SCOTLAND’S Deposit Return Scheme has been postponed to March 1st, 2024.
Laying out his policy agenda to the Scottish Parliament today (Tuesday April 18), First Minister Humza Yousaf said that the 10-month delay to the DRS would allow time for affected businesses to get ready – and for the government to work with those businesses, and Circularity Scotland, to address their concerns about the scheme.
Mr Yousaf also used his keynote speech to put the brakes on the Scottish Government’s moves towards new restrictions on alcohol advertising, saying that he had instructed his officials to go ‘back to the drawing board’ and work with the industry, and public health stakeholders, to agree a new set of proposals.
There had been calls for a ‘reset’ of the Scottish Government’s relationship with business, noted Mr Yousaf: “I am happy to start that re-set today.”
“I am the proud son of a business owner,” said the FM. “In fact, just this month my dad’s business turned 40 years old, and despite our family efforts to the contrary Mr Yousaf Snr has no plans to retire just yet.
“But businesses, and small businesses in particular, are the backbone of our economy and Government support for business is essential for the delivery of a wellbeing economy.
“We also need some government regulation of business. The business community itself recognises that an unrestricted market is incompatible with the wellbeing of our people, our communities and our environment.
“But the balance here needs to be right,” stressed Yousaf. “A number of business organisations have expressed concern in recent months about the balance that the Scottish Government has been striking. In fact, they have called for a ‘re-set’ of the relationship between business and Government.
“I am happy to start that re-set today. And I want to do so, by confirming three specific steps. The first relates to the Deposit Return Scheme.
“I remain committed to this Scheme as a way to increase recycling, to reduce litter on our streets and on our beaches and help achieve our net zero ambitions,” said the FM.
“But we recognise the uncertainty that continues to be created as a result of the UK Government delaying the decision to exclude the scheme from the Internal Market Act. We had hoped for a decision on that this week – but it has not come.
“At the same time, I – and the Circular Economy Minister – have heard the concerns of business, particularly about the scheme’s readiness for launch this August.
“As a result, we will now delay the launch of the scheme to the 1st of March 2024,” he confirmed. “This provides 10 months for businesses to get ready.
“We will use that additional time to work with businesses, and Circularity Scotland, to address concerns with the scheme and ensure a successful launch next year.
“We have also developed a package of measures to simplify and de-risk the scheme, and to support small businesses and hospitality in particular.
“The Circular Economy Minister will provide further details to Parliament this week on this package, of the new timetable, and our engagement with the UK Government over the critical decisions now that we need them to make to allow the scheme to proceed in terms of that exemption of the Internal Market Act.”
Yousaf’s second pro-business step referenced the Scottish Government’s controversial consultation on restrictions to alcohol advertising.
“The aim of this consultation – to reduce the harm caused by alcohol to children – is not just admirable but it is one I support wholeheartedly.
“But it is clear that some of the proposals have caused real concern to an industry which is already facing challenges on multiple fronts. I have therefore instructed my officials to take these ideas back to the drawing board, work with the industry, and crucially with public health stakeholders, to agree a new set of proposals,” he said.
“I believe that all of us want to reduce the harm caused by alcohol, particularly to young people – but without undermining Scotland’s world class drinks industry or tourism sector. I am hopeful that by taking a fresh look at this issue, we can find a way forward which achieves both of these crucial aims.”
Finally, Yousaf said he was asking key business representative groups to engage in urgent discussions with ScotGov to agree a ‘New Deal for Scottish Businesses’.
“The discussions will explore, among other things, how government can better support our businesses and communities using the policy levers we do have – including Non-Domestic Rates.
“These three steps will all, I trust, be welcomed individually by Scotland’s business community. But I hope that collectively, they also send a broader signal about this Government’s approach to business,” he concluded.
These commitments were given an immediate warm welcome by Scotch Whisky Association Chief Executive Mark Kent, who said that Mr Yousaf had listened to industry concerns on the alcohol marketing consultation and the DRS.
“Our industry has always supported the goals of the Deposit Return Scheme, but the Scottish DRS as currently devised would hamper the efforts of businesses across the country to reduce waste and bring about a more circular economy,” said Mr Kent.
“The delay until March 2024 and full review in the coming months will enable us to work with government to ensure DRS is aligned with other systems across the UK and to once again look at the exclusion of glass, which the experience of international schemes tells us will help to simplify the scheme, and reduce the cost for businesses and consumers.
“The Scotch Whisky industry is also aligned with the Scottish government on reducing alcohol misuse. The sweeping proposals set out in last year’s consultation would have distracted from that goal and would have caused unnecessary damage to the Scottish economy and society,” said Kent.
“The First minister recognised the need to reconsider this during the SNP leadership campaign and he has now followed through on his promise to withdraw the current proposals, and we look forward to working in partnership with government to promote moderation and reduce harmful consumption.”
UKHospitality Scotland Executive Director Leon Thompson declared himself ‘delighted’ that the FM had acted on industry calls for a policy rethink.
“We urged the First Minister, when he was appointed, to reset and repair the relationship with business and his actions today show that is his intention,” said Thompson.
“Not only will the delay to the Deposit Return Scheme avoid inflicting enormous pain and cost onto hospitality businesses this August, it also offers a signal to business that their concerns are being heard and their importance to the Scottish economy recognised.
“Commitments to take a fresh look at the alcohol and marketing proposals and reviewing business rates as part of looking at better support for business are further signs the Scottish Government will be taking business more seriously and are extremely welcome,” he said.
“A wholesale business rates review, in particular, has been a long-standing ask of UKHospitality Scotland, in order to bring the system into the modern age.”
But Thompson concluded: “Let’s not forget that the Deposit Return Scheme will return in March next year and the next 10 months need to be used extremely wisely and productively to make it fit-for-purpose. Meaningful engagement with hospitality businesses is essential to get this right and UKHospitality Scotland is eager to work with the Scottish Government on just that.”
The Night Time Industries Association Scotland agreed that, welcome though the DRS delay was, the 10-month pause must be used for a ‘total re-design’ of the scheme.
“We need to be clear that the scheme as designed is fundamentally flawed and remains completely unworkable for large parts of our sector. It would also be significantly inflationary and worsen the cost of living pressures being felt across society.
“Scotland’s DRS as currently proposed cannot be fixed by tweaking around the edges, and a total redesign, learning the lessons of schemes elsewhere, is needed,” said NTIA. “If there is to be a scheme it also must be identical in scope across the UK, launching at the same time UK wide, and it should be much simpler and less expensive to implement.
“We urge Scottish Government to now engage in meaningful consultation with businesses and commission a full review and redesign from scratch of the deposit return scheme.”
