Infected Blood Compensation Scheme

Baroness Finn Excerpts

Tuesday 4th November 2025 Lords Chamber

I am resolute that we get this right, and I hope the progress I have set out today shows that we are taking positive action and, crucially, listening to and making progress alongside the community. After all, those who have been so impacted by this horrendous scandal must be at the core of every decision we make, in government and across this House—they deserve no less. I commend this Statement to the House”.

[Baroness Finn (Con)]

My 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.

[Baroness Brinton (LD)]

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.