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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.

As we said at the time, it is possible to operate a deposit return scheme in Scotland with cans and plastic bottles, but it seems absurd not to include glass, because the environmental and business case supports its inclusion. It would have been possible to run a scheme without glass, but it would not have been as good. However, as we said at the time, any deposit return scheme is better than none.

Glass was not the only reason why we had to halt our scheme. There were two further issues. They relate to the other conditions that were laid out in the partial and temporary exclusion to the 2020 act, which were about labelling and the deposit level. As you know, businesses require certainty to be able to deliver something this complicated. If we were not even able to say what the deposit level or the labelling requirements would be—from working with businesses, especially small businesses, on Scotland’s DRS, we know that it requires up to a year, and in some cases longer, to change labelling—they simply would not have been able to deliver a deposit return scheme. Businesses could not deliver the DRS without knowing those things, and we could not know those things because the UK Government has not made a decision on them and has not passed regulations setting out what it intends to do. That meant that we were left with no option.

However, the convener is correct that it is possible to run deposit return schemes without glass.

We have updated the business regulatory impact assessment for the regulations that the committee are looking at today. You have that in front of you. The major change caused by the scheme coming in later is that all the carbon and waste benefits that we would have had by getting the scheme up and running in August this year, as was originally intended, are being lost. There will be two more years of that pollution and waste.

My officials can give you more detail about the BRIA.

The member is absolutely right to be concerned about this point, and you can imagine that it was a great concern to me as well at the time. There was not only the investment but people’s jobs, including those of the employees of Circularity Scotland and all the people who had contributed to the work that they were doing to build IT systems and so on. All those people were affected by that decision so it was something that I took very seriously.

However, we were unable to proceed with the scheme because, when you are working on a deposit return scheme—as you will have heard in the chamber from other members—businesses need certainty. Deposit return schemes are enormous and complex, and our scheme will affect every single person in Scotland and tens of thousands of businesses. Anyone who sells, handles, purchases or in any way procures either drinks or their containers will be affected.

What businesses need is certainty. They asked for that at every single meeting with them and they asked us to tell them exactly how the scheme was going to work. With the partial and temporary exclusion, the UK Government threw a huge amount of uncertainty into the works. If I cannot even say what the deposit level will be in a deposit return scheme, I cannot go ahead.

When the First Minister and I sat down at a business round table after 26 May, when we got the letter from the UK Government laying out the temporary and partial exclusion, businesses said that they just could not deliver the scheme at all given the level of uncertainty. They said that, even with all the investment that businesses had made, they would now prefer to align with the UK.

There was no way with the conditions that were imposed on us.

The scheme would have gone ahead in August 2023 if the UK Government had granted a full exclusion on the timeline that we had previously agreed.

That is a fair question. It is almost certain that we will need to revise the regulations again anyway, because, for example, if the DMO is able to set deposit levels, we will need to remove our 20p deposit from the Scottish scheme. There may be other conditions. For example, we have written into the regs the exclusion of producers who produce 5,000 or fewer of a particular line. Our exemption rules are in our regulations. If the UK Government has completely different ideas about all that, we would have to repeal it all. Rather than coming back to the Parliament repeatedly, we will wait to see what the UK Government puts into its regulations and, provided that it is in line with what we have agreed through the common framework and our negotiations, we will bring forward those regulations, so that you will have to see them only once and will not have to look at them over and over.

No, thank you, convener.

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.