Golden hatched a letter that claimed that the DRS would actually be bad for the environment. How will the scheme be bad for the environment when it has been shown that it will reduce carbon emissions by 4 million tonnes over 25 years and will reduce litter by a third, Mr Golden? I will explain that simply. If a hospitality business has four waste streams, three trucks will pick that up. When the DRS comes in, the business will have six waste streams, which will mean five trucks. That is an increase in its carbon footprint. If Mr Golden was that interested in the DRS, he would have turned up to the committee sessions in 2019 when we took extensive evidence on all the issues. He would have experienced great delight in looking at all the evidence, which showed that there would be substantial reductions in carbon emissions. Look at the facts, Mr Golden. So much can change in a week in politics. Today, the Tories have flipped again and now claim that the DRS will actually be good for the environment, but just not yet—not with this scheme; now is not the time. We have heard it all before. We are told to wait for the UK Government to decide on an English scheme, which will not even include glass, despite glass having the biggest carbon impact and causing injuries to people, pets and wildlife as litter. The English scheme has been kicked down the road to October 2025 at the earliest. The Department for Environment, Food and Rural Affairs has now publicly undermined that launch date, which in effect hands big business the veto on any further progress. Right now, it is the big business polluters that are not paying. The Scottish DRS ensures that they, instead of consumers, will pay. At the moment, consumers have to pay twice—once at the shop for the drink and again through tax to pay for councils to collect bottles and cans, while the cost of littering, again, falls on the taxpayer. The DRS will cut costs for councils. All councils will benefit from reduced collection costs. I recently visited a plastic film recycling enterprise in Fife, which, if scaled up, could take most of Scotland’s film. However, councils’ kerbside collections are full to the brim with plastic bottles and cans, many of which cannot be easily recycled back to food-grade material. Finlay Carson (Galloway and West Dumfries) (Con) Will the member take an intervention? I am running short on time. The DRS will create space in our bins for councils to innovate and expand the range and volume of materials that are recycled, which will increase recycling rates. Any scheme that is as ambitious as Scotland’s DRS will have issues that need to be ironed out at the beginning. The concerns of small independent retailers and producers are being addressed. Yesterday’s announcement by Circularity Scotland has addressed the cash-flow issues and provided a simple labelling solution for producers of fewer than 25,000 units a year. Registration fees are being waived for some, producer fees are being reduced and handling fees are being increased for retailers. I am sure that other tweaks will come, such as online take-back requirements and exemptions from glass returns for some businesses. It is time to reject the Tories’ scaremongering and join dozens of countries around the world that are helping to save their environment through Deposit return schemes. I am proud that it will be Greens in government who deliver Scotland’s first DRS. I call James Dornan, who joins us remotely.
15:44 James Dornan (Glasgow Cathcart) (SNP) Thank you, Deputy Presiding Officer—I hope that you can see and hear me. I am delighted to take part in the debate, which brings back many happy memories of sweets that were eaten thanks to that age-old entrepreneurial activity of returning the empties. I welcome the widespread support across the chamber for the Deposit return scheme and I agree with the thrust of the Conservatives’ motion that “Parliament believes that a ... Scheme ... can make a positive contribution to increasing the rate of recycling and reducing litter for drinks containers”. We have heard that the evidence for that is overwhelming, and it is worth reiterating. A scheme that can reduce littering by a third, increase recycling rates of single-use drinks containers by up to 90 per cent and cut CO2 emissions by 4 million tonnes over 25 years is certainly worth welcoming. Deposit return schemes are being used in more than 45 countries around the globe, and it is estimated that, by 2026, 750 million people will be using one. The environmental benefits are well stated, but it is vital to acknowledge the role that the DRS will play as part of our wider efforts to create a circular economy, which will create a more sustainable future and much-needed green employment. Recently, Circularity Scotland announced a £7.7 million investment to transform an old engineering depot in Portlethen into a state-of-the-art recycling centre. We can see such investments and jobs replicated across Scotland with the introduction of the DRS as we transition to a circular, green economy. When local authorities are facing budgetary pressures, the scheme and the investment that it will bring could not come at a better time. There will be an overall net gain for most local authorities, with less waste to handle, and reduced litter and associated clean-up costs. Councils are estimated to have spent £18.2 million on higher levels of street cleaning; they have spent cash on picking up litter and emptying bins that could have gone to other public services. The DRS will deliver much-needed benefits. We have already seen the announcement of the £70 million recycling improvement fund, which will lend support to the aims of the DRS by supporting councils to modernise recycling services, align with the scheme and make it easier for households to recycle and increase local recycling rates. When I asked the minister about that recently, she said that the money that Glasgow City Council was to receive through the fund would support its investment in a new material recovery facility. She said that the DRS and other initiatives will form part of the Scottish Government’s waste route map, a final version of which will be published soon alongside its circular economy bill. I welcome that and I wonder whether the minster would like to use today’s debate as an opportunity to update the chamber on progress towards publication. Given the climate emergency that we face and the opportunities that transitioning to a green economy can afford us, the DRS and other initiatives are now essential. For those reasons, although I said that I could support the thrust of the motion, I cannot support delay. I echo Kat Jones, the director of the Association for the Protection of Rural Scotland, who said: “We are in the middle of a climate crisis, with litter plaguing our towns and countryside—the price of any further delay or weakening of the system would be frankly unbearable.” Finally, I ask members to consider all the young entrepreneurs who are champing at the bit for the scheme to come into force. Thank you, Mr Dornan. We now move to closing speeches. I call Daniel Johnson to wind up for Scottish Labour. You have up to four minutes, please.
15:48 Daniel Johnson (Edinburgh Southern) (Lab) Thank you very much, Deputy Presiding Officer. Fundamentally, we are here to debate not scrapping or getting rid of the scheme but how we will make it work. That is what is fundamentally important. Ultimately, what we are trying to do is ensure that we have a genuinely circular supply chain for food and drink and that we do not have a supply chain that relies on containers that ultimately linearly end up in waste but instead end up being reused or recycled, although ultimately, we need a system that requires reuse. However, the reality is that we are heading for a mess and we need urgent action to simplify and clarify the scheme because, otherwise, the impact on business will be intolerable. Quite frankly— Christine Grahame (Midlothian South, Tweeddale and Lauderdale) (SNP) Will the member give way? I will in a moment. We are six months away from the scheme coming into force, and no business can tolerate uncertainty about how it will manage its goods and products in less than six months’ time. No business can cope with not knowing what it should be investing in six months’ time. Perhaps very big businesses can, but the smallest ones cannot, and that is why we need urgent action. Will the member take an intervention? I think that Christine Grahame was first. On uncertainty for businesses, I raised my concerns about craft brewers at Traquair earlier. Dryden Aqua, which is an existing successful glass recycling company in my constituency, recycles glass into eco-friendly water filtration systems. According to Circularity Scotland’s rules, its business is not a recycling business. Nobody has mentioned existing recycling businesses yet. Does Daniel Johnson agree that that is yet another example of a reason why the scheme must be paused, particularly with regard to glass? Christine Grahame has raised another excellent example of why we have real confusion, six months out from launch. I do not want to see the scheme paused but, unless there is urgent action, it is headed for disaster. There is a lot of confusion. I have a lot of sympathy for the minister. I think that she has tried to do a great deal in a short space of time but, ultimately, there is confusion right now. Although she spent most of her time trying to explain the justification for the system, that is not where we are. People need to know how it will work. I say gently to Kaukab Stewart and James Dornan that people reminiscing about return schemes is, frankly, very unhelpful, as what they did is not what the scheme will do. We need a just transition, but the only way in which we will deliver one is through having a scheme that is robust and understood by those who need to operate it. That is why Fiona Hyslop was absolutely right to say that we need clarity for small businesses. As Claire Baker and Annie Wells pointed out, they have idiosyncrasies around what they supply, whether they are boutique retailers supplying niche products that they import or small businesses that will not be able to afford or physically install the DRS. As a retailer, I would not want to be handling broken glass on my premises, but we do not really have an answer. We do not have a practical blueprint for small retailers. Those are the sorts of things that may well be coming, and for which I would be grateful, but, for whatever reason, small businesses do not have those details now, when they need them. Liam McArthur was also right. The additional £22 million is very welcome, but the problem is the complexity. Although that might be an up-front cushion, many businesses are saying that the time that it will take for the moneys to come back to them is simply too long. If the money takes longer to come back to them than their terms with their customers and suppliers, they will be permanently out of pocket. No small business can afford that sort of impact to their cash flow. I am very grateful and pleased that Lorna Slater is having meetings, but she needs to get to grips with the matter. Although many of the issues are, ultimately, the issues and responsibilities of Circularity Scotland, it is her policy, and she needs to get to grips with them. As Brian Whittle pointed out, it is the roadblock because it is in a monopoly position and it is impeding the successful implementation of her policy. I call Lorna Slater to wind up on behalf of the Scottish Government.
15:52 Thank you very much, Deputy Presiding Officer. I point out to Daniel Johnson that, just because he does not fully understand the details of the scheme, that does not mean that I do not or that industry does not. [Interruption.] The answers to many of those questions are well known and well understood. [Interruption.] Before I— Minister, please resume your seat for a second. I ask members to please listen to the member who has the floor—in this case, it is the minister—or to seek to make an intervention, but not to continue with sedentary argy-bargy. Before I deliver my concluding remarks, I will approach some of the technical questions that members have raised in order to help them to understand the scheme better. We have gone into great detail about the support for small producers, so I will not cover that again. Some misinformation about support for return points has been communicated in the chamber. Return point operators are not required to invest in reverse vending machine technology. That is not true. Return point operators have three options on the table before them. Option one is a reverse vending machine, if that fits their business model and premises. Option two is to become a manual return point. We have the highest fees for manual return points anywhere in Europe—and, I believe, in the world. Option three is to opt out of becoming a return point through our streamline exclusion process, which an operator may do if it lacks storage space—some members have addressed that—or has health and safety concerns around glass, for instance. I will go into more detail on the questions about hospitality that a member to my left raised. Hospitality businesses that sell drinks only for consumption on the premises do not need to charge a deposit to consumers or operate as a return point. That is known as a closed-loop system. Circularity Scotland will collect scheme packaging from them free of charge and then refund the deposits that the business has paid to the supplier or its producer. That is how a closed point exemption will work. Will the minister offer a guarantee that, where Biffa collects from those hospitality businesses, Biffa will not offer to collect the other materials that SME waste management companies are already contracted to collect? Obviously, deals between any sort of supplier and any business are for them to work out among themselves. It is for businesses to decide what is best for them—that is not at all a matter for me to interfere with. I will round up my points on support for businesses and how the scheme will work. Any businesses that are looking for more information on the measures in question or how they can register for the scheme should contact Circularity Scotland’s customer support team at www.circularityscotland.com or on 0141 401 0899 to get the information that they need for their businesses. I am grateful to the minister for giving way, because it is clear that I misunderstand a great deal. Does she not recognise that, ultimately, the fundamental point is that, regardless of whether the information is correct or otherwise, businesses do not have that information? Is not the fundamental problem the fact that Circularity Scotland has not been getting the information to those businesses that need it? Circularity Scotland and I have been engaging with businesses and trade bodies to get the information out as quickly as we can. I encourage businesses that still have questions to get in touch with Circularity Scotland and SEPA to move the process forward. Scotland’s Deposit return scheme will launch on 16 August this year. I thank all those businesses that have made the investments, purchased reverse vending machines, sought planning permission and made the necessary process changes to get ready for the scheme. Will the minister give way? I am sorry, but I need to get through my remarks. The costs to those businesses of any delay or pause would be significant. Those businesses that have done the right thing and got themselves ready will absolutely benefit from that. When the scheme is launched on 16 August, the 20ps will start flowing through the system. With regard to Colin Smyth’s Labour amendment, I welcome the continued support for the DRS and the constructive approach that the amendment shows. Today, I have made it clear, as I have always done, that I and the Scottish Government absolutely recognise the concerns of some businesses—small businesses, in particular—and are working hard to address them. However, it is important to note that, in the case of small retailers, there is no need for an opt-in, as we have already introduced a simple exemptions process for small retailers. I regularly meet the Scottish Grocers Federation. Its concern is that small businesses might be left out. [Interruption.] They can opt out if they want to through our exemptions process. The Scottish Grocers Federation wants its businesses to be involved because of the benefits of increased footfall in being a return point. That is the benefit that it sees for its businesses, which it thinks will help them to succeed and grow. The changes that have been announced this week have been welcomed by Scottish businesses, and I am pleased that they have been welcomed in the chamber today. I hope that we can continue to demonstrate that the Scottish Government will work with industry. To that end, I will meet producer organisations tomorrow, to continue to explore what can be done to ensure that pragmatic approaches are taken to implementation, where those are needed. Will the minister take an intervention? The minister is just about to conclude. As I said in my opening speech, we will continue to listen, and that must include listening to communities and businesses that are calling so strongly for the DRS to be introduced. In the words of the environment community, Scotland’s DRS “cannot come soon enough.” Minister, you need to conclude. I call on Parliament to work with the Scottish Government, industry and others to deliver Scotland’s DRS. I call Liam Kerr to wind up the debate on behalf of the Scottish Conservatives.
15:58 Liam Kerr (North East Scotland) (Con) Well, it has been a torrid afternoon for the minister. She has been buffeted from all sides as her rudderless, ambiguous, half-baked scheme has been dissected and dismantled. If a picture paints a thousand words, we need only look at the empty seats and rows surrounding the minister. Her Scottish National Party partners have abandoned her rather than be associated with the scheme. Indeed, only one MSP from her own party could sit through the debate to support her. It is not surprising that those members do not want to associate themselves with the scheme in its current form. Brian Whittle said—and the debate has proved him right—that the policy is essential to our net zero targets, and it is one the premise of which is universally accepted, in this Parliament, in the UK Parliament, across industry and by the public. The minister rightly listed why it is so important that we get the scheme right. Colin Smyth began his speech by openly expressly supporting a viable scheme. However, we have heard that, only seven months out from its latest launch date, a scheme that was first committed to a decade ago, and which, it appears, has been worked on since 2019, is not only far from ready but, according to businesses, unworkable. My authority for that comes from the Scottish Government’s most recently published gateway review, which, as Maurice Golden highlighted, concluded that “a fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule”. Two reviews were published at the same time in December. One covered the period in May and one covered the period in October. The latest one, which covered the October period, says that the schedule is feasible. The member is citing out-of-date information. In fact, I am citing the most recently published review, as the minister has been told repeatedly this afternoon. Why is the scheme not in operation? Why can it not be? We have heard the Scottish Retail Consortium say that its members—who must sign up by 1 March, remember—still do not have an “operational blueprint”. We have heard that wholesalers are still waiting for a solution for warehouse stock. We have heard that producers are still missing key information. Consumers are facing reduced choice and higher costs—for example, an estimated additional 40p per container. The Scottish Wholesale Association warns that nearly half of drinks firms could disappear from Scotland. All that is before we even get into the fact that the Scottish Government’s own modelling predicts that more than 23 million drinks containers will be fraudulently redeemed every year, creating up to £108 million-worth of fraud. So many problems, yet the minister barrels on regardless. In her amendment, the minister calls for a “pragmatic approach ... working with industry”, yet she brazenly failed to mention receiving an open letter from more than 600 businesses pleading with the Scottish Government to listen to them. Her pragmatic approach is somewhat exposed by her admission just last week that at no stage did she speak to a single expert operating DRS schemes in other countries, such as Holland, Germany or Sweden, which has had a scheme since 1984. When Mark Ruskell and Kaukab Stewart praised other countries, they failed to mention the significant differences between what is proposed and what works. Solutions are available if the minister will listen—we have heard them here today. Indeed, earlier this week, I read that the Federation of Small Businesses was pleading for a pause to the scheme as, it says, “confusion reigns”. Last week, the Scottish hospitality group said: “This must be stopped and rethought. The only way workable is to pause, rethink, get proper guidance from industry and professionals, and join the rUK scheme due in 2025”. Will the member take an intervention? Yes. It will have to be very brief, Ms Grahame. Does the member include in his list the existing glass recycling companies in Scotland, which had to seek a meeting with Circularity Scotland as it had not reached out to them? That is an extremely important point, and utterly shocking. In terms of solutions, Liam McArthur spoke well. He asked: why not pause instead of whittling away at the scheme? Daniel Johnson really got to the nub when he said that we should simplify and clarify. Members added to that things such as extending the producer registration period, granting more producers a grace period, granting an exemption for low-volume producers, helping producers maintain cash flow by allowing a 60-day payment, and addressing the apparent inexperience at Circularity Scotland. I will conclude with a quote from a small business in my region. It said to me: “Lorna Slater said a few days ago she wanted a scheme ‘more ambitious than other nations’. Her personal ambitions, her lack of knowledge, as well as her disconnect from the rest of the UK will harm the Scottish drinks industry”. He is right. The debate has made it clear that we all want Deposit return to succeed, and throughout it we have all highlighted the concerns and reiterated the solutions. If the Scottish Government is willing, we can still rescue Deposit return, so I urge the minister to put aside her personal ambition at decision time, vote for the motion in Maurice Golden’s name and work with all of us to save the scheme before it is too late. That concludes the debate on launching a successful Deposit return scheme. There will be a short pause before we move to the next item of business, to allow front-bench teams to change position should they so wish. |