The following Statement was made in the House of Commons on Thursday 30 October.
“With permission, Madam Deputy Speaker, I will update the House on the Government’s progress in establishing an infected blood compensation scheme.
In July, the Infected Blood Inquiry published its additional report, which made a number of recommendations on ways that the compensation scheme could be amended to achieve a scheme that works better for all infected and affected people. I updated the House then to confirm that the Government were responding positively and that we would bring forward legislation as soon as we could to address the recommendations that we could implement immediately.
The regulations that I am laying before the House today will achieve a number of those changes and demonstrate this Government’s commitment to responding swiftly and constructively to the inquiry’s recommendations. Specifically, the regulations respond to five of the inquiry’s recommendations by: removing the HIV eligibility start date; removing the minimum earnings threshold for a person to claim the exceptional financial loss award; removing the requirement for evidence of the date of diagnosis of hepatitis B or C; making changes to the deeming provisions for the severity of hepatitis C; and expanding eligibility to include estates of all affected people who have died between 21 May 2024 and 31 March 2031, which actually goes further than the inquiry’s recommended date range.
The regulations also put back the transfer of responsibility to make support scheme payments from the infected blood support schemes to the Infected Blood Compensation Authority—IBCA—by one calendar year. That means that IBCA will begin making phased support scheme payments from January to March 2027. IBCA requested that change to allow it to concentrate on accelerating the delivery of compensation and expanding the service to all eligible groups this year, while ensuring—this is essential—that there is no disruption to those receiving support scheme payments. There will of course be a separate opportunity for the House to debate these regulations in fuller detail before they are approved, and I look forward to that debate.
I would also like to inform the House that we have implemented the inquiry’s recommendation to reinstate support scheme payments to partners bereaved after 31 March this year until they have received compensation. Applications for those individuals reopened on 22 October, and I am grateful to colleagues across the devolved Administrations and the support schemes for the collaborative approach to making that happen.
Today I am launching a public consultation on proposed changes to the infected blood compensation scheme, as recommended by the inquiry. I encourage responses from the infected blood community and from all those with an interest in the infected blood inquiry. I assure honourable Members that every response will be considered carefully.
The consultation sets out questions across seven specific issues: harm caused by interferon treatment; the special category mechanism and its equivalents; severe psychological harm; past financial loss and past care; evidence requirements for exceptional loss; supplementary awards for affected people; and unethical research. The Government have sought initial advice from an infected blood compensation scheme technical expert group to develop proposals on those topics in response to the inquiry’s additional report for this public consultation. The feedback we receive through that consultation will inform the decisions that the Government take. The technical expert group will also take part in targeted engagement with the community.
I previously gave the House an undertaking that transparency would be at the heart of any expert group going forward. That is why the five additional members who have been appointed to the technical expert group were appointed following valuable feedback from infected blood community stakeholders, and it is why I am today publishing the minutes of the group’s meetings that have taken place so far. I look forward to hearing the views of the community within the consultation process and beyond as we work together to ensure that the Government’s response meets expectations. We will publish a response to the consultation on GOV.UK within 12 weeks of it closing. As I set out in July, we will also need to bring forward further regulations next year to implement changes following the outcome of the consultation. Listening to and working with the infected blood community is essential to ensure a compensation scheme that works for everyone, and I am hopeful that this consultation will allow us to do just that.
I turn to the delivery of the compensation scheme as it currently stands. IBCA has made significant progress in the delivery of compensation. As of 21 October, 2,476 people have received an offer of compensation, and over £1.35 billion has been paid. Last month, IBCA reached the significant milestone of having paid out over £1 billion in compensation, which I am sure the House will agree is welcome and notable progress in the delivery of compensation. I can also tell the House that offers totalling over £1.8 billion have now been made.
As of the end of September, all infected people registered with a support scheme have been contacted to begin their claim, and IBCA has set out its intention to open to unregistered infected people in November. In order to open, IBCA must build a service that allows it to confirm an infection before a claim begins, check the identity of each person claiming, and ensure that all the necessary legal and financial support is in place for anyone who wishes to use it. This approach, which IBCA also took with the first group of people making a claim, means that the numbers will initially be lower. However, I expect that—as with the first group—those numbers will rise exponentially as progress is made.
Earlier this month, IBCA also launched a registration service for people who intend to make a claim to register their details. As of 21 October, it has received 10,573 registrations of intent to make a compensation claim. To be clear, that figure represents all registrations, not unique people or claims. Those registrations will be particularly helpful in identifying the unregistered infected people for the next group, and indeed more as the service grows.
As Members of the House are aware from my previous statements on this matter, IBCA is an independent arm’s-length body, and it is vital that we respect that independence while also ensuring that I do what I can to drive progress forward. That is why in July I asked for an independent review of IBCA’s delivery of the scheme. That review, led by Sir Tyrone Urch, began in August and concluded earlier this month. I am today publishing that review and have deposited a copy in the Libraries of both Houses. The report notes that IBCA has made ‘substantial early progress’ towards delivering compensation to victims of infected blood, but it also makes recommendations to aid the scaling-up of operations and the delivery of compensation to complex cohorts. I will, of course, consider all those recommendations carefully.
Alongside IBCA’s delivery of the compensation scheme, the Government have continued to make progress on interim payments. In July I informed the House that we would make a further interim payment of £210,000 to the estates of infected persons who were registered with an infected blood support scheme or predecessor scheme and have, sadly, passed away, in addition to the interim payments of £100,000 that opened for applications in October 2024. I am pleased that applications for those payments opened last week, meaning that some estates could now be eligible for up to £310,000 in interim payments.
Since applications for the initial interim payments opened last year, over 600 estates have received payments, totalling over £60 million. That is in addition to the £1.2 billion that the Government have paid in interim compensation more widely. I hope that this additional interim payment brings some temporary relief to the families impacted, and I also hope that IBCA’s intention to begin the first claims on behalf of estates of deceased infected people by the end of this year provides some reassurance.
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”.
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.
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.
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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.
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.