(1 day, 10 hours ago)
Lords ChamberMy Lords, the report of the Infected Blood Inquiry described this tragedy as
“the worst treatment disaster in the history of the NHS”.
Noble Lords across the House and Members in the other place have spoken time and again of the unimaginable suffering endured by those affected. There can be no doubt that this scandal represents a profound and repeated failure by the state, medical professionals and national institutions.
We should never lose sight of the fact that what we call the scandal was, in truth, the infliction, collectively, of grievous harm upon thousands of people by the state. It is now our solemn duty to ensure that such mistakes are never repeated, and that justice is delivered swiftly, fairly and fully to all who were affected. In that spirit, I thank the Minister for her continued time and engagement across the House.
I pay tribute to the work of Sir Brian Langstaff, the chair of the Infected Blood Inquiry. Earlier this year, that inquiry warned that there has been
“a repetition of the mistakes of the past”,
and that people have been “harmed yet further” since the establishment of the compensation scheme. Sir Brian concluded that the number of people compensated to date is “profoundly unsatisfactory” and has called for faster and fairer delivery of redress. The campaign group Tainted Blood estimates that at least 100 people have died while waiting for compensation since the inquiry’s final report last year, and Sir Brian has warned:
“Delay creates an injustice all of its own”.
We welcome the measures announced to implement some of Sir Brian’s recommendations, such as the HIV eligibility start dates and bereaved partner support scheme payments. The Minister confirmed that, as of 21 October, 2,476 people have received an offer of compensation and over £1.35 billion has been paid. However, as the BBC has reported, as many as 140,000 bereaved parents, children and siblings of victims may also be able to claim compensation, and the Government have set aside £11.8 billion to pay compensation to victims.
There is evidently still a great deal of work to be done to ensure that the Infected Blood Compensation Authority—IBCA—can scale up quickly and make payments to affected people, who will clearly be far larger in number for IBCA to deal with.
In recent weeks, further concerns have emerged that delays in paying compensation risk undermining one of the core principles of the scheme: how it is, or rather is not, taxed. Under the present arrangements, compensation received by a victim can be passed to their children free from inheritance tax. But for the thousands who have died before receiving payment, those sums will now pass through their estates to bereaved relatives, many of whom are themselves elderly. If they, too, die before receiving the funds, their families could face handing back almost 40% of that compensation to the state in inheritance tax.
A statement from the Association of Lifetime Lawyers says
“it is an outrage that a technical flaw will allow the Government to claw back up to 40 per cent of the compensation that was specifically intended to provide some redress”.
The Government have said that they are committed to making the system as fair and compassionate as possible and will continue to engage with victims and their families. I therefore urge the Minister to assure the House that the Government are aware of this problem and that they are looking into possible solutions.
As was noted in the other place, £140 million has now been spent on this inquiry after six years, and that figure will be greater once the accounts for this year have been released. The Minister in the other place said that he thinks we are now in an “exponential phase” where the scale of payments being made through IBCA is increasing. However, the concern is that we are stuck in this test-and-learn phase of delivery.
The mechanism for scaling up payments has been too slow and the reliance on repeated rounds of inquiries and tranches of recommendations has prevented swift action and compensation being delivered. It is right that we proceed with care and consideration, but we must not lose sight of the pressing need to deliver this process swiftly. The Government must strike a balance between acting responsibly and acting quickly. My right honourable friend John Glen made the point that we now need to
“focus on the delivery of IBCA, rather than have more iterations of recommendations”.—[Official Report, Commons, 30/10/25; col. 520.]
He is absolutely right. I therefore ask the Minister to ensure that the scaling-up process proceeds with the urgency that this situation so clearly demands.
Before I conclude my remarks, I have some further questions for the Minister. First, can the Minister confirm the Government’s current timetable for making full compensation payments to victims and families yet to receive them and whether that timetable remains consistent with Sir Brian Langstaff’s call for faster and fairer redress?
Secondly, what steps are IBCA and the Government taking to identify those individuals who are potentially recipients of compensation under the scheme and who may also be sick or elderly and are, as such, deserving of prioritisation in the processing of their claims?
Thirdly, will the Government commit to taking, as a matter of urgency, immediate steps to ensure that all infected blood compensation payments, whether made directly to victims or through estates, are entirely exempt from inheritance tax, regardless of the circumstances or timing of payment? In that vein, can the Minister confirm whether the Treasury has undertaken any assessment of the number of families likely to be affected by this tax anomaly and of the potential sums at stake if it is not corrected?
Fourthly, what action is the Minister taking with IBCA to ensure that the pace of payments, which has seen some welcome progress, continues to accelerate and is not jeopardised by changes to rules and processes? Can she confirm that IBCA has the right capability to scale up and that the staff are receiving the right training to deliver?
Fifthly and finally, can the Minister confirm when the recommendations from the proposed changes to the infected blood compensation scheme consultation will be implemented? I am aware that the consultation period ends in January, so when can we expect the practical implementation of these recommendations to be forthcoming?
The victims and their families have already been failed profoundly by the state. It is now our duty and our responsibility to make sure that there is no further injustice. Addressing the questions we have raised around delays, taxation, and the scalability of the system is imperative. I hope that the Minister can assure us that the Government are taking immediate steps to resolve these issues.
My Lords, I thank all the infected and affected victims who have been in touch with me and other noble Lords in the last few weeks, not least since the consultation started and the independent review of the workings of IBCA was published. They are living the consequences of the scandal that the noble Baroness, Lady Finn, outlined at the beginning of her contribution, and the problem is that any delays or problems in the scheme retraumatise and revictimise them. Although I am grateful that the Government have been tackling some of the issues, there are still many outstanding; and while the numbers of those registering claims and receiving offers have begun to improve since we last met, there remain real concerns about the slowness of the deceased claims.
The phrase used is “to start by December 2025”, but that is a somewhat woolly timescale; it should not just be about starting. When is it expected that the claims process will be up and running at pace—a favourite phase of the Cabinet Office? Also, understanding that one has to use, test and learn in each different part of the compensation process, can the Minister say when things will be speeded up? It may be too early to ask if there is an end date in sight, but even an end year in sight for deceased claims would be very welcome.
Victims and groups have referred IBCA and the processes to the Public Administration and Constitutional Affairs Committee in the House of Commons, so will both IBCA and the Cabinet Office co-operate fully with any requests for evidence that that Committee might seek?
I want to thank the Government for increasing transparency. We have over many years in your Lordships’ House been concerned about some of the secrecy about arrangements. A lot of this goes back 50 years, to when doctors were not very clear about their own arrangements and there certainly was no paperwork. But it is good that the names of the expert group and the minutes of its meetings are now published, and I hope there will continue to be more transparency about the arrangements.
I have a specific query about the arrangements for the assessment of severe mental health continuous treatment. Apparently, the Government are insisting on six months of continuous treatment as the benchmark, to justify the supplementary routes for mental health, but the NHS offers continuous treatment for only 20-week periods because there just are not enough counsellors and psychiatrists available to go round. As a result, there are inevitably gaps in treatment in order that other people can also be treated. To the victims, this feels like a barrier that none of them can get past. I wonder if the Minister could look at that problem.
There are concerns about the processing of deceased claims. I see that there is a proposal to have the first claim started. The victims continue to be very concerned about the Treasury and HMRC’s stance on inheritance tax, as the noble Baroness, Lady Finn, outlined. The Society of Trust and Estate Practitioners and the Association of Lifetime Lawyers have written a letter to the Chancellor of the Exchequer, copied to the Paymaster-General, to point out that in their discussions with HMRC over the additional report on compensation, which Sir Brian Langstaff published earlier this year, they remain particularly concerned about this payment. The issue is that the Government have confirmed that compensation payments should be free from income tax, capital gains tax and inheritance tax, but, unfortunately, because of the way IHT operates, this principle is not being upheld consistently.
Here, there are three points. Where the infected or affected persons are alive when compensation is paid, they get a tax credit to ensure the sums are not later taxed in their estate. But where the victims or their loved ones have sadly died before receiving compensation, the payments flow through their estates without the benefits of such a credit. Their beneficiaries can therefore face IHT charges—in some cases at 40%—on compensation specifically designed to provide redress for a heinous act by many Governments over many years.
This so-called secondary transfer problem is particularly acute where compensation first passes to a surviving spouse or civil partner and then on to children or other relatives. In such cases, significant proportions of compensation are lost to tax. Throughout the inquiry, the last Government, and indeed this Government, made it clear that past benefits would not be called back out of settlement money. Surely the same must be true for the Treasury and HMRC. It would be iniquitous for an infected person to die, their settlement passing to their widow, who dies, say, within a month, but then anything passed on to their children is severely taxed. What is different about infected blood to a general principle on IHT is that entire families are badly affected by the experience of their loved one. This is not just in medical terms; we have to remember that they were also shunned in their communities, particularly those who had AIDS, losing homes and jobs because of ill health. It would be awful to punish them through that taxation.
Will the Minister agree to a meeting with Treasury to discuss this issue? It is not a good look for Treasury to give billions with one hand and then claw back with the other. I thank the Minister for the Statement and hope she will continue to keep your Lordships’ House informed of the progress and issues in the weeks to come, including the regulations that we will look at very shortly.
My Lords, I am, as ever, very grateful to the noble Baronesses for the thoughtful and productive points raised on this issue. It is very easy for Members of your Lordships’ House to get caught up in the politics of many issues, but on the issue of infected blood this has genuinely been a cross-party and cross-House approach, and I hope we will continue to adopt that theme. At the heart of everything that we are trying to do is to support the victims of one of the most heinous experiences the state has ever undertaken. We need to fix it, not only for them but also, as a Member of your Lordships’ House reminded us last time, to ensure that wider society can have faith that the state can be a force for good. I truly believe that it can.
I truly believe that, since I last updated the House in July, significant progress has been made. This demonstrates that we are committed to moving forward swiftly, and with the community at the front and centre of what we are doing. In other contexts, the noble Baroness, Lady Finn, and I have interesting discussions about the concept of test and learn. But truly, if we think about what we are trying to do, it is to compensate many thousands of people with up to £11.8 billion—although that is not a target or a goal, but the amount allocated currently. We are trying to get money out the door as quickly as possible to the people who need it. Test and learn has been an appropriate way to do that, to make sure that taxpayers’ money gets out to the people who need it as quickly as possible and at the appropriate speed.
I would like to respond to the points raised by the noble Baronesses. As ever, if I have missed something—and I and pretty sure I will have—I will write. First, both noble Baronesses raised the issue of inheritance tax, which was obviously a theme of discussions in the other place. It may be helpful to clarify exactly where we are. Anyone in direct receipt of compensation from IBCA or who is a beneficiary of an estate of a deceased infected person does not need to pay inheritance tax. Inheritance tax relief is applied, as the noble Baroness, Lady Brinton, said, to the estate of the person who received the compensation, whether they received it as an infected person or an affected person. Under HMRC regulations, the inheritance tax on that person’s estate is reduced so that the amount of compensation received is effectively free of any inheritance tax when it passes to the estate beneficiaries.
However, once the compensation has passed to the beneficiaries, it is treated the same for inheritance tax purposes as any other money or property they own; the relief does not apply again—for example, when the beneficiaries themselves die. Where compensation is paid to a person who has been affected or infected and that person then dies, the inheritance tax which would otherwise be payable in respect of their estate is relieved. It does not matter who the beneficiary of that estate is, the inheritance tax relief applies. However, once the money is received by that beneficiary, inheritance tax applies as normal. To put it as simply as possible, the relief will apply to the estate of the person who is being directly compensated, whether that person is infected, affected, living or, sadly, passed away.
Having said that, I appreciate the strength of feeling in your Lordships’ House, and having reflected on Hansard, we are listening. I will seek to arrange the meeting with Treasury officials—I am about to make myself very popular with the Treasury—to discuss this issue. We will see if my noble friend Lord Livermore is still speaking to me by the end of the day. There is also the Budget coming, so we may have to wait a little bit, but I will endeavour to answer noble Lords.
On the consultation and timing, the consultation will run for 12 weeks, to 26 January. We will publish a response to the consultation on GOV.UK within 12 weeks of its closing. Regulations to make changes to the scheme as a result of the consultation will be brought forward next year.
This is a genuine consultation, not a tick-box exercise. Many recommendations have been made by our technical experts that offer us a range of options within the tariff-based system that we will seek to apply. We should always listen to those people who are affected, but we especially need to make sure that we get this right for the infected blood community. This is truly about making sure that we get the answers needed.
Both noble Baronesses raised points about the effectiveness of IBCA. Noble Lords may be aware that on Thursday last week we published a review by Sir Tyrone Urch that we had commissioned in August, reviewing the effectiveness of IBCA to make sure that it was able to take us forward to the next stages as quickly as possible. He has made a series of recommendations, which we published only last week, and now we are looking, with IBCA, to see who is appropriate to take them forward—noble Lords will be aware that they focus on three issues: stability, resources and digital systems—to make sure that we have the opportunity to move forward.
A matter of weeks ago, I visited IBCA to make sure that I was confident in its ability to take steps forward. That option is available to all Members of your Lordships’ House, and for those who are interested I highly recommend taking a trip to Newcastle to meet IBCA. It was an extraordinary experience, on which I am sure I will reflect more during these questions.
I would like to reassure noble Lords about the ability of the staff at IBCA to move forward. IBCA now employs 329 dedicated claim managers who support people with their claims from start to finish. All claim managers are fully trained and complete a three-week training programme, which includes working with a clinical psychologist to undertake trauma-informed training to ensure that claim managers work compassionately with the community. They are extraordinary people; when I met one of them, he said: “Other than the National Lottery, I get to make someone a millionaire every day by working at IBCA”. By the time he has ensured that the payment is in their bank account, he knows the family well. If any part of this can be joyful, that part is.
On delivery, all registered infected have been contacted to claim by October; for the unregistered infected, the first claims begin in November; and affected and infected estates will begin by the end of the year. I appreciate that the noble Baroness is concerned about when we will pay, and for the overwhelming majority the answer is by the end of 2027.
I have an answer, although time is short, about the issue of severe psychological harm and the six months of support. I will write to noble Baroness, but I assure her that this is about not counselling but psychiatric treatment. A day as an in-patient qualifies you, not six months, but there is a severity, and currently part of the consultation is about how we will pay that. I will reflect on everything else that has been said.
Not only was I overwhelmed by the expertise and professionalism of the people I met when I visited IBCA earlier this year but I want to give special mention to IBCA’s three user consultants, as they are called, who are members of the infected blood community themselves. Jason Evans, Clair Walton and Susan Harris advise IBCA on how its processes and plans can be focused on the needs of those who will be applying for compensation. Given their personal experiences and how easy it would have been for them to walk away, the fact that they are helping us to fix it is extraordinary, and I put on record my huge admiration for them. I will reflect on any points that I have missed and write to the noble Baronesses.
My Lords, I am most grateful to the Minister for having met me, and to the noble Baroness, Lady Campbell of Surbiton, with whom I discussed the Statement yesterday.
The Minister has spoken about claim managers now being trained and directly employed. I wonder if she has evidence that trust has increased and of how the claim managers are managing when there is difficulty accessing medical records, particularly if the microfiched records cannot be found easily or if there are gaps in the whole medical history.
A separate question, but equally important, is how claim managers and others are able to provide advice to recipients who may wish to be protected from it being known that they have compensation because they need advice on how to manage the payments they receive. Sadly, they may be fearful of pressures put on them, either within their own families or within the community, when it is known that they have received a large sum of money in compensation, because there is sometimes inadequate understanding of what the compensation has actually been for.
I put on record my thanks to the noble Baronesses, Lady Finlay and—I think I can call her a noble friend, even though she is not on my Benches—Lady Campbell, who is much missed; I am pleased that she will be returning to us in the new year. As ever, the noble Baroness, Lady Finlay, raises very important points. I think trust has increased, but that is difficult to tell in an environment where misinformation is rife; making sure that people have access to genuine information is truly one of the most challenging parts of this. We have discussed in your Lordships’ House many times the ability of IBCA to communicate and the need to make sure that it is providing relevant information.
That said, the claim managers have played an incredibly important role. We are seeing that when claims are finished—obviously this is a small community, relatively speaking—people are asking the claim managers who have just finished with them if they will be the claim manager for their friends, or for other members of the community, by name. This suggests that trust in the claim managers, at least, is clear, which is an important part of this.
The noble Baroness makes two incredibly important points. One is about access to medical records. Our claim managers are not investigators but, where there is clearly paperwork missing, they are working with the recipients to help them find the paperwork; so the onus is not just on the members of the infected blood community—there is someone helping them get the paperwork. We still have challenges in making sure that we can access some of the medical records. Noble Lords will appreciate that, as we move forward away from registered infected cases and towards estates and other areas, that may well be challenging, but we are working on what new technologies we can use to harness some of that material.
As regards advice to recipients who want to be protected, we are offering paid financial advice to make sure that it is easily accessed. We have to appreciate that these are very vulnerable people who have had horrendous experiences and could be targeted again, so making sure that we can work to protect them will be an incredibly important part of what we do going forward.
My Lords, I feel that I am a veteran of this issue, like many other Members of your Lordships’ House. Indeed, I was a Health Minister in 2009 and 2010, and I think that might have been the first time I had a huge row with civil servants because they would not let me say sorry. That is something that featured through many Administrations, with great shame. I was on the Opposition Benches when we came to agreeing the amendments, and thus finally agreed the scheme that we see before us today. I congratulate my Government on finding the funding to be as generous as possible in this compensation scheme.
I want to ask my noble friend the Minister about transparency, how that has been built into what happens next and, indeed, the wider lessons that need to be learned from the way in which the scheme has been constructed, as well as other issues that might arise in the future and that will need this kind of attention.
I thank my noble friend for her work in getting us to this point. We put on record our thanks to her, the noble Earl, Lord Howe, and the noble Baroness, Lady Brinton, as the leading negotiators making sure we got to this point. My noble friend was not allowed to say sorry, but I can say sorry to those people who have been affected by this. I get to do that because of the fights that she had. For that, I am grateful; I do not have to have so many fights with my civil servants.
With regard to transparency, noble Lords will appreciate that we are talking about a cohort of people who have been affected by infected blood and who have no trust. Rightly, there is no reservoir of good will. We have to be as transparent and open as we possibly can to make sure that they know what is happening, why it is happening, at what speed and in what process. While the speed may be a challenge, we have to make sure that it is in place.
One thing that I have not said yet but wanted to put on record is that, as of 1 October, staff at IBCA are now directly employed and are no longer seconded civil servants. They are now public servants who work for IBCA. I think that helps lead to transparency of and trust in IBCA. In addition to the fact that we publish everything—the reviews are making sure that we are able to do that, including transparent publication in relation to the technical meeting group—everything we are doing is trying to rebuild trust with that community.
My Lords, I listened to the Minister carefully with regard to inheritance tax. I am sure that she will agree that for those who are affected by this scandal, it will be generational rather than just stop at the end of the life of the person who was infected. Let me give an example of the generational issues: a child of somebody who was infected has been affected, and that may pass down to their children in terms of them not having a full education or not being able to work fully in light of the issue they were dealing with in respect of their parents. What would the Minister say to citizens and individuals who have been affected, where it goes to their children’s children, and they may have to pay inheritance tax? What can the Government do in terms of speaking to the Treasury to ensure generational fairness as well as fairness for those who have been infected when it comes to inheritance tax?
I truly appreciate the strength of feeling in your Lordships’ House about this issue. I have said as much as I can without getting myself into even more trouble, but what I will say is that it is a fair point. Noble Lords will be aware that I also talk about issues pertaining to Northern Ireland and legacy, intergenerational trauma and making sure that we have the right support structures in place and the right answers for people so that they can perhaps turn the page—I do not know if they can ever shut the book—on what happened to them and move forward. While I appreciate noble Lords and I have probably already got myself in trouble with my colleagues in the Treasury, I have heard and will continue to listen to noble Lords’ contributions on this issue.