Further deposit return delay blamed on Covid, Brexit and VAT row with UK Government – HeraldScotland

SCOTLANDS deposit return scheme is not set to roll out on the previously promised date next year with Greens minister Lorna Slater pointing to the impacts of the pandemic and the mismanagement of Brexit for holding up the key policy.

Ms Slater, the Scottish Governments Circular Economy Minister told MSPs that she will announce an updated timeline for the scheme "in due course", adding the policy will begin "as soon as practically possible".

Industry leaders have called for the scheme to be delayed until at least September 2023.

Ms Slater said that the businesses "were and still are badly affected by the pandemic and the mismanagement of Brexit.

The minister labelled the policy as a flagship scheme of this Government, which was intended to be rolled out in 2022.

She said: Unfortunately, as you are all keenly aware I know, 2020 was an unprecedented year, the global pandemic and Brexit had a major impact on businesses, particularly retailers and those involved in their supply chains and challenges persist today.

Unfortunately, the very businesses who will be most instrumental in making the DRS operate, including hospitality businesses, small convenience stores, and small brewers were and still are badly affected by the pandemic and the mismanagement of Brexit.

Ms Slater also warned there have also been unresolved issues including a lack of clarity from the UK Government on the VAT treatment of deposits, which she warned adds unnecessary cost, time delay and risk to the project.

She said: I have written to the UK Government twice and offered to meet to discuss further as did the former cabinet secretary for the environment. Industry too has written.

However, I only heard yesterday from the Financial Secretary to the Treasury, that they do not see a route to remove that from deposits. This is deeply disappointing.

The Financial Secretary has offered to work with my officials and industry on potential VAT adjustments.

I understand this falls well short of what is needed here. But I have tasked my officials to work on this urgently to understand the implications and agree a way forward. The Government is committed to the scheme being operational as soon as practically possible.

Ms Slater added that her officials and the Circularity Scotland Limited company will agree a final timescale and clear milestones for delivery, insisting that she will announce this schedule to Parliament in due course.

Conservative MSP Maurice Golden said that if the scheme is going to be delayed, hopefully ministers at least use the time wisely to improve the proposed deposit return scheme.

He added: They can do that by ensuring a future-proof of open standard system compatible with the rest of the UK and a digital app allowing home collections is essential to stop disabled and vulnerable groups being effectively excluded.

Mr Golden also brought up the issue of transparency.

He added: Deposit return is shrouded in secrecy with a multi-million pound tender process hidden from the public and this Parliament.

"FOIs wont work because the SNP used a private company to oversee it.

So, we dont need to see the commercial responses but will the minister release the brief and specification that has been provided to bidders?

Ms Slater said that during the original debate to introduce the deposit return scheme, the Conservatives pushed for a delay to the scheme and then a further delay.

Pointing to the call for home collections, Ms Slater stressed that was absolutely part of the legislation for the deposit return scheme.

She added: The UK has not as yet defined their return scheme so there is nothing yet for us to align to.

The Scottish Government is leading the way on this as with so many things.

Labours Mercedes Villabla warned that VAT deposits haven't been a barrier to implementation of deposit return schemes in other European countries.

She added: We know how concerned the minister was about industry lobbying causing delays to the scheme. So can she confirm what discussion she has had with large-scale producers to ensure that it is they are not local authorities who will foot the bill of any delay?

And finally, we acknowledge that the minister has committed to come back to the chamber to outline the final timeline. But can she confirm today when she will return to the chamber?

Ms Slater claimed she was currently engaging with all the businesses involved to figure out what the shortest practical time it is possible to implement this scheme, given the challenges around Brexit and around the pandemic that is currently still raging.

She added: This scheme will be implemented by industry for industry so industry engagement is at the core of this scheme.

This is how the scheme will be implemented - it isbased on the producer pays principle.

Ms Slater said that a firm date for industry as to when this system will go live is absolutely critical, adding she will return to the chamber as soon as possible to make that announcement.

The Scottish Beer & Pub Association (SBPA), which is a founder member of Circularity Scotland Ltd the government appointed scheme administrator has called for the scheme to be delayed until at least September 2023.

Scottish Beer & Pub Association chief executive, Emma McClarkin, said:The beer and pub sector cautiously welcomes confirmation of a delay.

"Unfortunately, due to a variety of factors, it would have been impossible for the scheme to be ready by the previous date of July 2022.

We all share the ambition of the Scottish Government to reduce emissions, improve recycling and speedily move towards a more circular economy this delay is crucial in that.

"DRS will have massive impact on both brewers and publicans, to ensure a successful roll-out of the scheme, a delay until at least September 2023 is required.

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Further deposit return delay blamed on Covid, Brexit and VAT row with UK Government - HeraldScotland