AS I SEE IT: TERRY MURDEN says the recycling scheme fiasco may overshadow the Ferguson shipyard scandal
From the moment on 7 June when Lorna Slater announced to MSPs that the launch of the Scottish government’s deposit return scheme would be pushed back until the end of 2025 it was evident that somebody would be paying a high price for yet another Holyrood fiasco.
Within hours of the Circular Economy Minister’s admission of defeat to Westminster’s demands that no glass be included, David Harris, chief executive of the scheme’s administrator Circularity Scotland, said the organisation would be assessing the impact of the decision and “communicating with our people”.
With 50 staff left wondering what they were supposed to do for the next 18 months, it didn’t take a genius to work out what he meant. On Thursday, leaked emails confirmed that staff had been sent home. A freshly recruited, trained and ready-to-go team is now likely to be binned ahead of the recycling scheme they were preparing to manage.
At the same time, Ms Slater was fumbling her way through another embarrassing session in parliament, unable to tell a committee of MSPs how Circularity Scotland would survive. Her response was that it was funded by industry and therefore not directly the responsibility of the government.
It was a classic exercise in buck-passing. Who set up Circularity Scotland? Who encouraged investors and drinks companies to finance it? Her hope that the industry will continue paying the bills until the scheme starts overlooked the little matter of it earning no income in the meantime. A number of drinks groups have now said they will not continue to fund it.
This charade is now at risk of becoming a bigger scandal than the Ferguson ferries debacle. Bear in mind that the delayed and over-budget ferries contract is an internal Scottish affair that does not impinge on the rest of the UK. To that extent, it is a issue for the devolved government to resolve.
That is not the case with the DRS which impacts on broader plans for a UK-wide initiative and, more importantly, has implications for drinks producers and consumers beyond Scotland.
At least we now have launch dates for the two vessels, and while the taxpayer is picking up the tab, at least we have a degree of certainty over responsibility. The Scottish Government is making no such commitment to those who have invested an estimated £300 million to infrastructure and employing staff in preparation for the deposit return scheme whose start date now depends on the UK Government being ready to go ahead with a larger operation for England.
On top of that , there are questions around the £9m invested by the state-backed Scottish National Investment Bank, though this looks like being written off as a bad debt. More immediately, redundancy payments are looming for Circularity Scotland staff.
Beyond the financial and operational uncertainties around this scheme, including potential claims for compensation, it has become a focal point for the constitutional debate, not only because of the inability of the two governments to hold sensible negotiations on the best way forward, but because it reveals the practical difficulties of dismantling the UK’s economic and commercial infrastructure.
If the collapse of a bottle recycling scheme can create so much chaos and disruption to current Scotland-UK trading links just imagine what would happen if Scotland opts for independence.
It is one thing to argue for political independence [as is generally the case] but economic independence does not automatically follow. The UK has been an integrated economy that has evolved over 300 years with the same monetary system and a logistics industry that moves goods and services unimpeded around the kingdom. There are economies of scale and practical advantages for companies, regulators and customers working broadly to the same rule book. The collapse of the DRS exposes the reality of tearing it up.
AMTE Power needing a re-charge
Until this week AMTE Power, the battery manufacturer with a big plant in Thurso and even bigger plans for a factory in Dundee, has been forging ahead, signing deals and preparing to play a big role in the transition to electric vehicles.
Rather like the problems which beset its larger cousin BritishVolt, it now seems to be losing its charge and in danger of running out of cash.
It issued an alarming statement on Thursday, largely ignored by most of the Scottish business media, saying shareholders could be wiped out if talks with potential investors failed to provide new funds within four weeks.
Not surprisingly, its shares plummeted 75% and are now trading at about 12p against a flotation price in 2021 of 175p.
Hopefully, there is enough of a good story to persuade investors to back this company and its plans for Dundee where it hopes to make eight million battery cells per annum.
Aside from comparisons with BritishVolt, which was a setback for the UK’s battery capacity, we don’t want to see AMTE Power follows the example of Parsley Box, another Scottish company whose valuation fell to earth within months of a stock market flotation.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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