The Fed warns legal challenge if Scottish DRS is scrapped

The Federation of Independent Retailers said it will take legal advice against the SNP/Green administration if the Deposit Return Scheme (DRS) is abandoned.

The threat follows the Scottish Daily Mail report on Monday (22 May) saying the compensation bill for DRS could be as much as £500 million if it is axed by the Scottish government.

The Fed also rejected the comment from Scotland’s First Minister Humza Yousaf that the UK government should pay out any compensation.

“We support a deposit return scheme as it will boost recycling and reduce the litter which blights land and sea,” Mo Razzaq, deputy vice president of the Fed, said.

“However, Scotland’s scheme is deeply flawed and seems unlikely to get off the ground. We believe less than 3 per cent of our members have taken out leasing contracts for the machines to process the empties. For the scheme to succeed, ministers across the UK need to join Ireland in offering small shops financial help to lease these machines.

“And the few that took out contracts are regretting it as the Scottish government isn’t offering compensation for the delay so far. The seven-month delay until March next year is costing them over £2,200 at £320 a month for a five-year lease. We are taking legal advice with a view to court action.”

The Scottish DRS was due to go live this year on 16 August but has now been delayed until 1 March 2024.

The scheme however needs an exemption from the Internal Market Act by the UK government. Scotland’s Circular Economy Minister Lorna Slater has said last week that it could be axed by the end of this month if it is not granted exemption.

Meanwhile, Scottish Secretary Alister Jack has rejected the suggestion that the UK Government would foot the compensation bill for businesses if the scheme is scrapped.

Jack said it would “have nothing to do with the UK Government” if businesses lose money as a result of the scheme being scrapped.

Speaking to the MPs at the Scottish Affairs Committee, he added: “We were formally asked to consider this on 6 March, I have asked for impact assessments, and I haven't seen those yet.

“I have yet to see the workings that could let me take a responsible decision one way or the other on this with any confidence.”