Dear Secretary of State,
We, the undersigned organisations, have the support of well over 500,000 members, supporters and volunteers across the UK. Together, we have been working on this issue for over a decade. We noted comments in last week’s papers by a “UK source” claiming that your Government will refuse to grant an exemption for the Scottish deposit return system under the Internal Market Act 2020.
This same source is quoted as saying “The present scheme is in deep trouble and that is before the UK government has been asked to relax laws protecting cross-border trade”. However, the Minister for Green Skills, Circular Economy and Biodiversity wrote on 9th February that “The formal process for excluding the deposit return scheme regulations from the Internal Market Act is well underway. This is the same process we went through to protect Scotland’s ban on many single-use plastic products. I expect a decision from the UK Government as soon as possible given that this is what is needed to give industry absolute clarity.”
Should an intervention under the Internal Market Act be under consideration, we would like to set out the legal, economic, and environmental implications of any attempt to block the long-planned Scottish deposit system, primarily for Scotland but also for the rollout of parallel systems in England, Wales and Northern Ireland from 2025.
It is first worth noting that the Scottish system will be identical in scope and operation to the Welsh system announced within the DEFRA consultation response your Government published on 20th January 2023, and very likely the same deposit level too. No mention was made in that document of the Internal Market Act: indeed it states “Scotland is moving forward with its own DRS delivery”.
The only substantive operational difference between the Scottish system (announced in September 2017) and the system your Government intends to introduce in 2025 is the inclusion of glass. It would be hard to conclude that the Welsh Government and Parliament should be permitted to include glass but the Scottish Government and Parliament should not. The principle that the UK systems do not have to be fully consistent has already been accepted, and DEFRA’s announcement accepts the principle that products in glass bottles can be dealt with differently in various parts of the UK.
Furthermore, the basic regulations underpinning the Scottish system were laid in September 2019, prior to the passage of the Internal Market Act, and were made early in 2020, prior to the December 2020 commencement of the Internal Market Act. At the point at which those Scottish regulations were made the UK Government’s formal commitment to an equivalent system was already eighteen months old.
The current 16th August 2023 launch date for the Scottish system was announced in November 2021, and the relevant Scottish Statutory Instrument was made early in 2022, well after the commencement of the Internal Market Act.
Industry has invested significant sums in preparation for the August 16th 2023 launch date, first via Circularity Scotland Ltd, the not-for-profit company established by industry to manage compliance, and through the companies they have subcontracted collection and recovery to, amongst others.
Over this period, and especially in the last six months, there have also been substantial investments made by retailers in reverse vending machines for larger stores and in significant changes to store layouts, by producers in terms of labelling and stock management, and by wholesalers to enable stock destined for the Scottish market to be managed separately from stock for the rest of the UK.
At the same time, a series of important changes have been made, both by Scottish Ministers and by the scheme administrator, to take account of the specific needs of small business, and further refinements are expected prior to 16th August.
Although in our view it is at least questionable whether an exemption under the Internal Market Act is even required, it would be extraordinarily disruptive to refuse one at this late stage rather than immediately on the commencement of that Act. A move of this sort at such a late stage certainly could be seen, by those businesses that have invested, as both irrational and procedurally unfair.
Such a system brings broad economic and environmental benefits. We would therefore have objected to any attempt to block or delay this system, even if it had been announced immediately on the commencement of the Internal Market Act. But announcing such a move with less than six months to go would maximise the disruption to businesses of all sizes operating in Scotland or selling into the Scottish market.
It is therefore our view, given the advice we have received, that you would find yourself in legal quicksand if permission was refused for the Scottish system under the IMA and that refusal was then challenged in court by any business thus affected.
Drinks produced elsewhere in the UK (or indeed beyond) will of course not be barred from the Scottish market – they can, and will, be sold at the same price, just with that same fully refundable deposit paid by and refunded to the customer. This is no more a barrier to UK trade than it was, within the European Union single market, when Estonia and Lithuania operated deposit return systems prior to the launch of the Latvian system.
The environmental reasons for not opposing the regulations made by the Scottish Parliament are of course also extremely strong. The Scottish system has already been delayed by 867 days to accommodate industry demands for more time.
That delay has increased costs for Scottish local councils. Over that period, Scottish local authorities will have spent an estimated £18.2m on higher levels of street cleaning and bin emptying, money that could have been spent on other public services had deposits been in place.
Over that time, using data from international circular economy experts Reloop, more than 2.1 billion drinks containers have been wasted in Scotland – either littered, landfilled, or incinerated. Every MP and MSP we speak to has received complaints about the volume of litter in their constituency, and typically around a third of all litter collected in Scotland is drinks containers.
The median modern deposit system sees return rates of 91% for PET, 89% for cans, and 87% for glass. In contrast, Scotland currently achieves 63% recovery for relevant glass containers, 50% for PET plastic bottles, and just 48% for aluminium cans. Making an aluminium can with virgin materials uses 20 times the energy used in recycling a can, saving producers money and reducing dependence on high-carbon energy generation. Excluding glass, the most costly material to handle through kerbside and litter collection, also risks encouraging producers to switch to what remains the most carbon-intensive material.
Accordingly, that 867 day delay to the start date will lead to 380,000 tonnes of avoidable carbon emissions, and further delay via legal action would only add to that number. Such a process would maximise uncertainty for industry, especially small businesses, during what remains a difficult time for them in other ways.
The litter, waste, energy and carbon benefits of Scotland’s deposit system are similar to those your Government’s system will see once it launches, which will be very welcome, although the proposed omission of glass will somewhat reduce those benefits in England.
We also note comments you made, reported in the Times, suggesting there is an inflationary impact of the deposit itself: “Aldi will sell 12 bottles of Scottish water for £1.59. Under this scheme, that will become £3.99. If that is not inflationary, if that is not adding to people’s cost of living, I do not know what is.”
The deposit is of course returned to the customer in full when they return an empty can or bottle, and therefore does not add to the cost of the items purchased. Also, should this be part of any substantive argument made against the continuation of the Scottish deposit system, it would of course be exactly the same in England once your system launches, in 2025 or thereafter.
Scotland has been planning a system to bring those benefits in since 2017, and delaying and undermining the Scottish system would have serious negative implications for confidence in those forthcoming English, Welsh and Northern Irish systems, and indeed their broader environmental ambitions to create a circular economy in the UK. We would therefore encourage you not to take decisions which would delay and undermine those environmental objectives while also jeopardising multi-million pound investments already made in preparation for this most basic circular economy measure.
Yours,
Dr Kat Jones, Director: Association for the Protection of Rural Scotland
Tom Fyans, Interim Chief Executive: CPRE, the countryside charity
Richard Murray, Chairperson: Eco-Congregation Scotland
Catherine Gunby, Executive Director: Fidra
Nina Schrank, Senior Campaigner: Greenpeace UK
Denis Mollison, Trustee: Hebridean Whale and Dolphin Trust
Andrea Crump, COO: Keep Britain Tidy
Dr Ian Humphreys, Chief Executive: Keep Northern Ireland Beautiful
Barry Fisher, Chief Executive: Keep Scotland Beautiful
Owen Derbyshire, CEO: Keep Wales Tidy
Calum Duncan, Head of Conservation Scotland: Marine Conservation Society
Pete Richie, Executive Director: Nourish Scotland
Beryl Leatherland: Scottish Wild Land Group
Dave duFeu, lead organiser: Spokes, the Lothian Cycle Campaign
Louise Reddy, Policy Officer: Surfers Against Sewage
Alastair Seaman, Director: Woodland Trust Scotland
Kate Norgrove, Executive Director of Advocacy and Campaigns: WWF-UK