Deposit return scheme Scotland: Ministers warned to brace for flood of compensation claims

The Scottish Licensed Trade Association said Lorna Slater had ‘effectively torpedoed’ the scheme

Scottish ministers have been warned to brace themselves for a flood of compensation claims if the controversial deposit return scheme (DRS) is axed.

The Scottish Licensed Trade Association (SLTA) said Lorna Slater, the Green minister, had “effectively torpedoed” the scheme after she suggested it could be scrapped by the end of the month if the UK Government does not give it the go-ahead.

Ms Slater said the Scottish Government would have to make a “pro-active decision” as to whether the scheme was “viable”.

Lorna Slater. Picture: PA

The DRS has already been delayed until March next year amid concerns from businesses about its implementation. It will see shoppers north of the border charged a 20p deposit every time they buy a drink in a can or a glass or plastic bottle, with that money given back to them when the empty containers are returned for recycling.

Ms Slater is pushing for the UK Government to agree to an exemption from the Internal Market Act (IMA) – which regulates trade in the different parts of the UK following Brexit – "by the end of May at the latest", insisting this is "essential to the successful delivery of the scheme”. However, UK ministers have said they are yet to assess the impact of this request. The exemption is needed as the scheme in Scotland is due to begin ahead of similar initiatives in England, Wales and Northern Ireland.

Colin Wilkinson, SLTA managing director, said: “This gets more farcical by the day. In my view, the Internal Market Act issue is like building a 20-storey tower block then applying for retrospective planning permission. Who would be so presumptuous?

“Lorna Slater has effectively torpedoed the scheme. Businesses have already pulled resources from preparing for the scheme and it is unlikely they’ll revisit it now until the IMA situation is resolved – if it ever is – before the end of the month.

Falkirk Council is having to rethink its plans for kerbside glass uplift after Scotland's Deposit Return Scheme is delayed

“SLTA believes that supermarkets may be looking at removing drinks sales from home deliveries so they don’t then need to comply with takeback regulations. You can understand why – but what happens to people who rely on home deliveries? It’s another potential nail in the coffin for the farce that is DRS.

“Earlier this month, we said that while we welcome the fact the scheme’s implementation has been paused until March 2024, it is imperative that this should be used as a window of opportunity to revisit DRS and make it both workable and practicable for both businesses and consumers. If the scheme is cancelled and millions of pounds wasted, the Scottish Government will have to brace itself for the compensation claims that will inevitably start pouring in.”

It is understood some retailers are already looking at potential claims on the back of the recent delay.

Colin Smith, chief executive of the Scottish Wholesale Association, said businesses, jobs and investment were at risk if the UK Government “doesn’t make the right decision”. He told The Scotsman: “We need the politics to stop and to see some pragmatic common sense from both governments so we can move forward.”

Some businesses are calling for a delay but campaigners want to see DRS introduced.

Blair Bowman, a whisky expert who has been a high-profile critic of the DRS, said: “I would not be surprised if the biggest businesses, who have spent investment on reverse vending machines etc, would be wanting to get some sort of money back.”

Chris Payne, the director of Glasgow-based Shoogle Spirits, said firms were being left in limbo. He said: “It’s just bad legislation, incredibly badly executed, and that’s the reason why it’s been delayed.”

Conservative MSP Maurice Golden dismissed Ms Slater’s claims as a “red herring”, saying if the scheme failed it would be the Scottish Government’s fault. He insisted the financial viability of the scheme “is not encroached upon by an exemption from the Internal Market Act”, as he accused Ms Slater and the Scottish Government of “attempting to stoke constitutional grievance” with Westminster.

It came as Rishi Sunak was urged to directly intervene to ensure the DRS could come into force next year. Groups such as Greenpeace UK, Keep Britain Tidy and the Marine Conservation Society signed an open letter to the Prime Minister, demanding the UK Government grants an exemption under the Internal Market Act.

The letter, which has also been signed by the Association for the Protection of Rural Scotland, Friends of the Earth Scotland, WWF Scotland, Keep Scotland Beautiful, Keep Northern Ireland Beautiful and Keep Wales Tidy, also urges the Prime Minister to include glass bottles in the DRS schemes planned for England and Northern Ireland.

The charities said DRS is “the single most effective policy tool available to reduce litter in our towns and countryside”.

They told Mr Sunak that businesses in Scotland had “already invested hundreds of millions of pounds” ahead of the scheme being brought in, and they “would be substantially out of pocket if the launch date was changed again”.

Ms Slater, the circular economy minister, said: "We have engaged with the UK Government in good faith on the exclusion for Scotland’s deposit return scheme for nearly two years now. The UK Government needs to do the right thing and agree an exclusion now to give businesses the certainty needed to prepare for the launch of the scheme in March.

“We are grateful to all businesses for the investment they have made in preparing for Scotland’s deposit return scheme. This investment will be important for the success of the scheme. The UK Government will be responsible for their decision, and any implications it will have for all those businesses that would lose significant investment.”

A UK Government spokesperson said it received a formal request for an exclusion on March 6. It added: “The Scottish Government has since been reviewing and paused the scheme until March 2024 to allow it more time to address concerns raised by businesses. It therefore hasn’t been possible yet for us to fully assess the impacts of the exclusion request on cross-UK trade, firms and consumers.”