Scotland’s Deposit Return Scheme (DRS) will cause “economic carnage” for businesses, SNP leadership candidate Kate Forbes has said.
The Finance Secretary backed calls to pause the scheme to allow businesses some “breathing space” to recover from the cost-of-living crisis.
It comes as UK Hospitality Scotland urged candidates to put the “flawed” scheme on the back burner amid concern over its impact on trading.
The scheme, set to begin in August, involves shoppers paying an extra 20p when purchasing drinks in a can or bottle, with the deposit returned when they bring back the empty container for recycling.
Businesses have until midnight on Tuesday to sign up, with industry figures warning it could impose potentially fatal costs.
Speaking as she launched her official leadership campaign at the Cairngorm Brewery in Aviemore, Forbes said the scheme was “well intentioned”, but significant concerns had emerged about its execution.
She told journalists: “Its execution is leaving businesses like the Cairngorm Brewery fearing for their future.
“It’s leaving businesses like this fearing the economic carnage it will cause if the timetable continues as planned right now.
“The idea of having a deposit return scheme is sound, but we cannot have a scheme that is well intentioned but fails to achieve its aims and causes economic carnage in the process.”
She added: “Businesses back it, they want it to work, but right now, they do not have the information and the confidence in an overly complex scheme.”
In an appeal to party members as she takes on Health Secretary Humza Yousaf and Ash Regan for the top job, Forbes told businesses to “trust my track record of delivering for them” in her capacity as Finance Secretary.
She added: “What businesses need is a bit of breathing space, they have gone through Covid, Brexit, the cost of living, their energy bills have gone up exponentially and the government should be giving them a bit of space rather than putting additional complex bureaucratic requirements on them.”
Circular Economy Minister Lorna Slater said at the weekend that small drinks producers may be given a one-year exemption from the planned scheme.
Slater told BBC Radio Scotland’s Good Morning Scotland programme: “No-one with any credibility to support business in Scotland would delay the scheme any further because those businesses that have made that substantial investment, those shops that have got their planning permission for their reverse vending machines, they don’t get their return on that investment until those 20 pences start flowing.
“The question on the table and the sensible question is what small producers can do to become compliant with the scheme, we’ve been working very closely with small producers, we’ve got an extra £22m of cash on the table, cash flow support for them last week, we’ve got support for labelling, we’re working through the issues.
“One of the requests on the table from small producers is that grace period and that’s exactly what we’re working on to see how that would work with the scheme, bring those producers into the scheme at the time that works for them.”
Meanwhile, UK Environment Minister Lord Benyon warned the scheme could result in “booze cruises” to England and argued for a UK-wide approach.
He accused the Scottish Government of having “failed” Scots and businesses by pursuing its “Kafkaesque” scheme before he argued a UK-wide approach is the best option.
He claimed the DRS would result in “huge costs” which could encourage people to travel south of the border to buy cheaper drinks.
UKHospitality Scotland executive director Leon Thompson said: “The flawed model, complexity and burdens of the scheme will put unnecessary pressure on both businesses and consumers, who are all struggling with the cost-of-living crisis.
“These cast-iron facts, alongside concerns around how it could impact trading with the rest of the UK, necessitate an immediate halt to the scheme’s introduction and I am calling on all leadership candidates to commit to pausing and then ordering a full review of this now discredited scheme.
“With all nations in the UK planning to introduce a deposit return scheme, we need to see a UK-wide scheme that works for businesses and consumers, as well as all our sustainability and net-zero goals.
“Hospitality businesses are not against a scheme, but they want one that takes account of the excellent rates of recycling across our sector and targets resources where DRS can make a difference to littering and sustainability targets.
“The current iteration does none of that which is why a full review is now essential.”
Yousaf said he would go ahead with a similar exemption to the one being considered by Slater if he becomes first minister, while Regan has said she would delay the scheme, saying it needs to be “returned and recycled”.
Scottish Secretary Alister Jack has hinted the UK Government might not agree to a UK Internal Market Act exemption for the scheme. However, the UK Government said that following any decision it would be up to the Scottish Government whether they proceed with the scheme or not.
A UK Government spokesman said: “The Scottish Secretary has urged the Scottish Government to pause its scheme and work with the UK Government on a solution that works for both Scotland and the whole of the UK.
“That would be the best way to maximise environmental benefits, minimise disruption to the drinks industry and ensure choice for consumers.”
The Scottish Conservatives have demanded an emergency ministerial statement on Tuesday.
Tory MSP Maurice Golden said: “It should never have got to the stage where, on the eve of the deadline, key questions about the scheme remain unanswered – such as, will there be a grace period for small producers and, if so, what is a small producer.
“But, astonishingly, that’s where we are.
“It’s no exaggeration to say there are 24 hours to save Scottish businesses, that is why we must have an emergency ministerial statement – to lift the cloud of uncertainty and fear hanging over them.”
A Scottish Government spokesman said: “Similar schemes are common in other European countries and have been shown to be very effective in improving recycling rates and tackling littering.
“The regulations that established Scotland’s deposit return scheme were based on these schemes and passed with cross-party support in 2020.
“Any producers with concerns about meeting their obligations should get in contact with the relevant organisations.
“We have always said we will take a pragmatic approach to implementation, to ensure that as many businesses as possible can be part of Scotland’s deposit return scheme and can continue to sell in Scotland after 16 August.”
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