Sturgeon’s Government Accused of Misleading Firms on Green

Published: 25 October 2025. The English Chronicle Desk. The English Chronicle Online.

Nicola Sturgeon’s government has been accused of misleading businesses about its controversial deposit return scheme (DRS) in a court case that could cost Scottish taxpayers £166 million. A former Scottish secretary, Lord Alister Jack, told the Court of Session in Edinburgh that the SNP-Green administration withheld crucial commercial information from companies, putting them at financial risk before investing in the scheme.

The DRS was designed to boost recycling by imposing a 20p deposit on single-use drinks bottles and cans, which would be refunded upon return. However, Lord Jack claimed that ministers failed to inform businesses that the scheme could be blocked under the UK Internal Market Act (IMA) if glass bottles were included.

He described a May 2022 letter from Green minister Lorna Slater, responsible for the scheme, as falling short of “telling companies the whole story.” Lord Jack said he was “appalled” that businesses were given assurances without being warned about the high commercial risks, which were known to the Scottish government months before.

“The Scottish government had been informed that an exemption would be needed under the Internal Market Act if it wanted to include glass bottles,” Lord Jack said. “There was a high bar for this exemption, yet nothing was done to warn businesses prior to formally applying in March 2023.”

The UK government later granted a conditional exemption but ruled that glass bottles could not be included, prompting the DRS’s delay after Humza Yousaf replaced Sturgeon as first minister. Biffa, the UK waste management company appointed to collect recycled containers under a ten-year deal, is suing the Scottish government for £166 million. The claim includes £115 million in projected profits lost due to the delay and complications.

Biffa had relied on assurances from the Scottish government that the scheme would proceed, expecting to make more than £100 million in profits from recycling operations across Scotland. The court heard that the company invested heavily based on these representations and is seeking compensation for losses caused by what it claims were “negligent misrepresentations.”

The scheme would have required all outlets selling takeaway drinks to act as return collection points, with reverse vending machines installed in supermarkets, community centres, and other public spaces. Ministers argued that the DRS would significantly increase recycling rates and reduce environmental waste. However, concerns over commercial risk and the potential cost to consumers were raised during its planning.

Lord Jack, who served as Scottish secretary when the UK government refused the IMA exemption for glass bottles, described the administration’s approach as “utterly irresponsible.” Referring to the May 2022 letter, he told the court: “I am staggered that a letter was produced by officials, signed by a minister, and sent out to companies investing their shareholders’ money – lots of it – without knowing the inherent risks of the whole picture.”

He added: “It was, for me, irresponsible not to tell companies what the full story was and to explain the risks. There was a high level of risk, and it was utterly irresponsible to send this letter.” According to Lord Jack, more than 1,000 businesses and stakeholders had raised concerns about the scheme’s impact on operations, including supermarkets warning it could harm business and consumers.

The former Tory MP dismissed suggestions that his concerns were politically motivated, insisting it was his duty to protect businesses and consumers from potential harm. “It was beholden on me as Scottish secretary to ensure our businesses and our consumers were protected,” he said.

Lord Jack also criticised the Scottish government for applying for the IMA exemption in 2023 while still finalising how the scheme would operate. “It was farcical, a comedy of errors,” he said. “The whole thing was farcical.”

Lorna Slater, the Green minister, has previously accused Lord Jack of an “act of sabotage” following the collapse of the scheme. During the court proceedings, she told judges that Biffa had been invited to raise any questions and that internal market rules were only one of several potential risks to the scheme. She maintained that the government was committed to resolving these challenges.

“There was no reason at all to expect the UK government to block the scheme,” Slater said. “In fact, it was in their interest to support it as a pilot, so lessons could be learned for the rest of the UK. It wouldn’t make sense to hinder Scotland’s DRS when all nations were moving in the same direction.”

The case has highlighted tensions between Scottish ministers and UK government authorities over environmental policy and commercial accountability. The deposit return scheme, a flagship green initiative for the SNP-Green administration, has been positioned as a means of improving recycling infrastructure while creating economic opportunities for companies involved in collection and processing.

However, the delays and legal complications have had a significant financial impact. Biffa’s legal claim emphasizes the tangible economic consequences of governmental miscommunication, with millions of pounds in lost profits at stake. Experts note that the outcome of the case could set a precedent for how governments communicate commercial risks to private firms when implementing environmentally driven policies.

Court documents reveal that the DRS, if fully implemented, would have required extensive infrastructure, including reverse vending machines and collection points, to make the scheme operational. Biffa’s anticipated profits were tied to the long-term collection and processing of returned containers. The company argues that it would have been able to meet these obligations if it had been given accurate and complete information about regulatory risks.

The case also raises questions about ministerial accountability and transparency, particularly when public policies affect private sector investments. Legal analysts suggest that if Biffa’s claim is successful, it could result in one of the most expensive cases of governmental miscommunication in Scotland’s recent history, with taxpayers potentially footing a £166 million bill.

Observers point out that the controversy comes amid broader debates over Scotland’s environmental policies and the SNP-Green administration’s approach to implementing ambitious green initiatives. While the DRS was aimed at addressing plastic and aluminium waste, its execution demonstrates the challenges of aligning environmental objectives with commercial certainty and regulatory compliance.

As the court case unfolds, attention is likely to focus on the balance between government innovation in green policy and the responsibilities owed to businesses making substantial investments based on official assurances. The outcome may influence future schemes, with an emphasis on ensuring that commercial partners are fully informed of potential regulatory obstacles before committing resources.

Biffa’s claim underscores the financial stakes involved in government-backed environmental projects and highlights the need for clear communication and risk management when launching large-scale initiatives. For taxpayers, the case could signal a costly lesson in the consequences of mismanagement and miscommunication.

With the DRS now delayed until at least 2027, Scottish businesses and consumers are left navigating uncertainty over how and when the scheme will operate. The legal proceedings will not only determine compensation but could shape the approach to environmental policy implementation in Scotland and across the UK.