Government accused of delaying infected blood payouts to make room for tax cuts

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MPs and campaigners have accused the government of a “shameful” attempt to delay payments to victims of the infected blood scandal to give itself “fiscal wriggle room” for tax cuts in the Budget.

Dame Diana Johnson, Labour MP for Kingston upon Hull North, who has fought for justice for victims of the scandal, accused officials of “dragging their feet” over compensation.

Ministers have privately said they expect the compensation bill could be between £10bn-£20bn, a cost that could have further limited chancellor Jeremy Hunt’s scope for tax cuts had it crystallised before the March 6 Budget.

Johnson called on Hunt to make a provision in the Budget for payments to the thousands of bereaved family members of victims who have not yet received money, adding that it was “shameful” he had not committed to doing so.

“I just don’t think the political will is there,” Johnson said.

Contaminated blood left tens of thousands of people — many suffering from haemophilia, a rare blood disorder — infected with HIV and hepatitis C in the 1970s and 1980s. About 1,250 people are thought to have contracted HIV, of whom three-quarters had died by 2020, according to the inquiry. 

The government has committed to making a statement in response to the findings of the final report on the scandal, expected in May, within 25 sitting days of parliament.

Government officials have privately expressed relief that the compensation bill will not become a problem until after the Budget, when Hunt is hoping to deliver pre-election tax cuts.

Johnson’s criticism comes after the government was accused by a former Post Office chair of delaying payments to victims of the Horizon IT scandal. Henry Staunton said earlier this month that he had been told by an official to halt requests for funding, which the government has strenuously denied.

Treasury officials acknowledged that the cost of compensation will be reflected in the Office for Budget Responsibility’s forecasts at the time of the next Autumn Statement — creating a headache for whoever is chancellor at the time. 

Prime Minister Rishi Sunak has yet to set a date for the general election but Hunt has prepared his Budget as if it is the last fiscal event before polling day, according to Treasury insiders.

One Conservative official said the prospect of a Tory chancellor having to confront the bill for the blood compensation scheme was another reason for not holding another fiscal event before the election: “I don’t think we’ll be holding an Autumn Statement,” they said.

Dr Philippa Whitford, a Scottish National party MP who has lobbied for bereaved family members to receive compensation, said she believed “the government is trying to drag it out until after the general election and then it’s a problem for another party.

“The community often feel that the government is waiting for them to die,” she said.

Sir Brian Langstaff, chair of the public inquiry into the scandal, urged the government in April to establish an arms-length body to oversee compensation payments.

He recommended £100,000 be offered swiftly to bereaved family members and victims who had not yet received any payment. Eighty victims have died since he made his recommendations.

Jason Evans, founder of Factor 8, a campaign group, said that compensation to roughly 2,000 bereaved relatives “should be included in the spring Budget”, noting that it would cost the government no more than £200mn.

Evans accused the government of stalling on payments until “right before the summer recess” to “give themselves more fiscal wriggle room”, claiming that in the end it would become “Labour’s problem”.

Sunak on Wednesday reminded MPs that the government has accepted the “moral case” for compensation.

Some of the thousands of people who were infected and bereaved spouses have received £100,000 in interim payments, totalling about £440mn. But thousands of other relatives of deceased victims have received nothing. 

Government officials said the final amount of compensation paid depended on how the scheme is set up and the number of “affected” people.

They denied that ministers had dragged their feet, arguing that they were right to wait until the final report is published.

The government said: “We are clear that justice needs to be delivered for the victims and have already accepted the moral case for compensation.

“The government intends to respond in full to Sir Brian’s recommendations for wider compensation following the publication of the inquiry’s final report,” it added.

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