BUSINESSES have been “misled, duped and deceived” by the firm running Scotland’s controversial recycling scheme, a former cabinet secretary has claimed.

Fergus Ewing told MSPs that Circularity Scotland Ltd (CSL) initially told the operators of recycling machines they would be paid in seven days, then changed it to a month.

The former rural affairs secretary said the organisation had changed its position on “handling fees” for the Deposit Return Scheme on March 1 without any consultation.

He also severely criticised Lorna Slater, the Green minister in charge of the DRS, for refusing to say whether she had been consulted on the change.

Mr Ewing has emerged as one of the sharpest critics of the DRS, which is due to go live on August 16 despite calls from small businesses for a delay because of added costs.

It will see a refundable 20p deposit added to all drink cans and bottles sold in Scotland.

Customers will get the money back by returning them over-the-counter to retailers or disposing of them in so-called “reverse vending machines”.

Mr Ewing said Circularity Scotland initially told retailers they would be paid for both manual and machine returns in seven days, then changed it to a month for machine returns.

Asking an urgent question at Holyrood, he said: “For the past 18 months, Circularity Scotland have, in all their documents, on their website and in their presentations, confirmed that payment to retailers using reverse vending machines will be made in seven days. 

“Tens of millions, if not hundreds of millions of pounds, were invested on the basis of those commercial terms."

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Holding up a document, he said: “Now that seven day period has been extended to one month, a decision taken by Circularity Scotland, with zero consultation with convenience stores, nor any explanation, nor any press release, hidden away in page 23 of this document here.

“Firstly, does the Minister agree that this decision by Circularity Scotland was taken in both an underhand and a sleekit fashion? Second, was she consulted on that decision? And third,  will she now order Circularity Scotland limited to rescind that decision?”

Reading from her notes, Ms Slater explained the return options open to retailers and said small convenience stores taking in manual returns would have seven day payments.

“Larger locations, for example, large supermarkets that need those automated vending machines to have that large capacity of return points, their payment terms will be longer," she confirmed.

“But that is very unlikely to affect the small businesses that the member is so concerned about.

"I will remind the member that this is an industry led scheme, as was agreed across the chamber and therefore the fees related to the scheme are a matter for industry to decide.”

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In response, a visibly furious Mr Ewing said: “Businesses have been misled, duped, and deceived by Circularity Scotland. There is irrefutable proof of that. 

“The minister has completely failed for the second week running to answer relevant, pertinent, vital questions. 

“Can I ask again, was she consulted by CSL on this unwanted unheralded and non consultant change from changing seven day payment to one month payment if indeed that's ever achieved under this scheme? Was she consulted? Yes or no?”

Again reading from her notes, Ms Slater replied: “Circularity Scotland is a private nonprofit company and it is responsible for operating this scheme, including setting retailer handling fees.

"As set out in the DRS regulations, the Scottish Government is not involved in setting retailer handling fees.

"The fee was agreed after an extensive knowledge gathering exercise which included analysis and modelling by PwC, which was appointed by the scheme members.”

Asked by Tory MSP Maurice Golden and Labour’s Colin Smyth whether she had been consulted on the change, Ms Slater still refused to give an unambiguous answer.

Instead, she referred back again to DRS regulations which said the Government is not involved in “setting” handling fees, but did not say if she had been consulted on them.

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After the question was finished Tory MSP Stephen Kerr used a point of order to accuse Ms Slater of showing “disrespect” to the parliament by failing to give straight answers.

Presiding Officer Alison Johnstone said it was for ministers to frame their own responses, but it was a matter of “courtesy and respect” that answers should address the questions asked, and there was a related requirement under the Scottish Ministerial Code.

Circularity Scotland has been asked for comment.