Deposit Return Scheme mess proves we need two new governments

Circulatory Scotland, the company set up to administer the bottle recycling scheme, has gone into administration after the Scottish Government shelved the project. Some 66 people could lose their jobs. With the scheme not now due to go live until October 2025, the Scottish National Investment Bank could lose its £9m investment of taxpayers’ money.

Out-of-pocket businesses who invested in the deposit return scheme (DRS) have demanded compensation and talk of suing the Scottish Government.

In short, it’s an almighty mess – a mess to rival Glasgow Green after a festival – and the clear-up has barely begun.

This week the minister responsible, Lorna Slater of the Scottish Greens, faced a vote of no confidence. She’s faced fierce criticism for months over a lack of business confidence in the scheme. The vote of no confidence was designed to force the SNP to back an underperforming minister and bolster the Tory charge that the Green tail is wagging the SNP dog. Predictably, Ms Slater won as the SNP and Greens rallied to protect her (Fergus Ewing excepted).

But what this episode has done is to lock the SNP even more firmly into the laughable defence that the DRS mess is entirely the UK Government’s fault, with Ms Slater and the Scottish Government completely blameless in all of it.

While businesses fume, and Circularity Scotland staff try to work out how they’ll pay their bills, all we get from Humza Yousaf and Lorna Slater is defiance and finger-pointing. The “wisnae me” defence has never sounded so inadequate.

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Both governments bear responsibility. The SNP blames the UK Government for setting hard-to-meet conditions on the scheme to make it compatible with a UK Government version that doesn’t even exist yet. These tough terms do look heavily politically motivated.

But look at how this policy developed, and the Scottish Government’s culpability is inescapable. Ministers should have foreseen problems in relation to the UK internal market and proceeded with caution; they did not.

This sorry mess is the fruit of mistrust, the result of the SNP’s deliberate antagonism towards Westminster over many years and the UK Government’s response to that. It’s what happens when two governments who should be working together for the common good, become far more concerned about outmanoeuvring each other.

The DRS was conceived of, as so many SNP policies are, seemkingly with the case for independence in mind. It was to be launched before the rest of the UK launched their schemes and to be more ambitious than other UK versions. This approach is in keeping with other SNP policies, such as the net zero target and the phasing out of petrol and diesel cars. The rationale is to show that Scotland is different from the rest of the UK and that progressive Scotland is being held back by the Union.

But in this case, because of the obvious challenges to business created by having different schemes operating within the same UK-wide market, doing things differently was never a great idea.

The Scottish Government has blamed the scheme’s demise on the “11th-hour” intervention by the UK Government requiring that glass be excluded and the scheme be compatible with the English one on fees and deposit levels.

Well, Circularity Scotland says the scheme could have gone ahead anyway. But even if you believe shelving it was the only option, ministers should have anticipated the problems. Three years ago, in 2020, three of the Scottish Government’s own current ministers, including Patrick Harvie, Ms Slater’s co-leader, were on a committee scrutinising the Internal Market Act. They singled out the DRS as an area of concern and said the act would create “complexities and legal difficulties” in relation to it – a point of view the Scottish Government shared.

Ms Slater should have foreseen the difficulties around the Internal Market Act, but then she is part of a government that positively relishes public clashes with Westminster.

For 15 years, the SNP has tried to undermine devolution. The strategy has been to foster discontent with devolution in any way possible, to give people an incentive to back independence. It has involved howling with confected outrage whenever the UK Government can be portrayed as venturing into Holyrood’s territory.

This has utterly destroyed trust between the two sides. Westminster concerns are defied, dismissed or endlessly challenged. We are still waiting, for instance, for the Scottish Government to reframe Scottish legislation on the UN Convention on the Rights of the Child to make it compatible with the devolution settlement, two years after the Supreme Court ruled Holyrood had overreached its powers.

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The Scottish Government should have foreseen the “complexities and legal difficulties” and should have worked in concert with the UK Government to find a way forward for the DRS.

But the UK Government too is culpable. The conditions Secretary of State Alister Jack set on the scheme – insisting on compatibility with a UK scheme that hasn’t even been set out yet – made it difficult for the Scottish scheme to launch ahead of the English one. His action makes a unionist point very loudly: look, the Scottish Government has been forced to concede that putting up barriers between Scotland and the rest of the UK is bad for business. Again, like the SNP, the Tories seem more motivated by political point-scoring than getting things done. Surely with goodwill and imagination a solution could have been found that would have allowed it to launch earlier.

Enough. Scotland deserves better than this. This war of attrition in which we are all casualties, must end. The SNP, Greens and Tories should be working together for our benefit, not using us as pawns in their endless argument. They need to grow up and if they can’t, they all need to go.