Meeting of the Parliament

Meeting date: Tuesday, May 30, 2023

Official Report 990KB pdf

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Deposit Return Scheme

The next item of business is a statement by Lorna Slater on the deposit return scheme. The minister will take questions at the end of her statement, so there should be no interventions or interruptions.

14:49  

I am grateful for the opportunity to update Parliament today on the latest position on the United Kingdom Internal Market Act 2020 exclusion for the deposit return scheme. I am doing so at the earliest opportunity, having received a letter from the UK Government late on Friday evening, after almost two years of discussion.

Scotland’s deposit return scheme is based on a simple producer-pays principle. There are more than 50 such schemes across the world, so Scotland might be following behind many other countries but we are well ahead of the rest of the UK. It is because we are ahead that we have been seeking an exemption from the United Kingdom Internal Market Act 2020—an act that the UK Government imposed on the devolved nations after Brexit.

I had expected to be here today to let Parliament know that the UK Government had done the right thing and granted a full exemption from the 2020 act for Scotland’s scheme. That is because waste and recycling are fully devolved policy matters and the Scottish Parliament legislated for the scheme in May 2020.

The environmental and economic benefits of Scotland’s scheme have never been in question. It will reduce littering by a third and will increase recycling rates of single-use drinks containers by towards 90 per cent. Glass accounts for a large proportion of such containers and is one of the most common items to pollute our beaches. That is why our scheme has included glass from the beginning; it is also why almost all schemes around the world include it. Our scheme includes glass because that is best for the climate and for the environment and because it best provides a level playing field across businesses. Rishi Sunak and Alister Jack know that, too. They were elected on a manifesto commitment to introduce a deposit return scheme with glass. That commitment set the context in which Scotland’s own deposit return scheme was designed—it was a commitment to all UK schemes including glass. In 2020—when the 2020 act did not even exist—the Scottish Parliament therefore agreed regulations for a deposit return scheme that included glass.

The UK Government has since U-turned on its commitment to glass, despite its own evidence showing how important that is environmentally, economically and financially. Its 11th-hour reversal has four impacts on Scotland’s DRS. First, the scheme as it was designed, with glass, would reduce carbon emissions by 4 million tonnes over 25 years—the equivalent of taking 83,000 cars off the roads. The UK Government’s intervention means slashing that figure by a third—by more than 1 million tonnes—at a time when the United Nations has warned that all actions possible are needed to tackle the climate crisis.

Secondly, the removal of glass from our scheme makes no sense economically. The UK Government’s own 2021 impact assessment of deposit return schemes across the UK showed that the social benefits of reduced litter, emissions saved and improvements to the economy are increased by 64 per cent when glass is included, taking the value from £3.6 billion to?£5.9 billion.

Thirdly, forcing Scotland to remove glass at the 11th hour risks critically undermining the commercial viability of Scotland’s DRS. [Interruption.] Glass will make up between a quarter and a third of volumes recycled. Removing it now will severely reduce the scheme’s income, while the glass-related costs are largely sunk.

Fourthly, removing glass risks significant knock-on effects: changing fees on plastic and cans to cover the sunk costs of glass; changing business models between can-based products and those based on glass bottles, particularly for businesses in Scotland that are mainly can based; and risking production switches into more carbon-intensive glass.

As recently as January this year, the UK Government continued to say that it was up to each devolved nation, including Scotland and Wales, to decide which materials were in each scheme. It has now U-turned on that, too. Two U-turns in a row does not put the UK Government back on track; it puts it at odds with the evidence, with global best practice and with its own promises.

That is just the latest example of how devolution is, quite frankly, under sustained attack. [Interruption.] When we pass laws to make lives a bit easier for trans people, the Scottish secretary steps in and blocks the legislation. [Interruption.] When Scottish ministers engage with other nations to share ideas—

Minister, I ask you to resume your seat.

I know very well how emotive this subject gets, but at the start of this item of business I said that there were to be no interruptions or interventions. What started as low-level rumbling from Tory members has now escalated to the point of being an intervention or an interruption. I ask them to desist from doing so. They will have an opportunity to ask questions shortly.

Minister, please resume your statement.

When we pass laws to make life a bit easier for trans people, the Scottish secretary steps in and blocks the legislation. When Scottish ministers engage with other nations to share ideas and to promote Scotland as a place to visit and study in and in which to invest, the UK foreign secretary issues a diktat to overseas embassies to silence and sideline them.

Now it is clear that we cannot even introduce a recycling scheme without it being sabotaged by bad faith actors in the UK Government who never supported devolution in the first place. The Scottish secretary, whose job is supposed to be ensuring that devolution runs smoothly, seems more interested in torpedoing Scotland’s Parliament than he is in protecting Scotland’s environment. [Applause.]

Excuse me, minister. Interruptions can come in many forms. I ask the chamber as a whole to respect the fact that there should be no interventions or interruptions. Please resume, minister.

The UK Government has told the Scottish Parliament that it cannot deliver the scheme that the Parliament voted for—we can only echo a more limited scheme for England that the UK Parliament has not even voted for yet. The UK scheme currently has no agreed legislation, no scheme administrator, no contracts, no credible timescale and no glass. Yet, we are expected to agree right now to a maximum cap on deposit levels across the UK before the Scottish scheme launches, a shared registration process and one marking or barcode across the UK—none of which currently exists.

The aim of having schemes in the UK that work alongside each other and act as seamlessly as possible is entirely right, but that is not what the UK Government is doing. Its approach has nothing to do with co-operation or partnership; rather, it is “our way or the highway.”

In Scotland, we can have a DRS that will be ready to launch next March. Scotland will finally be moving on with DRS in the UK and not just talking about it. Yet, the UK Government wants to sabotage the one scheme in the UK that will be ready to go, in favour of a UK scheme that is nothing more than a plan on a page.

The UK Government aims to appoint its scheme administrator in summer 2024 and launch its scheme barely a year later, in autumn 2025. That is not credible. In reality, it looks like the UK Government is kicking the can down the road.

My challenge to the UK Government today is this: to demonstrate how and when it will put in place a UK scheme with which Scotland can align. The UK Government must show us a credible pathway, including the regulations, the scheme administrator, secure funding, the staff recruitment, the system development, the procurement of delivery contracts and the partnership work with producers and retailers. In other words, it must show us all the things that we have been working hard to put in place in Scotland—things that will give businesses, producers, retailers and stakeholders the certainty that they need.

So, where does that leave us? If the UK Government had given us the full exclusion that we had sought, I would be here, today, setting out all the detailed steps that we would be taking ahead of the go-live date next March. Instead, we are now being forced to examine whether the deliberate sabotage by the UK Government leaves us something that we can make work. We will need some time to go through the detail of the UK Government’s decision and conditions, and I will update Parliament on next steps.

There is still a win-win opportunity for the UK Government if it immediately reverses its 11th-hour decision and enables Scotland to pave the way for the all-in DRS scheme, including glass, that its own analysis concluded was the best option. That is what it should do.

The introduction of the scheme is about protecting our Scottish environment, but it is also about more than that—it is about protecting our Scottish democracy. We are here as the consequence of a Brexit that Scotland did not vote for. Every day, people are paying the price of reduced living standards, a weaker economy and less money for public services like the national health service. This is not just about broken glass; it is about a broken union—a union of supposed equals exposed as being anything but that by a Tory Government pursuing a scorched-earth approach to devolution.

Scotland deserves so much more than the broken pieces of devolution. We deserve to always get the Governments that we vote for and the policies that we need. We should not have to put up with Westminster interfering with our Parliament and sabotaging important policies to suit its own agenda.

I look forward to a different future in which we have all the powers that we need—right here, in this Parliament—to deliver for the people of Scotland, protect the environment and build a stronger, fairer economy.

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 to the next item of business. Members who wish to ask a question should press their request-to-speak button now.

The statement should have been delivered by the Minister for Independence, because it is designed solely to pick a fight with the UK Government—anything to distract from the mess that the minister has made of deposit return. The scheme is on its third delay, retailers have taken legal action and producer registration was such a shambles that the minister could not bring herself to admit how many did not sign up for the scheme.

I want the scheme to work, which is why I voted for it, and why I called a debate on it when the minister would not. [Interruption.]

Mr Golden, resume your seat. The same applies to those asking questions as to the minister in delivering the statement. Can we please listen to the questioner and to the response thereafter? Mr Golden, please resume; I will give you the time back.

Thanks for that.

That is also why I have offered solutions to the minister in public and in private. The minister has come to Parliament today not to update us on deposit return but to indulge in an anti-UK rant. She would rather pick a fight with the UK Government than support a scheme that works for everyone. She has traded her environmentalism for nationalism.

The minister said in her statement that the scheme can launch next March, but she assured us that it would launch in August while secretly planning a delay. Will the minister be straight with business for once? Will the deposit return scheme launch on 1 March 2024—yes or no?

The member knows—I know that the member is being a bit disingenuous—that the relevant power sits with the UK Government because of the internal market act, which was not consented to by this Parliament, and in that case it is out of my hands. It is with the UK Government. We have done everything that we can possibly do. We have done all the work that the UK Government now needs to do. We have a scheme administrator, the investment and the funding, and the regulations were passed by this Parliament in 2020—we are ready to go.

The UK Government has done none of that work and, moreover, it is using the internal market act to block the work that we have done and the investment that has been made by Scottish businesses, and that is a tragedy. 

The minister has chosen to make this statement about the constitution and is using it as an excuse to divert attention from the utter mismanagement and uncertainty that her scheme has caused. She has already delayed the scheme to address the fact that she had not listened to businesses at all, and she threatened to cancel it two weeks ago.

Stakeholders have told me that, despite repeated requests, they have been unable to meet the minister or her officials when they have had solutions to offer. Will the minister now tell me, in answer to the question that I asked her last week, whether she examined options that would have prevented the need for an internal market act exemption altogether? That is a missed opportunity, because repeated requests to meet have been turned down by the minister and her officials. Will the minister now tell us, in the light of her statement, exactly how much has been spent on the scheme and whether the deposit costs for cans and plastics will have to go up?

There were several questions in there, which I will attempt to answer for the member.

On the internal market act, of course we considered all the options. We know and have known ever since the internal market act was put in place that we needed an exemption. That is fully understood and it is why we started that process back in 2021, nearly two years ago.

I meet businesses regularly. I met producers and retail and hospitality representatives this morning. I continually meet businesses, and I have listened very carefully to them.

Sarah Boyack will know that, over the past year, I have come to the chamber multiple times to talk about the adjustments that we have made to the scheme to help businesses, on things such as support for small businesses and producers, and clarity for return point operators. That is evidence of my working carefully with businesses and listening to them. I met businesses this morning at the first possible opportunity after getting the letter late on Friday night to have a conversation about how we will now move forward with the scheme.

I am sorry: there were too many points in Sarah Boyack’s question, and I did not manage to write down the last three.

It is clear that there is a huge amount of interest in asking questions. We will get through all of them or a lot of them if the questions and responses are as brief as possible and we do not get interventions from a sedentary position.

The Constitution, Europe, External Affairs and Culture Committee report on the United Kingdom Internal Market Act 2020 noted that common frameworks agreed with the UK Government could

“resolve the tensions within the devolved settlement through managing regulatory divergence on a consensual basis”.

What is the impact on the workings of common frameworks if the UK Secretary of State for Scotland unilaterally overrules the will of the Scottish Parliament on implementing a deposit return scheme that is completely within its competence? Does she believe that his actions represent a consensual approach to post-Brexit devolution settlements?

Clare Adamson is quite right to highlight issues around the common frameworks. The UK Government’s decision is extremely concerning for the future of the Scottish Parliament’s ability to legislate effectively in wholly devolved policy areas. It also undermines the common frameworks process for exclusions, which the UK Government agreed with the devolved Governments.

The problem at the heart of the issue is the UK Government’s hugely damaging internal market act, which it imposed on the Scottish Parliament without its consent. The Scottish Parliament approved the Deposit and Return Scheme for Scotland Regulations 2020 before the internal market act was imposed on the Scottish Parliament without its consent.

Last week, I flagged that the minister’s deposit return scheme has cost the taxpayer around £220,000 so far. I asked her how much the Scottish Government had budgeted for, but she did not know. Can she tell us now?

Liam Kerr will know that I offered to write to him with that information. He will have that imminently if he does not have it already.

Scotland’s deposit return scheme, as passed by the Scottish Parliament, is an industry-funded and industry-led scheme. It is funded by the producers of the materials as a producer-pays scheme. The fundamentals are there. It is an industry-led and industry-funded scheme, not a publicly funded scheme.

Can the minister confirm that, ultimately, what we are seeing, as the Scottish Government and many others feared, is the UK Government taking effective control over devolved policy making from the democratically elected Scottish Parliament? Is she concerned about the precedents that that might set?

Indeed. Jackie Dunbar is quite right that the decision is a sincere threat to devolution that even our Labour colleagues should be very concerned about. Anyone who believes in devolution needs to stand up for the Scottish Parliament’s ability to make regulations and legislation in devolved areas. The UK Government’s ability now to block Scottish Parliament legislation on a whim very late in the day, even when Scottish businesses have invested an estimated £300 million in getting the scheme going and have recruited people to do the jobs, is a shocking state of affairs. That cannot continue. The UK Government needs to recognise the common frameworks, work to our agreed processes, and not govern on a whim.

I thank the minister for the advance sight of her statement.

The minister will be aware that, on 20 January this year, the Department for Environment, Food and Rural Affairs announced that Wales’s deposit return scheme would include glass bottles and make use of existing kerbside collection. Can she confirm when she last met her counterparts in the Labour Government in Wales, what discussions she has had with them on Wales’s plans for glass deposit returns and what our nations’ Governments can learn from each other as we seek to develop deposit return schemes to improve recycling rates across the whole country?

We applaud the ambition to include glass in the scheme in Wales, which aligns with the ambition of the Scottish Parliament and the Scottish Government to include glass in our scheme. The development of the Welsh scheme is in a substantially different place, as regulations have not yet been made through the Welsh Parliament, whereas we made ours back in 2020. I think that Wales is likely to come up against exactly the same problem as we have in relation to the internal market act.

To answer the member’s question fully, I last spoke with Welsh colleagues on Monday at the regular monthly meeting of the interministerial group for environment, food and rural affairs, which covered deposit return schemes, and our Welsh colleagues were extremely supportive of the Scottish Government’s position. They are very supportive of the devolution argument—that the devolved nations should be able to make legislation on devolved matters—so we are in lockstep with the Welsh Government on the matter.

I emphasise that I fully support including glass recycling in the DRS and that I deplore interference by the UK Government in a fully devolved issue. My concern has always been about the practicalities of glass recycling. Will the minister confirm that Circularity Scotland will have those issues resolved and that glass recycling will be in place in many businesses by the launch next year?

To be clear about what has happened, the UK Government has told us that we cannot include glass in our scheme. That is a major change to our scheme’s scope and business case. As of this morning, we have started engaging with businesses to understand what that means for them, given that the investment has largely been made in the vehicles to transport glass and the reverse vending machines to accept glass. The processes and systems to handle glass have already largely been invested in and are in place. We have to go back and look at what the decision means and whether it leaves us with a viable system.

This is proof, if any were needed, that the Scottish and UK Governments would pick a fight in an empty room. They are at it, and businesses are caught in the middle and being messed about.

The Scottish Government had made a pig’s ear of a good idea long before it tried to use a constitutional row to muddy the waters about its own inadequacy. Retailers and producers could have worked with a competent scheme that did not throw up barriers, but that is not what they had in front of them. Is part of the problem the fact that we have two Governments that are incapable of owning up to mistakes and for which co-operation is a dirty word, even if that is what hard-pressed businesses are crying out for?

I am a bit shocked by the member’s question, because the Lib Dems used to be staunch defenders of devolution but now seem to be undermining hundreds of millions of pounds of investment that Scottish businesses have made in the scheme. Hundreds of Scottish businesses have signed up to the producer register so that they can contribute to the scheme, and members will have seen reverse vending machines starting to appear in local grocery stores. Businesses all over Scotland have got ready for the scheme.

We are ready to go—Scotland’s scheme is ready to launch in March. This is a spanner that the UK Government has thrown into the works at the last minute. As recently as January, the UK Government said in writing that it was up to the devolved nations to determine the scope of such schemes. The UK Government has changed its mind at the last possible minute and at the worst possible time, when investment has already been made.

Given that the UK Government has failed to adhere to the agreed rules for seeking an exemption from the IMA, although the Scottish Government followed those rules every step of the way, is the minister as concerned as I am about the unilateral changing of the rules for exemptions in relation to the future of devolved policy making?

The UK Government’s decision is extremely concerning for the future of the Parliament’s ability to legislate effectively in devolved areas and it undermines the common frameworks. As I said, the problem that is at the heart of the issue is the internal market act, which was imposed on the Parliament without its consent. We made our regulations back in 2020, before the act was imposed on us. The regulations fall wholly within devolved competence—the UK Government agrees about that.

I will quote from the document that I referred to earlier. In January, the UK Government said:

“Since waste management is a devolved policy area, it is the responsibility of each nation of the UK to decide the scope of its own DRS in a way that fits its policy needs.”

The UK Government has U-turned on that position at the last possible minute, which is creating more uncertainty for Scottish businesses. That is exactly not what we need.

The minister tells us that the scheme is industry led, but industry bodies such as the Scottish Wholesale Association have welcomed the UK Government’s intervention. Why is the minister attacking business?

I have met the Scottish Wholesale Association and many other industry players. There are, of course, a range of views from industry, but the main view is that we need certainty and a clear decision. I expected to be able to stand here today and say that the UK Government had done the right thing and granted a full exemption in line with its policy, as stated in that document from January, and that it is up to devolved nations to determine the scope of their deposit return schemes.

Many businesses in Scotland have already invested in glass. They have put in place reverse vending machines with glass, they have bought vehicles for transporting glass and they have invested in storage to store glass safely. This is me listening to Scottish businesses. They have made that investment, and now the UK Government has made a change at the last minute, which means that we now have to question how we will carry forward that investment. That is not helping UK businesses.

I welcome the news that the minister is working closely with her counterparts in the Welsh Government. It is clear that Labour in Wales will face the same sabotage that we now face when it comes to lay its DRS regulations that include glass. Therefore, how should devolved Governments now work together to challenge the UK Government’s decision and defend devolution, given that it appears that common frameworks are effectively broken in these islands?

Mark Ruskell is of course entirely right to highlight the choice that Labour has to make. Back in the days of Donald Dewar and John Smith, Labour championed devolution as an opportunity to address a democratic void in Scotland and to ensure that Scotland could strike out on its own path if the Scottish Parliament, elected by the people of Scotland, so chose. That is why Labour, in those early years, took a distinctive path on homelessness reform, for example, and led the way in the UK on the smoking ban. Since then, this Parliament has continued to choose a distinctive path for Scotland, on tuition fees, the child payment, free bus travel for under-22s, the rent cap and so on.

The challenge for parties that believe in the Scottish Parliament’s right to decide is to back that right under this latest attack. Labour in Wales might be at an earlier stage than we are on its deposit return scheme but, once it comes to drafting the regulations and the detailed design, it will very likely face the same barriers that we are now dealing with. Therefore, even if Labour in Scotland will not stand tall in facing the attack on the Scottish Parliament, it should stand in support of its colleagues in Wales.

Presiding Officer,

“If you are going to do something, do it properly—Scotland’s new deposit returns system should include glass. ... Simple. If you support DRS, the strongest case is for glass.”

Those are not my words, but those of Maurice Golden, in February 2019. Indeed, the 2019 UK Conservative manifesto pledged to

“Introduce a deposit return scheme to incentivise people to recycle plastic and glass”.

Does the minister think that the Conservatives’ approach is anything other than hypocrisy and politicking of the very worst possible kind?

Indeed, the situation must put Conservative members in a difficult position, given that Douglas Ross stood for the Westminster Parliament on a manifesto commitment to have a deposit return scheme with glass. Of course, Maurice Golden has stated his support for glass and made arguments for the inclusion of glass. I really could not have stated those arguments better myself—he makes an excellent case for why we should have glass in the scheme.

Of the 51 territories and countries that operate deposit return schemes, 45 include glass. The UK Government’s own analysis of deposit return schemes across the UK shows that the social benefits of reduced litter, the emissions saved and the benefits to the economy are increased by 64 per cent when glass is included. Glass is one of the most common items that pollutes our streets and beaches. By not including it, glass bottles will unnecessarily end up as broken glass in our streets and parks and on our beaches.

Presumably the point of the United Kingdom Internal Market Act 2020 is to identify what effect any regulatory divergence would have on the trade and flow of goods and products across the border. In that vein, is the minister willing to publish the Scottish Government’s analysis of what effect its DRS would have on Scottish drinks producers?

As the member will know, we have published all of our impact assessments, which include impacts on trade and on consumer choice. We can direct the member to where those have been published online, so that he can read them. The whole purpose of devolution is to allow regulatory divergence, so that we can do things differently in Scotland that are correct for us.

As I said, until January this year, the UK Government had supported the idea and said in writing that it is up to devolved nations to decide the scope of their schemes. It is not unusual for there to exist different deposit return schemes within an internal market. For example, within the European Union, some nations and regions have deposit return and some do not, although all of them are committed to doing it before 2029.

My constituents who live near the border and routinely buy—or, if it is a business, sell—on both sides of that border, often on the same day, are not interested in the constitutional bickering that we have had today.

Mark Drakeford is.

The lack of clarity—[Interruption.]

Mr Gray, please could you desist from heckling from a sedentary position?

The lack of clarity over alignment is a real concern of businesses in my constituency. Perhaps the minister might want to—

Question, Mr Smyth.

If there are any further delays to the Scottish scheme, and the 2025 date for the Welsh and English schemes looms ever closer, at what point does the minister conclude that bringing the schemes in at the same time makes sense when it comes to that alignment, as the Welsh Government has concluded?

The 2025 date for the UK schemes would mean that they would pass their regulations and get in place a scheme administrator, the funding, the contracts and the infrastructure in less than two years. It is not credible that they will launch those schemes by 2025. We are all in agreement that the best scheme would involve alignment of all of the UK. That is why, when this Parliament passed the regulations in 2020, it was with the understanding that all nations in the UK would include glass, because that is what was in the Tory manifesto in 2019. It is a betrayal of Tory voters to take this U-turn on that position.

Given that Scotland’s businesses have lost confidence in the scheme because of the minister’s shambolic handling of it, what confidence, if any, can they have that Lorna Slater can sort out this mess of her own making?

The question that the member asks is not particularly substantive. [Interruption.]. I am here in Parliament today because of a letter that was issued at 9.45 at night on a Friday, after the information that was in it was leaked to the press 12 hours earlier. [Interruption.]

Mr Halcro Johnston, you have asked the question; listen to the response.

That is a disrespectful way to treat this Parliament, meaning that instead of my being here to lay out before Parliament how we are going to move toward our launch on 1 March, I am instead here telling members how the UK Government has, at the last minute, put a spanner in the works to sabotage our scheme and that we now have to work out a way forward for Scottish businesses that have invested in good faith according to the regulations passed by this Parliament. The UK Government has called into question and undermined that investment and those jobs.

In the past couple of days, the minister has warned—indeed, threatened—that if the Scottish DRS fails and does not go ahead, that would result in littering in Scotland of 600 million bottles. The population of this country is 5.5 million. That would require every person—every man, women and child—to litter 109 bottles on our streets, beaches and parks a year. That obviously does not happen, so will the minister withdraw that false and disingenuous claim and instead work with the British Glass federation in order to build on the excellent recovery rates and recycling rates for glass at the current time?

The number that the member quotes—600 million glass bottles—is the estimate of the number of glass bottles that are in use in Scotland and therefore included in the deposit return scheme. They would be in scope of the DRS and would be prevented from being littered by being included in that scheme. Given that the UK’s late-stage intervention has removed glass from the scheme, that does not give us the scope to work with businesses on glass. It has been removed, against the will of this Parliament and against all of the evidence that the UK Government has for why including glass is a good idea.

How many of the 600 million bottles to which Fergus Ewing just referred are already being recycled?

Glass recycling rates in Scotland are stuck at a level of about 63 per cent. Equally, we know that kerbside recycling does not lead to high-quality glass recyclate because of the high level of contamination and the lossiness of kerb-level recycling. Because glass is multihandled, it breaks and turns into powder. A deposit return scheme means a higher quality of recyclate and higher levels of recycling—up towards 90 per cent. Because the recyclate is of such good quality, it can be recycled into higher-value products—back into glass bottles—instead of, as with kerbside recycling, being recycled into lower-quality products, such as aggregate for roadfill.

That concludes the statement. There will be a brief pause while we move on to the next item of business to allow the front benches to change over.