Chamber and committees

As I already said to the convener, it is absolutely possible to run schemes without glass. That was not why we had to halt our scheme. That happened because of the rule changes, particularly regarding labelling and the deposit level, which would have made us unable to tell Scottish businesses what the scheme would look like.

The level of deposit is core to how the scheme operates, because it is tied into the business model of how the scheme is funded. If you do not know what the deposit level is or what the labelling requirements are, you cannot operate a scheme. Had we known those things, and had the UK Government said that the only thing that it was doing was removing glass from the scheme, we would have been able to go ahead because there would still have been a case for the scheme. The case would not have been as strong or as good, but we could have made it.

I am in no way involved with the Scottish National Investment Bank, and I do not know what it will be reporting.

Circularity Scotland is in administration, and I am not familiar with what the administrators will be able to manage through that process.

The UK Government made this decision. It was its decision to undermine our scheme, and it is responsible for the impact that it has had. I and everybody at Circularity Scotland was fully committed to making the scheme work. As David McPhee has just pointed out, big businesses and big producers were also fully committed. You will have seen reverse vending machines going in in many supermarkets. We were fully set up to get operational in August this year, but when those conditions came in, even the big producers that had invested millions, and Circularity Scotland, said, “We can’t do it; these are not conditions under which we can launch the scheme.”

There are two points to make in response to that. First, I do not think that the common frameworks are working—because they allow for a lot of work to be done over years then for ministers to swoop in at the end and say yea or nay. There is a larger project, therefore, not just within my portfolio, about how the common frameworks work between the two Governments. I suspect that that will mean having to get ministerial agreement at various points in the process, so that people can have confidence as they move forward. Throwing out two years of working together by officials is not an efficient way for any of us to work. There is therefore a bigger picture about making those common frameworks work properly, because clearly, in this case, the UK Government has not done so.

Secondly, my understanding is that, because the Circular Economy (Scotland) Bill is a framework bill, there are no inherent internal market issues. I ask Ailsa Heine to come in and correct me if I have that wrong.

On whether we should take forward specific measures in the bill, you will know from your session this morning that, for example, we want to take powers to put charges on some single-use items. That in itself is not an issue; however, if, for example, we look at putting charges on single-use coffee cups, that specific piece of legislation could then have internal market act implications. It depends on exactly how that is implemented. As you heard in your discussion, there are lots of ways in which that could be implemented. There are lots of places that the money could go to when it is collected. There are lots of models, Exactly what model we chose might have more or fewer internal market act implications. Ailsa Heine may have more to say.

I understand the frustrations around a framework bill. When it comes to the circular economy, I take the example of disposable vapes, which have become an issue very quickly—only in the past couple of years. We can all see that, if we had to pass primary legislation every time that a new product becomes a challenging problem, that would tie up a lot of parliamentary time. By taking a framework power, we are able to react more dynamically to things such as emerging products and to manage those things much more quickly and efficiently. We do not know what products might be developed in the future, or the environmental impact that those might have. Having that suite of tools means that we can react and put in place measures for the products of the future that we do not yet know might exist.

As we said at the time, it is possible to operate a deposit return scheme in Scotland with cans and plastic bottles, but it seems absurd not to include glass, because the environmental and business case supports its inclusion. It would have been possible to run a scheme without glass, but it would not have been as good. However, as we said at the time, any deposit return scheme is better than none.

Glass was not the only reason why we had to halt our scheme. There were two further issues. They relate to the other conditions that were laid out in the partial and temporary exclusion to the 2020 act, which were about labelling and the deposit level. As you know, businesses require certainty to be able to deliver something this complicated. If we were not even able to say what the deposit level or the labelling requirements would be—from working with businesses, especially small businesses, on Scotland’s DRS, we know that it requires up to a year, and in some cases longer, to change labelling—they simply would not have been able to deliver a deposit return scheme. Businesses could not deliver the DRS without knowing those things, and we could not know those things because the UK Government has not made a decision on them and has not passed regulations setting out what it intends to do. That meant that we were left with no option.

However, the convener is correct that it is possible to run deposit return schemes without glass.

We have updated the business regulatory impact assessment for the regulations that the committee are looking at today. You have that in front of you. The major change caused by the scheme coming in later is that all the carbon and waste benefits that we would have had by getting the scheme up and running in August this year, as was originally intended, are being lost. There will be two more years of that pollution and waste.

My officials can give you more detail about the BRIA.

The member is absolutely right to be concerned about this point, and you can imagine that it was a great concern to me as well at the time. There was not only the investment but people’s jobs, including those of the employees of Circularity Scotland and all the people who had contributed to the work that they were doing to build IT systems and so on. All those people were affected by that decision so it was something that I took very seriously.

However, we were unable to proceed with the scheme because, when you are working on a deposit return scheme—as you will have heard in the chamber from other members—businesses need certainty. Deposit return schemes are enormous and complex, and our scheme will affect every single person in Scotland and tens of thousands of businesses. Anyone who sells, handles, purchases or in any way procures either drinks or their containers will be affected.

What businesses need is certainty. They asked for that at every single meeting with them and they asked us to tell them exactly how the scheme was going to work. With the partial and temporary exclusion, the UK Government threw a huge amount of uncertainty into the works. If I cannot even say what the deposit level will be in a deposit return scheme, I cannot go ahead.

When the First Minister and I sat down at a business round table after 26 May, when we got the letter from the UK Government laying out the temporary and partial exclusion, businesses said that they just could not deliver the scheme at all given the level of uncertainty. They said that, even with all the investment that businesses had made, they would now prefer to align with the UK.

There was no way with the conditions that were imposed on us.