1. To ask the Scottish Government whether it will compensate businesses if it decides not to proceed with the deposit return scheme. (S6T-01392)

We are committed to our deposit return scheme, which is critical to reducing the amount of litter, tackling emissions and increasing recycling. I am grateful to all businesses for the investment that they have made in preparing for the DRS.

The missing piece of the jigsaw is the United Kingdom Government agreeing an exclusion from the United Kingdom Internal Market Act 2020. We have been discussing an exclusion with the UK Government for almost two years, fully following the agreed process. The UK Government needs to do the right thing and agree an exclusion now, to give businesses the certainty that they need to prepare for the launch of the DRS in March and to allow the investment that has been made by businesses to be put to good use.

Yesterday, during the Scottish Affairs Committee meeting, the Secretary of State for Scotland announced that the UK Government was still missing elements of the application for an exemption to UK trade rules.

The fault for this disastrous scheme lies firmly at the door of the minister’s office. The shambolic roll-out of the policy has damaged the relationship with and confidence among Scottish businesses. I remind members that thousands of businesses have not even signed up to the Scottish National Party-Green deposit return scheme, because they think that it will be too damaging for their business. The Scottish Retail Consortium has said that one of Lorna Slater’s recently proposed changes to the scheme makes it even less likely that the scheme will go ahead in March 2024, and the Scottish Licensed Trade Association has explicitly said:

“Lorna Slater has effectively torpedoed the scheme”.

Why does the minister think that Scottish businesses are wrong?

I will address the point that Meghan Gallacher raised early in her question: it is simply not true that the information that is required under the common framework has not been shared. Provision of the impact assessments of the kind that Mr Jack has demanded is not part of the common framework process. It is not true that such assessments have not been carried out; we have conducted a full set of impact assessments at the appropriate point in the delivery of the scheme. The business regulatory impact assessment, which is known as a BRIA, equality impact assessment, islands impact assessment and strategic environmental assessment are all publicly available. In the BRIA, we have covered all the impact assessments that Alister Jack has claimed have not been conducted. I direct you and him—

Through the chair, please.

I am sorry. I direct Meghan Gallacher and Mr Jack to the following pages. The competition assessment begins on page 35 of the BRIA, and the impact assessment on consumer choice begins on page 58. We have supplied all the required information, and more, to agree an exclusion from the internal market act.

Furthermore, the Secretary of State for Levelling Up, Housing and Communities—that is, Michael Gove—wrote to the Deputy First Minister today, thanking the Scottish Government for our updated analysis of the impact of the Scottish deposit return scheme and confirming that his Government is currently processing and reviewing that information. In that letter, Mr Gove has not indicated—

The Presiding Officer:

Briefly, please.

—that there is any further or outstanding information that the UK Government requires to enable it to make a decision on the internal market act exclusion.

To answer Meghan Gallacher’s question, the reason why I can give Scottish businesses confidence is that there is no reason for an internal market act exclusion not to be granted. We have provided all the information, and Mr Gove and his colleagues are now considering it.

Once again, the minister is abdicating responsibility and trying to pin the blame on the UK Government. The deposit return scheme is a long-standing Scottish Government project that it has been responsible for and talked about for years. It is not anybody else’s problem, and everyone but Lorna Slater agrees.

It is time for the minister to put her money where her mouth is. If the minister who is responsible for paying compensation to Scottish businesses is so confident about the scheme and the commitments that she has made today, will she commit to publishing the Scottish Government’s legal advice on who is liable to pay?

As I have answered previously, I am committed to delivering Scotland’s deposit return scheme on 1 March, and we are working closely with industry on all the pieces of that. The one piece left that we need is the internal market act exclusion and, as we have seen in today’s letter from Mr Gove, we have provided all the information that is necessary for that to be granted, which is currently being considered by the UK Government.

Creating the DRS is a democratic decision that was made by this Parliament. The Tory Government at Westminster has torn up the common frameworks that were intended to protect devolution and regulatory divergence. The common frameworks were developed in conjunction with the devolved legislatures of the UK, and they permit regulatory divergence. They include a dispute resolution section that, to the best of my knowledge, has not been initiated for the DRS.

Does the minister agree that anti-democratic posturing is putting the DRS scheme, regulatory divergence and the future of devolution at risk, all for an internal market act that, I remind members, the Scottish Parliament rejected but was ignored by Westminster?

I absolutely agree with the member. There is a climate crisis that requires urgent action, and the deposit return scheme is a practical way of tackling that. Our deposit return scheme will help us to achieve our net zero ambitions as well as tackling litter and increasing recycling. I know that the UK Government shares all those aims.

There is also strong public support for Scotland’s deposit return scheme. Polling that was carried out in February showed that 70 per cent of Scots support deposit return. It is therefore astonishing that the Secretary of State for Scotland is actively working to undermine those aims and the way that devolution works. The United Kingdom Government, in the shape of the Department for Environment, Food and Rural Affairs, can choose to ignore that conduct and grant the exemption now, which would be in the interests of Scotland and the UK.

It is unacceptable that our businesses are now facing massive uncertainty because of the Scottish Government. We urgently need a ministerial statement on this matter, because our constituents, businesses and producers need—[

Interruption

.]

The Presiding Officer:

Members!

—more than the answers that they will get now. The issue of compensation—

The Presiding Officer:

Ms Boyack, will you sit down please? I cannot hear you because members are shouting. You cannot listen when you are shouting, and I am sure that we would all agree that each and every member should be heard.

I appreciate that, Presiding Officer. The issue of compensation has arisen because of the predictable blame game that is taking place on an internal market act exemption. Will the minister confirm what steps she and her officials have taken to look at all options? Have she and her officials exhausted every possible solution that would avoid the need for an exemption and mean the launch of a successful and workable deposit return scheme—y es or no?

Of course, we know that we need an IMA exclusion to launch the scheme. We have known that all along, which is why we have engaged in good faith with the UK Government on that exclusion for almost two years now. We first raised the need for an exclusion in July 2021, and we have followed the process that was agreed between the UK Government and the devolved Governments. We have published a summary of our correspondence and engagement with the UK Government, which it does not dispute. We submitted a final, detailed paper on the exclusions proposal in relation to the resources and waste common framework on 13 February this year. It was the culmination of continuous engagement at official and ministerial levels to exclude the DRS from the IMA.

We cannot go on indefinitely; we need an answer on that. However, as we have seen in today’s letter from Mr Gove, the UK Government now has all the information that it needs and it is actively considering the exemption. Once it has made a decision, and it knows that the decision has to be made by the end of this month, we will proceed with delivering the deposit return scheme.

The minister must acknowledge that this scheme has been in trouble for quite a long time and certainly since well before this recent episode. Confidence in those who are expected to deliver the scheme is at rock bottom. Rather than stringing it along for yet more weeks and months, why does the minister not acknowledge that she needs to go back to the drawing board, come up with a new scheme and work with the UK Government to develop something that works?

I am rather shocked by the member suggesting that. The regulations for a deposit return scheme were passed by the Parliament in 2020. They were extensively consulted on and they went through the committee process and all the other stages of the Scottish Parliament. The deposit return scheme that is being delivered is in line with the work that was done at that time. It is absolutely my intention to deliver what the Parliament voted for, and that is what we are actively engaged with the industry on.

I do not agree with the member’s characterisation. I met industry stakeholders yesterday with the high-level ministerial strategic group for the delivery of the scheme. We are now looking at working through the operational details with the industry, sector by sector, so that we can have that delivery. I am supporting the facilitation of the intersectoral group so that, if issues come up that cannot be separated out sector by sector—by hospitality, retail or producers—t hey can be escalated and resolved in the shortest possible time. I have every confidence that the industry will be able to deliver this scheme, and that is what we are working on. I do not recognise the member‘s characterisation of this at all.

Industry has invested hundreds of millions of pounds in the scheme. People have been recruited, information technology systems are under way, reverse vending machines are being installed, sorting centres are being set up, vehicles and logistics are being provided. We are all systems go and just need that last little piece, which is the internal market act exemption.

The Presiding Officer:

Please be brief, minister.

We will carry on with the launch.

I remind the minister that there was 100 per cent support from members in this chamber for a DRS—just not for this shambles. Business has said the same.

I ask the minister why she is threatening to drop the scheme 10 months before the start date. Why not 10 months before the last date or 10 months before the date before that, or before the date before that? The reality is, you only put up an official request—

The Presiding Officer:

Please speak through the chair.

—for an exclusion from the internal market act on 6 March 2023. The public does not understand that; business does not understand it; the minister does not understand it. Is it not time to go back to the drawing board?

The member is absolutely incorrect on that point. The process of making a formal request that Alister Jack has described is not how the process for making decisions between Governments works. Those decisions are based on the common framework, which is an agreed and published process. Alister Jack cannot just make up bits of the process for the purpose of saying that I did not comply with them.

On the issue of the exclusion, we have agreed in good faith with the UK Government at every step. [

Interruption

.]

The Presiding Officer:

Members!

We have published the correspondence and engagement that we have had with the UK Government. We first raised the need for the exclusion in July 2021, so this has been going on for almost two years. The UK Government must not delay any further; it must give us the confidence that we need to go forward.

As I said, the letter that we received today from Michael Gove shows that he has received all the information that he needs and that the decision is currently being considered by the UK Government. I really welcome that and look forward to a positive decision on the exclusion in the near future.

The last gateway review was completed two months ago, in March. Why has that not been made public? When will it be made public?

Irrespective of who is responsible for compensation, will the minister simply confirm that businesses, producers and retailers have incurred costs—as required by law—and that therefore, if the scheme fails, they must get compensation? Does the minister accept that that principle is unchallengeable?

I believe that there were two questions there. On the second, the question of compensation is a thoroughly hypothetical one at the moment. I am working towards getting the scheme launched and ensuring that it is a success. That is what we are putting in place as we work towards the 1 March launch.

The second question was about the gateway review. The member is correct: the most recent gateway review took place in March. The Scottish Government is fully and carefully considering the review’s recommendations and will share those, along with the response to that review, with the Net Zero, Energy and Transport Committee imminently.

The Secretary of State for Scotland is actively seeking to sabotage not only the DRS, with all its benefits for litter reduction, recycling and climate emissions, but the whole basis of devolution, including the right of this Parliament, and of the Welsh Senedd, to deliver DRS schemes across the UK that include glass—[

Interruption

.]

The Presiding Officer:

Members!

Will the minister say how she has sought to correct Mr Jack’s misrepresentations and misunderstandings of the way that devolution works across these islands?

I met Mr Jack yesterday at a regular intergovernmental meeting and laid out exactly what we have done to follow the process and how we have gone above and beyond the agreed process by providing all the additional information that he and his colleagues have asked for.

I remind the member that, as he knows, the Scottish Parliament approved the regulations for Scotland’s deposit return scheme in 2020, long before the introduction of the United Kingdom Internal Market Act 2020. The regulations are wholly within devolved competence and, as the member said, include glass.

The Scottish Government has so far spent almost £220,000 on setting up the DRS. How much was budgeted for that?

I do not have that information to hand, but I will be happy to write to the member. The operational cost of running the scheme will be met by industry, and hundreds of millions of pounds-worth of private investment has already been made in that.

In recent days, we have temporarily increased the number of Scottish Government staff who are working on policy development and stakeholder engagement. That is to support the changes to the regulations, which I will bring to the Parliament shortly, and ensure that industry is prepared for the scheme. We have also had to handle an increase in freedom of information requests and increased correspondence with industry. I aim to respond to members, businesses and constituents in a timely fashion. I believe that that would be expected by Parliament, industry and the general public.

The minister is in denial. She is acting with recklessness. The question that was asked by Fergus Ewing stands unanswered, and it is very simply this: the minister has apparently publicly admitted to businesses that, by the end of this month, the DRS might be scrapped, so how much does she estimate will be due to businesses in compensation should that arise? She says that it is hypothetical, but she is duty bound as a minister to bear in mind all the considerations regarding any decision. What amount does she have in mind that would be due to businesses in compensation? It is a very simple question. We do not need a pre-written, scripted answer. Just tell us what it is.

It does not matter how many times the member asks the question—the answer is still the same. It is a hypothetical question, because the deposit return scheme is continuing. All the information that is required for the granting of an exclusion to the United Kingdom Internal Market Act 2020 was submitted to the UK Government weeks ago. Indeed, we have submitted additional information. It has everything that it needs. There is no reason for an exclusion not to be granted. I look forward to hearing about that in the next few days and carrying on with the delivery of the deposit return scheme.