First Minister states there is no case for compensation over Scotland’s deposit return scheme
First Minister Humza Yousaf has revealed the Scottish Government will not be compensating businesses over Scotland’s DRS debacle.
Speaking on BBC’s Sunday with Laura Kuenssberg show, the First Minister stated that he believed the Scottish Government would not have to compensate businesses after the announcement it would be delayed until 2025.
He said: “We don’t believe there’s a case for the Scottish Government to need to compensate because the action we’ve had to take is because of that 11th-hour, last-minute intervention from the UK government, which has meant that a Scottish scheme unfortunately isn’t viable.”
The comment from the First Minister comes after the Scottish Government announced that the implementation of DRS would be delayed until October 2025, falling in line with the UK go-live date. The Scottish Government maintains that this was due to the UK Government’s intervention to remove glass from the scheme as it said it made the deposit return scheme unviable.
Following the latest delay, businesses across Scotland demanded the Scottish government offer compensation to retailers that have invested into the scheme – including new reverse vending machines as well as the store refits required to fit in the machines.
Mo Razzaq, national deputy vice-president at the Federation of Independent Retailers and a Blantyre retailer, has said the latest move from ScotGov will impact on the relationship it will have with retail businesses in the future, something that Yousaf has aimed to improve since he came to the position earlier this year.
Razzaq said: “How can the Scottish Government claim that there is no case to answer? It told us repeatedly to get ready for this scheme. Shopkeepers who took out leasing contracts are paying almost £4,000 a year for now redundant machines to process returned bottles and cans.
“Some retailers have also paid thousands for structures to house the machines outside or shop fitting to accommodate them inside. This is money they can ill afford. The number of store closures in towns and villages across Scotland confirms small shops have fragile economic existence.
“The Scottish Government’s claim to seek an improved relationship with business will have faint credibility if it seeks to evade paying compensation.”
Pete Cheema, chief executive at the Scottish Grocers’ Federation (SGF), voiced similar concerns stating that the Scottish Government “must address this issue as a matter of urgency”.
He said: “Compensation, however, will be required for businesses who will have made significant investment decisions and signed up to contracted commitments based on glass being an in-scope material and then there are the costs associated with the further delay to scheme implementation.
“It is vital that both UK and Scottish ministers provide immediate clarity, certainty and confidence for business on the critical path and timescale for the development for the UK scheme.
“SGF will continue to engage with both the Scottish Government and the UK Government on the next steps and to ensure that our sector’s voice is heard.”
For all the latest updates on DRS click here to read further Scottish Grocer coverage on the matter.