By Lucy Ashton
Renewed calls have been made for compensation to be paid to firms hit by the SNP-Greens’ botched Deposit Return Scheme after it emerged Lorna Slater previously claimed they should not be out of pocket for delays that weren’t their fault.
But today First Minister Humza Yousaf said they are not on.
Commenting following Humza Yousaf’s appearance on Laura Kuenssberg this morning where he stated the Scottish Government would not give compensation to businesses over DRS, Scottish Labour Net Zero spokesperson Sarah Boyack said: “From the very start, there have been serious concerns raised about the DRS and they have always fallen on deaf ears.
“Businesses have been ignored by the SNP and the Greens, and now they are being expected to foot the bill of this incredibly expensive shambles.
“The chaos and incompetence that has characterised this scheme is becoming second nature for this government.
“During this entire interview, the independence obsessed Humza Yousaf spent more time promising a referendum than he did talking about the issues with the DRS, our NHS, or the cost of living crisis.”
“The SNP must stop blaming their own failures on devolution and focus on the real issues facing Scots now.”
Meanwhile, the Scottish Conservatives have urged ministers to “do the right thing” and reimburse businesses for the decision to delay the scheme until at least 2025, after uncovering comments made by the circular economy minister 18 months ago.
While Lorna Slater has sidestepped questions on compensation this week, in December 2021 she said: “I do not think that it is right to suggest that an additional financial penalty should be inflicted on Scotland’s small breweries, hospitality businesses and convenience stores for delays that are due to Brexit and Covid, and which are in no way the fault of those businesses”.
Scottish Conservative MSP Maurice Golden said ministers had to be consistent and pay compensation because delays caused by her “incompetence” were clearly not the fault of businesses.
He added that it would then be “hard to see how Lorna Slater could survive in post” given she has staked her reputation on the scheme.
The party are also highlighting the “negligence” of the SNP-Greens in only applying for an internal market act exemption “at the 11th hour” when they were aware three years ago that it would be required in relation to DRS.
Maurice Golden said: “Since announcing the latest delay to her botched DRS scheme, Lorna Slater has evaded questions about compensation payments to businesses which have been left hugely out of pocket due to her incompetence.
“Yet just 18 months ago, she was the one making the case that businesses should not be financially penalised as a result of delays to DRS that weren’t their fault.
“The two-year delay announced this week was not just inevitable, but a direct consequence of Lorna Slater’s incompetence and refusal to listen to business owners who repeatedly warned that her scheme was unworkable.
“She and fellow ministers must now do the right thing and reimburse companies that have shelled out a fortune on the back of her warning that the scheme would go ahead, and that they must comply with it or cease trading.
“That compensation bill will be large and, once it’s paid, it’s hard to see how Lorna Slater can survive in post, given she has staked her reputation on the scheme.
“Her desperate attempts to blame the UK Government for a shambles entirely of her making are further underlined by the fact that nationalists were aware three years ago about the need to apply for an internal market act exemption.
“So, it was sheer negligence that they only applied for one at the 11th hour in March.”
Joe Fitzpatrick confirmed that the Scottish Government has not allocated funding to cover deposit return scheme delay. Fitzpatrick said: ‘Scotland’s deposit return scheme [DRS] is an industry-led scheme, in line with the principles of producer responsibility. The investments that have been made by businesses to date will be important for the success of the scheme when it launches on 1 March 2024. Accordingly, the Scottish Government has not allocated additional funding to cover industry costs due to a delay.’ (Scottish Parliament, 3 May 2023, link)
Lorna Slater said it was not right for businesses to experience financial penalties due to delays to DRS. Slater said: ‘I do not think that it is right to suggest that an additional financial penalty should be inflicted on Scotland’s small breweries, hospitality businesses and convenience stores for delays that are due to Brexit and Covid, and which are in no way the fault of those businesses’ (Official report, 14 December 2021, link).
Lorna Slater failed to answer whether businesses in Scotland will be compensated for her DRS delay until October 2025. Asked on Good Morning Scotland whether businesses will be compensated for the delays to the Deposit Return Scheme, Slater said: ‘the UK Government has now come in and made this scheme impossible to deliver on the original timescale. So, we have committed to doing what industry asks us to do, which is to align with the UK scheme even though we don’t know what that looks like yet, and at the earliest possible date that we can do that, so I thank the businesses for their investment. We are doing our absolute best to make sure that we can make good on that investment as soon as possible.’ (Good Morning Scotland, 8 June 2023).
The UK Government explicitly mentioned in July 2020 DRS could be affected by the Internal Market Act. In the UK Government’s Internal Market Act consultation, they talk about the costs that can be created by regulatory divergence. They specifically mention the Deposit Return Scheme as an example of a policy that ‘could result in additional costs for businesses with operations across different parts of the UK’. (UK Internal Market, 16 July 2020, link).
Holyrood explicitly warned in September 2020 that DRS could only work unless an Internal Market Act exemption was agreed. The Scottish Parliament Information Centre (SPICe) said in a briefing in September 2020: ‘Because there is no DRS in the rest of the UK, producers in those areas could argue that they are entitled to sell their products in Scotland without making such alterations. This could mean that DRS would only work as a UK-wide scheme unless an exemption was agreed.’ (SPICe, 7 October 2020, link).