Contribution
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.