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Over the summer, we have been working with officials to come up with sensible conditions for interoperability, such as how we will agree on how we will set the deposit and on how exclusions will work. That has been discussed among officials, and it is now for DEFRA and the UK Government to sign that off, to agree on what the conditions will be and to set that out in its regulations.

We are waiting on DEFRA’s timescale; I do not have a timescale for that. I do not know whether my officials have more of an update.

That is a question for DEFRA. It is for DEFRA to say how it wants to implement the scheme and how it intends that scheme to operate in the UK.

I am sorry; I was distracted. Could you repeat the question?

If we had been able to run a scheme, Circularity Scotland would have been able to operate it. As you rightly point out, Circularity Scotland was willing to operate a scheme without glass, but none of us can operate a deposit return scheme if we do not know what the level of the deposit will be, so we were unable to proceed.

That is correct.

The challenge that I have there is that, in this case, the common framework failed to do its job. We engaged from 2021 with the UK Government on the deposit return scheme legislation. We went through every step of that common framework. The common frameworks are the mechanisms by which the UK and the devolved Governments work together to come to agreement. Our officials had worked together. I met my UK Government DEFRA counterparts monthly, and we had worked through the framework all the way through. We had done everything that we needed to do. We understood that we would secure the full exclusion from the 2020 act because we had done everything that we needed to do in order to secure it.

We did not get the exclusion that we expected to get as a result of the common framework process, nor did we get the partial and temporary exclusion that we did get in a timely manner. That came very late in the day, at the end of May, but we had been working with UK Government on the scheme for years.

If UK Government ministers are not following the process of the common framework or agreeing to abide by the common framework, and can, in fact, change their mind at the 11th hour on a whim, we have a challenge. The other point is that the UK Government has not provided any evidence for the change. The UK Government did not do impact assessments on the change and, as far as I am aware, it has not even written out to say why it made this change. If the UK Government can proceed in that way, the common frameworks are clearly not working.

I am almost certain that the UK Government would not take it well if I stepped away from the common frameworks process and changed my mind at the last minute about something that had previously been agreed. I feel that that would go down badly.

No, thank you, convener.

Motion agreed to.

I last appeared at the committee to discuss our DRS not long after we had received the UK Government’s fatal decision of a partial and conditional exclusion from the United Kingdom Internal Market Act 2020, which made the scheme impossible to progress and forced a delay until at least October 2025. After intensive engagement with businesses to understand the effect of the UK Government’s decision, it was clear that that was the only course of action available to us. No business could seriously be asked to proceed, given that we were unable to say what the deposit would be or what labelling requirements would be in place. As a result, we halted our scheme and agreed to work with the UK Government to develop a UK-wide approach, including a common start date. The draft regulations that the committee is scrutinising set that date.

We have always said that we recognise the need for interoperable schemes, and we designed our scheme in good faith that it would align with schemes across the UK when those launched. When we developed our scheme, both England and Wales planned to include glass in their deposit return schemes. England U-turned on glass only recently, reducing interoperability with Scotland and Wales as a result. Even the UK Government’s analysis shows that the inclusion of glass significantly increases the environmental and economic benefits of the scheme.

Waste management, which includes the DRS, is wholly within devolved competence, so it is extremely disappointing that the 2020 act has been used by the UK Government to undermine this Parliament’s ability to introduce a DRS in Scotland. As a result, business confidence in the DRS has been damaged.

Scottish Government officials have continued to work with their counterparts in the UK, Welsh and Northern Irish Administrations over the summer to develop interoperable deposit return schemes based on the conditions that are set out in the UK Government’s IMA decision letter. Many of those discussions have been shaped by the experience and expertise that were gained through work on the Scottish DRS. Although there has been positive progress, it is important that the UK Government sets out its scheme in regulations in order to maintain momentum, build business confidence and ensure that the DRS launches successfully.

We are in a climate emergency and we need to take action now. Scotland’s towns, countryside and beaches remain plagued by littered cans and bottles. We need to move away from a throwaway culture and embrace new ways to reduce our waste and emissions. The DRS will help us to achieve that.

It is disappointing that Scotland’s DRS will not launch in 2023, but we will continue to work in a spirit of collaboration to realise the economic and environmental benefits that the DRS will bring when it launches across the UK. The onus is now on the Department for Environment, Food and Rural Affairs to make a success of the DRS.

I am happy to take questions.

It was not a matter of getting the labelling or the deposit level correct; it was a matter of knowing what those things were once the UK Government had said to Scotland, “We’re not going to allow you to set these things. We’re going to intervene with the internal market act and not allow that. We will set them.” The UK Government does not have a timeline for setting those things.

One of the ideas that has been proposed is that, unlike in Scotland, under a UK scheme, the scheme administrator—what the UK calls a deposit management organisation or DMO—might set the deposit level. That would mean that the deposit level would not be in place until after the DMO was in place and after it had done its market research to set that level, which could take as long as two years.

It was not a question of getting the level correct. We are now at the mercy of DEFRA and the UK Government’s timescale and regulations. I could not have said to Scottish businesses that we did not know when the deposit level would be set but that they still needed to get the scheme going in August 2023 or even March 2024. Businesses simply cannot operate under those conditions.

I will address your two points, convener. With respect to a low level of deposit, deposit return schemes as envisioned by all parts of the UK—certainly Scotland—are run by industry itself, so the deposit needs to be set at a level that allows the scheme to operate. It is a business; the industry runs a business to collect the materials and get them recycled. The UK Government might consider a scheme in which the DMO sets those levels, but the DMO will still be obliged to set them high enough for the business to operate. The research that we had done on putting in place Scotland’s scheme determined that 20p was the level that was needed to make the scheme viable on a business case. It might be that, for a UK-wide scheme, that figure could be set at a different level—some schemes around the world even have different levels for different types of material—but the level for the Scotland scheme was 20p. If we lowered that, we would be undermining the business case. How can industry run a scheme that is a business without a business case in place? Setting the deposit too low means that the scheme cannot operate.

With respect to labels, the Scottish Government cannot set labelling requirements as that is not a devolved power. The industry had supported labelling changes. The big companies have sophisticated systems in place to get their labelling up to spec—they have much faster line speeds and so on in getting product through. Small businesses need to buy in quantity in order to make it worth while for them, but then it takes them a long time to work that product through. We cannot and did not set labelling requirements. However, the UK Government might do that, if you see what I am saying. I would have been saying to businesses in Scotland, “We’re going to put in place a deposit return scheme, but I can’t tell you what you’re going to have to say on the label and I can’t even tell you what the deposit is, which means that you can’t make a business case.” That would have made the scheme unviable, so we were unable to proceed.