A 20p deposit on a bottle of milk may sound like an unlikely source of constitutional conflict, but a disagreement about whether glass should be included in Scotland’s Deposit Return Scheme has sparked a significant debate about the state of devolution.
As with single-use plastics and precision-bred organisms, the UK Internal Market Act 2020 is once again at the heart of a dispute.
The Welsh Government has outlined its own plans for a deposit return scheme, which also includes glass, so what could this mean for Wales and what does it tell us about the current state of intergovernmental relations?
What is the UK Internal Market Act 2020?
The UK Internal Market Act became law in 2020. It was introduced by the UK Government to regulate the UK’s ‘internal market’ after Brexit but generated fierce debate about its impacts on devolved law. Both the Senedd and the Scottish Parliament refused consent for the Bill but it was passed by the UK Parliament.
The Act establishes the presumption that (in general) goods, services and professional qualifications that can be sold or recognised in one part of the UK should be able to be sold or recognised in any other part, regardless of what the law in that other part of the UK says.
Part 1 of the Act sets out the Market Access Principles of ‘Mutual Recognition’ and ‘Non-discrimination’ in relation to goods. This means that regulatory requirements on goods, or policies that may disadvantage incoming goods, in one part of the UK do not apply to products coming from (or directly imported into) other UK nations.
Exclusions can be agreed for certain products covered by a Common Framework, but only the UK Government has the power to make them.
Scotland’s Deposit Return Scheme
And this process to agree an exclusion is where this story begins.
The Scottish Government was due to launch the UK’s first Deposit Return Scheme (DRS) for drinks containers from July 2022 but the Covid-19 pandemic delayed the launch until 2023. The DRS would mean consumers pay a refundable deposit of 20p when they buy a single-use drinks container made of plastic, glass or steel/aluminium. The Welsh Government is working with the UK Government and the Northern Ireland Executive to set up compatible schemes, which are due to launch in 2025.
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Why does the UK Internal Market Act affect the DRS? The DRS could be affected by the market access principles of the UK Internal Market Act 2020 because it relates to the sale of goods. Both the Scottish and UK governments have indicated that the Scheme interacts with the Act but there are differing opinions about the extent of this interaction. This Scottish Parliament Information Centre article outlines the key issues relating to the interaction between the Act and a deposit return scheme. |
The Scottish Government says that it asked for an exclusion for the DRS from the UK Internal Market Act as part of a broad request made in 2021. An exclusion was only agreed on single-use plastics at that time so the Scottish Government considered the need for an exclusion for the DRS in October 2022.
Following an exchange of letters between the Scottish and UK governments about the need for an exclusion, a decision was expected at a meeting of the Interministerial Group for Environment, Food and Rural Affairs on 17 April 2023. When this decision was not forthcoming, the Scottish Government delayed the DRS’s launch until March 2024.
The UK Government announced on 27 May 2023 that it would agree to a temporary exclusion for Scotland’s DRS but crucially it would not include glass products. This would bring the scope of the DRS in line with the UK Government’s plans for England. The UK Government wants there to be “maximum alignment and interoperability between schemes” and stated that:
“The inclusion of glass would add cost and complexity to the schemes in particular to hospitality and retail sectors, as well as adding consumer inconvenience.”
After initially asking the UK Government to reconsider its decision, the Scottish Government announced that the DRS launch would be delayed until at least October 2025, which will align with the launch in the rest of the UK.
What does this tell us about the state of intergovernmental relations?
This dispute over the DRS is another sign of the tension between the UK Government and the devolved governments in Scotland and Wales. This is despite a new framework for intergovernmental relations being in place since January 2022.
The Scottish Government says that it followed the agreed process for requesting an exclusion through a common framework. Whilst this offers a route for the devolved governments to seek to exclude areas from the UK Internal Market Act, only the UK Ministers have the power to make exclusions.
This is the second time that the Scottish Government has not got the full exclusion it has asked for, after previously asking for a broad exclusion covering single-use plastic products but only getting a specific list instead.
The Welsh Government has raised concerns that additional processes are being added to seek an exclusion from the UK Internal Market Act outside the agreed Common Frameworks process.
What could this mean for Wales?
The Welsh Government has its own plans for a Deposit Return Scheme, but has been working with the UK Government and the Northern Ireland Executive to jointly launch schemes in 2025.
Unlike in those two nations, the Welsh Government wants the Welsh DRS to include glass. This means it is likely to face the same challenges as the Scottish Government unless an exclusion including glass is agreed.
The UK Government has said that it will continue to work closely with the Welsh Government to ensure that there is “full interoperability” between the schemes including with the materials that are in scope.
The First Minister, Mark Drakeford MS, has said that the Welsh Government will be considering the implications of the UK Government’s decision for the Welsh DRS. In response to Glenn Campbell, BBC Scotland’s political editor, the First Minister said:
“At the moment glass is in our [the Welsh Government’s] scheme and that’s the way we expect it to stay. […] I would dispute the use of the Internal Market Act for these purposes and if they were to invoke it, there would be very serious questions for the UK Government.”
The Minister for Climate Change, Julie James MS, has said the Welsh Government will continue to work on introducing its scheme, including glass, and will continue to pursue the intergovernmental mechanisms available to put its case forward.
What happens next?
Now that the Scottish Government has confirmed that the launch of its DRS will be delayed until 2025, businesses have said they will be seeking compensation for the investments they have made to prepare for the Scheme.
The Welsh Government has said that its plans to include glass in its DRS have not changed as a result of the UK Government’s decision. If the Welsh Government chooses to proceed with glass in its DRS, it is likely to continue the sense of uncertainty about the practical impact of the UK Internal Market Act on Welsh law.
Article by Josh Hayman, Senedd Research, Welsh Parliament
