The Scottish Government was “utterly irresponsible” in the way it tried to implement its deposit return scheme (DRS), a former UK government minister has said.
Giving evidence at the Court of Session in Edinburgh on Friday, former Scottish secretary Lord Alister Jack said the Scottish Government had withheld “commercial information” from businesses about a risk the scheme would be blocked.
Lord Jack was Scottish secretary when the UK government refused to grant the Scottish DRS an exemption for glass bottles under the Internal Market Act (IMA).
This decision led to the Scottish Government changing its plans for the scheme, which was going to be administered by Circularity Scotland Limited (CSL), in 2023.
A UK-wide DRS is planned but it is not expected to begin before 2027.
Biffa Waste Services is suing the Scottish Government at the Court of Session, seeking £166 million of reparations over the decision to delay the DRS.
Lord Jack said he was “appalled” by a letter sent by circular economy minister Lorna Slater in May 2022, which he said “misled” businesses about the scheme.
“I am staggered that a letter was produced by officials and signed by a minister and sent out to companies that were investing their shareholders’ money or their own money – and lots of it – and not knowing the inherent risks of the whole picture,” he said.
He added: “It was, for me, irresponsible not to tell companies that are spending money what the whole story is, and explain to them the risks.
“There was a high level of risk and it was utterly irresponsible to send this letter, and that’s my opinion.”
Giving evidence in the afternoon, Ms Slater denied that a letter sent to Biffa on May 17 2022 had been designed to “persuade” the company to sign up to be the scheme’s logistics partner.
She said: “This letter states the accurate and correct statement of the First Minster’s and Scottish Government’s commitment to the DRS go-live date, and the nature of CSL’s appointment.”
The letter, which was shown to the court, said the government’s commitment to delivering the scheme by August 2023 “remains unwavering”, and expressed the hope the firm was “reassured”.
It also said that Biffa signing up to the scheme would be a “major vote in confidence in both CSL and DRS, and help maintain and increase momentum towards successful delivery”.
Ms Slater was repeatedly pressed by Biffa’s lawyer, Roddy Dunlop KC, on whether the letter should have made clear that its reassurances were “entirely dependent on obtaining an IMA exclusion”.
She replied that the need for exclusion was known about and was “in hand”, and that it was one of “many complicated, potentially existential, risks” to the scheme that the government was confident it would be able to manage.
She added that the letter was not a “project update”, and that if one had been requested it would have been a “different matter”, and would have gone into detail about issues that could affect the project.
The former minister said that not only had there been no reason to think the UK Government would block the Scottish DRS, it was not expected it would use the IMA to do so.
She said all four UK nations were working towards a DRS at the time, and that the Scottish Government was simply “going to be first because we passed our legislation first”.
She pointed out that the 2019 Conservative manifesto promised a DRS that included glass.
She also said the IMA was intended to be used to “manage divergence” between UK nations at the end of a process set out in the common framework.
In his evidence earlier, Lord Jack said an exclusion from the IMA had a “high bar” and required impact assessments to be carried out.
Lord Jack also said that as Scottish secretary he had a number of “concerns” about the scheme, including the impact it would have on businesses and consumers, and its impact on inflation at a time of the cost-of-living crisis.
He said more than 1,000 businesses and stakeholders had written to him “saying it was going to seriously impact and damage their business, supermarkets telling me it was going to damage their business, consumers and so on”.
He dismissed the suggestion his concerns were politically motivated, insisting it was “beholden” to him as Scottish secretary to “ensure our businesses and our consumers were protected”.
Lorna Slater is due to continue her evidence on Tuesday.
