London and Edinburgh are heading for another constitutional clash as Rishi Sunak’s government prepares to thwart a controversial recycling scheme in Scotland.
The Scottish government’s scheme, which is due to launch in August, aims to encourage more recycling by adding a 20p deposit to single-use drinks cans and bottles. Consumers can reclaim the deposit by taking empty containers to thousands of “reverse vending machines” in supermarkets and other venues.
Sunak’s government fears the scheme would create a trade barrier between England and Scotland because it would involve different prices for the same product on either side of the border, which could contravene the UK Internal Market Act of 2020.
The British government is preparing to make a decision on whether to allow Scotland an exemption from the UK legislation for the scheme.
Alister Jack, Scotland secretary, said last month he had urged the Scottish government to “pause the scheme” and hinted he would not grant an exemption, which would render the scheme virtually unworkable.
“The exemption bar is very high indeed, otherwise what is the point of the [UK Internal Market Act]?” he told the House of Commons.
Jack is now in discussions with cabinet colleagues about the case for rejecting the request by the Scottish government for the exemption, according to allies.
The row over the proposed recycling scheme threatens to become the latest constitutional fight between London and Edinburgh, after Sunak’s government in January vetoed a Scottish law to make it easier for trans people to get legal recognition of their gender.
Nicola Sturgeon, Scotland’s outgoing first minister and leader of the Scottish National party, wrote on Twitter last month that if the British government did not exclude the scheme from the UK Internal Market Act it would confirm fears that the legislation would be used to undermine devolution.
All three candidates seeking to succeed Sturgeon have criticised the scheme, adding to uncertainty about its future.
At a meeting last week the Scottish government sought “urgent clarity” from London on whether the scheme will be exempted from the UK Internal Market act.
Edinburgh officials believe without an exclusion it would be hard to deliver a workable scheme, according to people briefed on the situation.
A Scottish government spokesperson said: “We expect a decision from the UK government as soon as possible given that this is what is needed to give industry absolute clarity.”
Although British ministers are minded not to provide the scheme with an exemption from the UK Internal Market Act, they believe one would be necessary for it to apply to the 85 per cent of beverages sold in Scotland that are made outside the country.
Lorna Slater, Scottish minister for green skills, said 664 producers responsible for more than 90 per cent of drinks containers sold in Scotland each year had already registered to participate in the recycling scheme.
Critics said the data presented by Slater was misleading as it reflected take-up by the biggest producers and masked the fact that smaller businesses had largely failed to register.
The Scottish drinks industry has warned the initiative will cut choice and disrupt trade, and has urged the ruling SNP to wait for the launch of a UK-wide recycling scheme.
Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, a trade body, said there was a “miasma” over the recycling scheme as businesses had unanswered questions on its compliance with UK legislation and wanted clarity on what Sturgeon’s successor would do.
Jamie Delap, Scottish director of the Society of Independent Brewers, another trade body, said the poor take-up by smaller businesses was an “indictment” on the scheme.
