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Lord Jenkin of Roding: My Lords, I thank the Minister for giving way. I have the impression that he is moving to a close. I asked him about the renewable

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obligation certificate buy-out fund, which at present is 20 million short because of TXU. I hope that I shall receive an answer.

Lord Whitty: My Lords, perhaps I may return to that just before I finish. I shall give an answer. The point I was making is that both the security and diversity of supply are issues which are clearly part of our energy strategy. The fact that they are not explicitly in the Bill is not the relevant factor. The other aspect of security of supply is the vulnerability of our supply areas to unrest or terrorist activity. In respect of that, clearly most forms of energy are potentially vulnerable. Slightly contrary to the comments of my noble friend Lord Lea, a nuclear facility probably potentially would be the most lethal, were there to be a terrorist incident. However, all forms of energy are subject to that kind of disruption whether we refer to offshore wind farms, the pipeline through the Caucasus or gas supplies from Algeria. However, one has to say that already in Europe we obtain gas supplies from Russia and Algeria, which are normally regarded as highly volatile countries, and the supply has not been disrupted.

Another general point to mention is that of the margins on which we are operating. There have been exaggerated views of the margins on which the current national network operates. The noble Lord, Lord Bridges, suggested that it was as low as 10 per cent. I can reassure noble Lords that the generation plant margin for this winter is likely to be more than 20 per cent; in fact, 20.3 per cent, which is double the figure that he gave and which I have heard people outside this House give. It could rise higher than that if we find it necessary to bring further mothballed plant into service. That margin is as good as it has been for the past few decades and is sufficient to meet predicted demand in all but very exceptional circumstances or catastrophic technological failure. I shall not go further into the wider issues.

I return to the question raised by the noble Lord, Lord Jenkin, of the 20 million shortfall. I am happy to tell noble Lords that in the past few days the administrator of TXU has written to all the relevant suppliers asking them to submit claims for their losses arising out of that shortfall. It looks as if there will be an interim payment of between 35 and 40 pence in the pound with the prospect of more to come once TXU's affairs are fully settled. So, although clearly this is an unfortunate position, there will be recompense for those who missed out as a result of that. The context in which the noble Lord mentioned this point during my opening speech was that of whether we put in a special energy administrator in areas which are subject to competition. I have said that that is not the intention of the Bill as it stands. We are dealing with protected monopolies as network operators not in the generation part or any other competitive part of the supply system.

People complained that they had not had a debate about the energy White Paper. I think that we had quite a good one in many respects today. It leads us into subsequent stages of the Bill. I have no doubt that some of these wider issues will rear their heads again.

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I also hope that the specific proposals in the Bill, particularly those on dealing with the legacy of waste and the liabilities arising from that, will receive noble Lords' attention and will receive, at least broadly speaking, the support of all sides of the House.

On Question, Bill read a second time and committed to a Grand Committee.

Hepatitis C

6.35 p.m.

Lord Morris of Manchester rose to ask Her Majesty's Government what developments there have been since they announced in August an ex gratia payment scheme for people infected with hepatitis C by contaminated National Health Service blood products.

The noble Lord said: My Lords, I beg leave to ask the Question in my name on the Order Paper and, in doing so, I have an interest to declare, not a pecuniary one, as president of the Haemophilia Society.

I am grateful to all noble Lords who will be speaking in this evening's debate and I am delighted that my noble friend Lord Warner is responding for the Government.

It is one of the most endearing charms of this House that one never knows who is going to turn up here next. It was almost 30 years ago that I first met my noble friend Lord Warner; and I was extremely glad to welcome him to this House. When we met in 1974 he was a young and highly promising civil servant at the former Department of Health and Social Security in which, although my responsibilities as the first Minister for Disabled People extended all across Whitehall, I was based for more than five years. He was often involved then in helping to arrange for other officials to put together draft parliamentary speeches for his Minister to consider; and naturally I much look forward to hearing him make a speech of his own this evening. I know he will do so with all his customary decency and social concern.

This debate is about a small and stricken community of disabled people for whom acquaintance with grief—recurrent and abject grief—is an inescapable fact of daily life. So too is the burning sense of injustice among them that, while conceding the case for special help for haemophilia patients infected with HIV by their NHS treatment, successive governments have resolutely refused any such help for hepatitis C infection.

Already disabled by a rare, life-long bleeding disorder that requires continuous medical treatment, people with haemophilia have twice been infected en masse by contaminated NHS blood products. Of a patient group numbering only 5,000 nationally, 95 per cent were infected with hepatitis C and one in four with HIV. Thus many in the haemophilia community were doubly infected and left at double risk of contracting a life-threatening illness and in double despair. Of those

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infected with HIV, over 900 have since died of AIDS-related illnesses and 232 more lives have been lost to cirrhosis and liver cancer due to hepatitis C infection.

Now the same small community faces the hideous threat of variant CJD. This is not a theoretical risk. More and more haemophilia patients are being officially informed that blood products from donors since diagnosed with vCJD were used in their NHS treatment. Imagine the alarm and anguish of parents who learn that their child has been put at this grave further risk. Or that of the adult who has already been infected with HIV and/or hepatitis C and must now try to cope with not knowing whether he may also have been infected with vCJD. Their distress is made no easier by disclosures in recent parliamentary replies to me that the Department of Health does not even know how many haemophilia patients have been given blood from donors with vCJD and has no plans to find out.

Yet there is a crucial difference between this debate and all the others I have initiated for the Haemophilia Society, both here and previously in the House of Commons, over the past 15 years. Before previous debates, I was told that I was banging my head against a brick wall in asking for parity of treatment for people infected with HIV and hepatitis C—and afterwards, simply, "We told you so". But John Reid, within months of his appointment as Secretary of State for Health and much to his honour, signalled a fundamental reversal of policy with his announcement on 29th August of an ex gratia payments scheme for hepatitis C infection.

I congratulate my right honourable friend and the Government on bringing new hope to the haemophilia community. My principal concern this evening is to ensure that the pledge of 29th August is implemented with social fairness and full regard to the levels of financial help already given to identically affected patients and dependants in other countries, many of them with economies less strong and much poorer than ours, across the world.

That is the task facing us now and much the best way of tackling it successfully—I am of course aware of the meetings Melanie Johnson and officials have had with the Haemophilia Society—is for the Government to stay in close and continuous rapport with the haemophilia community. After all, they know most about the history of the case and the realities of life for those infected and their dependants.

I refer to the history of the case because people unaware of the suffering that living with haemophilia can inflict find it hard to understand how deep is the sense of injustice in the haemophilia community. To have been infected with deadly viruses by the NHS treatment on which they rely vitally for survival, with no official apology or explanation, is but part of the case. They find it disgraceful that in this country, unlike Canada, Japan, Ireland and France, there has been no official inquiry. Questions remain unanswered as to how so many patients came to be infected and—recalling the disclosures of the noble Lord, Lord Owen, as a former health Minister—why more was not done sooner to prevent this worst ever treatment disaster in the history of the NHS.

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They point out that if a tragedy on anything like that scale occurred today, an official inquiry would most certainly be held, as rightly happened after the Paddington train crash and the sinking of the "Marchioness". Serious as the consequences of these tragedies were, they did not begin to compare in scale with the loss of life caused by the contaminated NHS blood and blood products disaster. Nor has the wilful act of dividing the victims of that disaster, not on the basis of the effects of their infection but simply its classification, any parallel in the approach to other disasters here in Britain, or indeed anywhere else in the world.

How can anyone possibly justify the decision to give financial assistance to patients infected with HIV by their NHS treatment, but not to those fatally infected by the same route with hepatitis C and bereaved families? Yet that remains the position until John Reid's pledge is implemented. The profoundly moving story of three brothers explains its stark inhumanity.

All three brothers inherited haemophilia. Two were infected with HIV by their NHS treatment and died of AIDS-related illnesses. They received financial help from the Macfarlane Trust, set up and funded by the then government in 1989, and were able to make provision for their families. The third brother escaped HIV infection but was infected with hepatitis C, also by contaminated blood products used in his NHS treatment, and died of liver failure. For him there was no financial help. He went to his grave unable to make any provision for his family.

Each of the three brothers had become terminally ill and died from the same cause: contaminated NHS blood and blood products. But one was denied the help given by a government-funded trust to the other two. That contrast in treatment not only suggests but shouts of injustice.

The setting up of the Macfarlane Trust was an official acceptance of moral responsibility. There was then, and is now, exactly the same moral responsibility for loss and hardship among those infected with hepatitis C. But 15 years on, they still await parity of treatment with patients who were infected at the same time and by the same route.

Some in Whitehall have suggested that infection with HIV is in a different class of seriousness from hepatitis C infection. But let them try telling that to my noble friend Lord Winston, himself a vice-president of the Haemophilia Society, whose standing as a doctor is respected all across this House. Speaking in a previous debate of mine here, my noble friend said:

    "One cannot escape the terrible fact that death by liver failure or liver cancer is a particularly horrible end. There is a slow inexorable decline . . . severe pain that is quite intractable. The end is a mixture of mental confusion and finally coma".

He added:

    "There is no difference between HIV and hepatitis C . . . The cause is the same, a virus, and it comes from the same source, blood products".—[Official Report, 5/06/98; col. 672.]

The Department of Health's official position since 29th August has been that the implementation of John Reid's pledge is under urgent consideration and

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that the design of the ex gratia payment scheme has still to be decided. But as all of us know, the grape vine flourishes among people in pressing need when month after month goes by without any authentic guide to the thinking of those making decisions of huge significance to them.

Of course, money can never compensate for the deaths of husbands, fathers or brothers; nor can it restore the health that infected patients have lost. But it can help bereaved families and assist in meeting the onerous financial effects of living with a life-threatening virus, which research by the Haemophilia Society, made freely available to the Department of Health, has so ably and conclusively documented.

To assist my noble friend in replying to the debate, I want now to set out concerns and fears in the haemophilia community about what is being considered. First, there is widespread fear that the scheme, when it is announced, will be based on proposals made by the Scottish Health Minister, Malcolm Chisholm, earlier this year in the only statement to date about ministerial intentions on the details of implementing an ex gratia payment scheme. If so, the amount suggested will fall far short of the recommendations of the expert group that he himself set up to study and report on the issues, under the chairmanship of Lord Ross, with which I had the pleasure of discussing at length comparative provision and the problems and needs of those infected from my experience both as a Minister for Disabled People and president of the Haemophilia Society. That experience left me with the highest regard for and indeed in admiration of the care and thoroughness, objectivity and moral integrity of Lord Ross and his colleagues.

As my noble friend will know, Lord Ross's expert group recommended a payment of 50,000 for each infected person, with further amounts for those who develop cirrhosis, while the Health Minister has seemed content to pay only 20,000 to each infected person. My noble friend will be aware that the Haemophilia Society has calculated the costs of more comprehensive provision that includes a loss-of-earnings element, with payments linked to the stage of disease progression and based on the scheme set up by the Canadian Government. That averages some 140,000 per person. There is very serious concern also that, under Malcolm Chisholm's proposals, nothing would be provided for the 232 bereaved families of those who have died from hepatitis C infection—nothing at all—which would cause grievous hurt throughout the haemophilia community.

Again, there is concern that nothing may be provided for those who have cleared the virus, after long years of illness and sustained pain and suffering. It is feared too that the scheme will offer nothing to people with HIV and hepatitis co-infection, who may already have received some help for their HIV infection. Yet there is clear medical evidence that co-infection poses the greatest risk of all.

The haemophilia community hopes to hear assurances from the Minister this evening that these fears are unfounded. If not, it insists, the scheme will

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be gravely flawed and disfigured by excluding people in the greatest need and perpetuating inequities. I very much hope that will not happen and also that there is no substance in the suggestion that 29th August, 2003 will be used to determine who will and will not be eligible for financial assistance, so that the dependants of a victim who died the day before would be excluded from help. That would mean that a victim who died on 28th August would be covered and one who died on 30th August would not. Such an arrangement would lack compassion, logic and equity. How can it possibly be justified when the suffering of their bereaved families is the same?

There are many widows who have been waiting for help in recognition of the death of their partners who would find it inconceivable that they could be excluded. How much harder will it be for them to accept if they are told that their exclusion is simply a matter of the date on which their loved one died?

Yet it is not only the bereaved who could be affected in this way. I give another example of what many haemophilia patients fear could happen—that of a person infected with hepatitis C who suffers all of the effects of the disease, with progressive liver damage, but after a long and painful course of treatment manages to clear the virus. Again, if his treatment took place before 29th August, he too, it is feared, could receive nothing, while if his treatment concluded after 29th August—meaning that he still had the virus on that date—he could receive a payment. How could such double standards be justified and how can they be avoided if an arbitrarily selected date is set?

These are not hypothetical examples. The Haemophilia Society has case histories of members that show exactly the anomalies that could arise. One is that of two brothers with severe haemophilia, both of whom I met at the Carpet of Lilies event held by the Haemophilia Society here in Westminster last week. One had managed to clear the virus after extremely painful and protracted treatment and it is feared that he could receive nothing, while his brother, still gravely ill with the virus, would receive a payment. Again, how could this be justified?

That Ministers have said that the final design of the scheme is not yet decided provides grounds for hope. It must mean that it is not too late for consideration of the concerns that I have put to my noble friend this evening. And I am sure he would agree that much the best way of dealing with anomalies is not to correct them after damage has been done, but to anticipate and prevent their occurrence. Meanwhile let me again assure my noble friend of my indebtedness to John Reid for his decision to introduce a payments scheme and that I wish for nothing more now than that the long years of campaigning for justice for the haemophilia community are nearing conclusion. My regret is that it should ever have been necessary to campaign for them on the issues that I have raised in debate after debate, both here and in another place. For in none of the many parliamentary campaigns I have been closely involved in over 39 years in Parliament—even thalidomide and those more than 30 years ago for statutory recognition of dyslexia and

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autism—have I had so strong a sense that no campaigning should have been necessary to right such wrongs. Enormous cross-party backing has been given in both Houses of Parliament; and the issue of parity of treatment for HIV and hepatitis C infection, in particular, is everywhere seen not as one of Right and Left, but of right and wrong.

That is why, if campaigning has to go on, I am in no doubt—nor should anyone else be in any doubt—that go on it will until right is done.

6.55 p.m.

Lord Clement-Jones: My Lords, perhaps I may start by congratulating the noble Lord, Lord Morris, on initiating the debate and, in particular, on the timing of the debate. It gives us an opportunity to explore the details of the Government's new financial assistance scheme and at least to challenge the Government to give some details, and to give them food for thought when formulating the scheme.

In many ways, it is regrettable that we have had to have so many debates over the years. I have lost count of the number of debates initiated by the noble Lord, Lord Morris, in which I have taken part during the past six years. He should take considerable comfort from the fact that it is largely as a result of persistence from him and the Haemophilia Society that the Government have now decided to introduce a financial assistance scheme. I welcome that at least a scheme—it may not be wholly satisfactory—is certainly in the offing.

The bald statistics do not give the full picture. As the noble Lord, Lord Morris, said, approximately 5,000 people with haemophilia in the UK were infected with the hepatitis C virus in the 1970s and early 1980s. Medical estimates are that up to 85 per cent of those people develop chronic liver disease: I believe that well over 200 people have now died from liver cancer and liver disease arising as a result of infection.

In common, I am sure, with other noble Lords, I have had considerable correspondence on the subject. The statistics give no real idea of the absolute misery of the individuals infected by hepatitis C, the effect that it has on their families, or the misery of their deterioration and, in many cases, death.

I recently received a very poignant letter from a lady who sent me the diary of the last few weeks of her husband's life. It makes extremely harrowing reading. She wrote:

    "The way of his going is still with our children and myself".

That was in 1998.

    "End liver failure is a terrible death, time does not heal and it never will".

I believe that the noble Baroness, Lady Andrews, has seen extracts from the diary, which makes very harrowing reading. The noble Lord, Lord Morris, was right when he talked about recurrent and abject grief. That cannot be compensated in money terms, but it is incumbent on us at least to obtain some kind of financial compensation for what has happened to them. After all, they are the innocent victims of blood contamination. It is hugely important that the

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Government make sufficient payments to recompense all those haemophiliacs who, if they have not already done so, will develop debilitating liver diseases, as well as to their families who also suffer from the effects.

The noble Lord, Lord Morris, talked about the absolute contrast with the way in which the Macfarlane Trust was set up in 1989, where, to date, 90 million has been given by way of compensation. As the noble Lord has pointed out in previous debates, no equivalent provision has been made for those who contracted HCV.

I suppose that the Government's real case has been based on an unwillingness to breach a general rule that compensation is given only where the NHS is at fault. That was certainly the line taken when we debated this matter last March. But a complete exception was made to that rule—whether it was called financial assistance or something else; in substance it was compensation, whatever its legal status—in the case of suffers from HIV transmission. However, the same has not been done for those with HCV.

As the noble Lord, Lord Morris, pointed out, that contrasts with the behaviour of many other governments, whether in the EU, Japan or Canada. Not only have they instituted schemes for compensation, they have set up public inquiries. That is another aspect of the matter which, over time, the Government have failed to institute. I shall not go into the parallels to be drawn between HCV and HIV infection, but many aspects of the two conditions are similar. Over the years, many of us have found the fact that a scheme for HCV sufferers has not been instituted quite incomprehensible. The predicaments of those in the two categories of infection are very similar. Over time, the Government have appeared cold-hearted and miserly in refusing to provide the same level of support.

So it was with considerable optimism that we heard on 29th August John Reid announce the scheme. We all thought that, finally, some sanity was being introduced to the whole area. We thought that an ex gratia payment scheme would be set up and the details worked out over time, it was hoped, in consultation with the Haemophilia Society, which has put forward very constructive proposals for financial assistance or compensation. As the noble Lord, Lord Morris, mentioned, the society drew on the Canadian scheme, which has been extremely successful.

However, all we have heard since 29th August is a deafening silence, which has led to even greater concern. It appears now that the English and Scottish schemes are going to be very similar. There is a feeling, in particular in light of the fact that Lord Ross recommended a payment of 50,000 and yet the Scottish proposal is much lower, that the Government, too, will propose the lower figure. However, the Haemophilia Society makes an extremely good case for the figure of 140,000 as the average payment. Indeed, looking across the Irish Sea to Eire, there the financial assistance being offered averages 300,000 euros; that is a very different order of sum. I hope that, when the Government come to prepare their scheme, that they will enter into a lot of debate and discussion about the proper level of compensation.

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The terms of any compensation represent a further major issue. Will the relatives of those who have died from HCV or liver failure as a result of HCV be entitled to compensation? If the Government follow the Scottish scheme, then they will not be so entitled. Ladies such as those who have written to me will then face the prospect of receiving absolutely no financial assistance, which cannot be right.

What of those who have managed to become clear of the virus through treatment, whether by liver transplant or otherwise? What of the distress and suffering that they will have endured during that process? Surely in those circumstances people should be entitled to financial assistance. On 16th September, I asked the Minister a supplementary question related to the compensation scheme; specifically, what is to happen if the condition of a subject deteriorates? A person may be assessed at one level, but what if, over time, he or she becomes more ill? Will the scheme have built into it the necessary flexibility to allow for reassessment? Will people be entitled to higher levels of compensation in those circumstances?

I turn to the wider issue of co-infection. It would be extremely unjust if no compensation was made available to those patients suffering from both HCV and HIV infections on the grounds that they would have been compensated in part by access to the Macfarlane Trust. They have been subject to a double jeopardy, and financial assistance should be given in those circumstances as well.

When do the Government intend to announce final details? There appears to be funding down the track, and it would be extremely helpful if they said how much further consultation will take place and what the timing of the announcement of the scheme will be. I am particularly concerned that, as time has marched on, the large majority of people with haemophilia who were infected in the late 1970s and early 1980s have reached the more advanced stages of the disease, so they really need that compensation to be available. This money is justified because of their unnecessary suffering and is required for their treatment here and now.

I believe that the Government must act now to account for this awful injustice to so many people. Those individuals have waited long enough, not only to bring the necessary attention to their case—for which they need to thank the noble Lord, Lord Morris, and the Haemophilia Society—but also to receive a proper form of compensation for their unnecessary suffering.

7.6 p.m.

Earl Howe: My Lords, it is a pleasure for me to begin by congratulating the noble Lord, Lord Morris of Manchester, on the success of his long campaign to secure financial recognition for recipients of contaminated blood products who, as a consequence, became infected with hepatitis C. If ever there were an example of a tireless champion of the disadvantaged and the disabled, and of someone undaunted by

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ministerial stonewalling, it is surely the noble Lord. I have to confess to him that before the Government's announcement in August, I did not rate his chances of success on this particular campaign as very high. However, I was wrong, and I salute him.

It is also right to acknowledge the humanity and compassion of the Secretary of State in taking the brave decision to make ex gratia payments to those unfortunate victims of medical accident and, in doing so, to reverse the policy of his predecessors.

I knew I would find myself saying this, but the noble Lord, Lord Morris, has stated his case so eloquently that there is little I feel I can add to it. But now that the Government's decision has been taken, I believe that there are some key principles that should guide them in determining the way in which the ex gratia payments are distributed.

The most important of these is that the scheme needs to be fair and to be perceived as fair. In the first instance, our thoughts turn most naturally to those who, as a result of receiving infected blood products, have to live with hepatitis C and, perhaps, its more severe consequences, for many years. However, I very much share the noble Lord's concern for the widows and dependants of those who have already died of advanced liver disease or liver cancer in consequence of a contaminated transfusion.

We also need to remember that there are many people who, although now clear of infection, have been to hell and back in fighting it off. We all understand that the money to be paid by the Government does not constitute compensation in the legally accepted sense of the term. But if the intention of this scheme is to recognise the suffering of the victims and their families, and the moral responsibility borne by the NHS, then it seems to me that there should be no messing about. Financial recognition should be given to all those adversely affected, not simply people who were fortunate enough to be alive and ill—if fortunate is the word—on the date of the Government's announcement in the summer.

The second principle that should guide the Government is certainty. When the Government in due course announce the details of the ex gratia scheme, everyone entitled to an ex gratia payment should be made aware of exactly what their entitlement comprises. One potentially foggy area highlighted by the noble Lord is co-infection. The Macfarlane Trust exists to help recipients of contaminated blood who later went on to contract HIV. Those who already benefit from that scheme but who are living with hepatitis C alongside HIV need to know whether they are eligible for additional financial assistance. About 500 individuals fall into that category.

In thinking of those people, we should not be in any doubt of the anguish, pain and financial disadvantage that they now suffer by reason of their hepatitis C and its consequences, as distinct from the consequences of their HIV infection. As well as that, we should remember that the progression of hepatitis C is accelerated by HIV, and liver failure is now the leading cause of death in the group. In formulating the scheme, will the Government bear in mind the especially harsh consequences of co-morbidity?

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If there is to be a graduated structure of payments, the rationale for it needs to be made clear. I do not intend to draw the Minister on the precise amounts that might be paid to particular groups of individuals, partly because I do not believe that he would tell me even if I did. However, supposing that there were to be a stepped entitlement dependent on the severity of a person's illness, it is important for everyone to understand why those particular figures have been arrived at.

There are benchmarks that may be helpful in that matter. One is the structure of payments made to HIV-infected patients by the Macfarlane Trust. Another, well known to the noble Lord, Lord Morris, is the vaccine damage payments scheme. There are other benchmarks from case law. My point is that sums of money should not simply be plucked out of the air but should be determined in relation to the scale of the suffering that they are intended to ameliorate.

I understand that the Minister cannot go into detail today, but will he tell me whether the payments under the scheme are being worked out within the framework of a predetermined budget or whether, as I hope, the payments are to be fixed in a way that might most conveniently be described as bottom-up?

Earlier this year, the Chief Medical Officer published a paper called Making Amends. It would be helpful if the Minister could make clear how, if at all, those recommendations relate to the scheme of ex gratia payments that we are now debating. The CMO's consultation paper offered alternatives to tort-based litigation for those who felt that they might have suffered as a result of NHS treatment. A large part of the recommendations relates to injuries caused by someone's fault, which are clearly not relevant to the matters that we have discussed today. With the hepatitis C victims, there is no admission or suggestion of fault.

Another of the CMO's proposals is more relevant, however. It relates to babies who sustain brain damage resulting from their birth. That proposal for compensation expressly excludes the concept of fault. The only requirement is to prove causation. In such cases, the proposals for compensation include a managed care package, a lump-sum payment and annual payments on top of them.

Although the Government have been careful to make it clear that the ex gratia scheme for hepatitis C victims does not constitute a precedent, it cannot be viewed in isolation. I realise that the CMO's paper is only a proposal at present, but it is clearly a carefully considered piece of work. Under what circumstances do the Government believe that a no-fault compensation scheme may have a part to play, and in what way precisely does such a scheme differ from an ex gratia payment scheme such as the one that we have discussed? What criteria are applicable to each? To put it another way, exactly why did the Secretary of State decide to opt for an ex gratia scheme rather than a no-fault compensation scheme such as that envisaged by the CMO?

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In general, it would be helpful to hear from the Minister some of the Government's thinking on this scheme and an idea of when Ministers expect to make a further announcement on the details. Above all, I hope that the announcement when it comes will prove, at the very least, satisfactory to all those who have suffered so grievously and to whom the sympathies of the whole House are extended.

7.15 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, I thank my noble friend for reminding me of my misspent youth in so generous a way. I was taken down memory lane very agreeably by his opening remarks.

My noble friend has done much to keep this matter at the forefront of the Government's mind and is now providing me with an opportunity to give the House an up-to-date statement on the progress that we have made so far. In doing so, I shall endeavour to cover the points raised by my noble friend and other noble Lords.

Let me start by congratulating my noble friend on his absolutely outstanding record of commitment to this cause over many years, as other noble Lords have done. His efforts on behalf of people with haemophilia infected with hepatitis C as a result of treatment with NHS blood and blood products, and his service as the long-standing president of the Haemophilia Society, are widely recognised and valued in all parts of the House and outside, and by the Government.

I should also like to pay tribute to those people who took part in the Haemophilia Society's annual Garland of Lilies Day last week. We extend our sympathy to them on the loss of their loved ones.

The background to this issue is well documented and has been the subject of many debates in both this House and in the other place. Suffice it to say that the inadvertent infection of many thousands of people with hepatitis C as a result of treatment with NHS blood and blood products in the 1970s, 1980s and 1990s remains a tragic event in the UK and in many other countries around the world. These patients were at the time given what was considered by professionals to be the best treatment available. It was a terrible tragedy that medical advances in virology could not keep pace with those being made in transfusion and blood technology—technology which is fundamental in saving lives today.

No one can be but moved by the accounts of personal tragedies that individuals and their families have given to Members of the House and elsewhere. The inadvertent infection with hepatitis C was indiscriminate, affecting both those who regularly required blood products, such as people with haemophilia, as well as patients who received one-off blood transfusions. Fortunately, following the introduction of heat treatment technology in 1985 and donor screening in 1991, there is now only a minute chance that further infections will occur. But this is of little consolation to those who were infected before these scientific breakthroughs could be fully implemented.

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The Government have enormous sympathy for people who have suffered infection via contaminated blood products and recognise the hardships that illness has brought on them and their loved ones. Those who were infected, and campaigners such as my noble friend Lord Morris, have longed called for social justice with regard to this issue and we acknowledge those efforts.

For its part, the Department of Health understands only too well the difficult dilemma where treatment and care can lead to harm where none is intended. Having looked at the history of this issue, my right honourable friend the Secretary of State for Health decided in the summer that the establishment of a financial assistance scheme for those affected by these events was the right thing to do. I am grateful for the generous remarks of noble Lords about my right honourable friend's actions.

When the hepatitis C payment scheme was announced on 29th August few details were available. Nevertheless, the fact that the Government had decided in principle that such a scheme should be set up has received universal approval. I am now pleased to report that significant progress has been made in drawing up the details of the scheme.

Discussions on the specifics of the scheme have been continuing in the department since before the August announcement. First and foremost, we have taken steps to ensure that the scheme will be fully inclusive and fair. Officials have met on a number of occasions with their counterparts in the health departments of the devolved administrations in Scotland, Wales and Northern Ireland to co-operate in the development of a scheme that will cover the whole of the UK.

Although it would be premature for me to comment on those discussions in detail, I can confirm that a system will be put in place to ensure that all eligible UK claimants will benefit no matter where they currently reside, or where they were resident when they contracted the disease. We shall work hard to ensure that those eligible for payment under the terms of the scheme do not miss out because they may have crossed a border since their initial treatment.

Noble Lords will be aware that the Minister for Health in Scotland, as has been said, has already announced the proposals for the Scottish Executive's payment scheme. These proposals are being considered by the administrations, along with other independent recommendations such as those made in the report of the Hepatitis C Working Party to the Haemophilia Society and the report of the Scottish Expert Group chaired by Lord Ross.

My noble friend raised the question of whether the proposed scheme would simply follow that announced by the Scottish Executive earlier this year. The scheme envisaged for Scotland was clearly based on the particular circumstances in Scotland at the time. Following the Secretary of State's announcement in August, it was important that all available information was taken on board, including the reasons behind the

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Scottish scheme. That is why we have had many discussions with the Scottish Executive to try to produce a UK-wide scheme.

Parallel discussions in England, Scotland and Wales have also included major patient organisations, including the Haemophilia Society. We are grateful to the groups that have participated for raising issues and contributing to the development of the scheme. I am also aware that my honourable friend the Parliamentary Under-Secretary of State for Public Health has met with the chair of the All-Party Parliamentary Group on Haemophilia of which my noble friend Lord Morris is the honorary president.

This debate also gives me the opportunity to pay tribute to the work of that group in promoting the interests of people with haemophilia. We are keen to take on board the comments made by these organisations and are considering them during our deliberations. We continue to correspond with these and other groups to keep key stakeholders up-to-date with developments.

Officials from the health departments have also met and consulted with clinical experts, including leading hepatologists and haematologists on various aspects of the scheme and regularly call upon the expertise of the National Blood Authority. These consultations are an integral part of developing a scheme, but noble Lords will appreciate—I think that the noble Earl, Lord Howe, anticipated this—that I cannot, as yet, make public further details, although I expect my right honourable friend the Secretary of State for Health to make an announcement before too long.

Following the announcement in August, the Department of Health received an enormous number of inquiries from people eager to take forward applications and benefit from the proposed scheme. Officials have moved swiftly to ensure that direct contact could be maintained with inquirers to keep them up to date with developments.

To this end, the department has established a confidential mailing list to keep a record of all those who contacted us. In order to make the mailing list as accessible as possible, telephone, e-mail and postal contact details were provided and those who had not yet got in touch were encouraged to do so, for example via the Haemophilia Society website and newsletters.

The mailing list now comprises scores of names and continues to grow day by day. Registrants will be contacted regularly in the near future as further details of the scheme are released and the application process is finalised. We believe this to be an important initiative as it gives would-be claimants confidence that their details have been noted and that they will be given an opportunity to make a claim once the scheme has been finalised and announced.

As well as opening a constructive dialogue with the Haemophilia Society, we are also listening to other patient groups and individuals and consider any concerns that they raise. We have received correspondence from various sources, including MPs, lawyers writing on behalf of clients, clinicians writing on behalf of their patients and bereaved families as

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well as people with hepatitis C themselves. All those letters have been replied to and we have put their contact details on to the mailing list that I mentioned.

As well as providing advice, the National Blood Authority is involved in the identification of people who may have received hepatitis C-infected blood transfusions. We are co-operating with the authority in an effort to ensure that people who contact it regarding the scheme are referred on to the department.

My noble friend is aware that there are a number of legal and other difficulties—some have been mentioned this evening by many noble Lords—associated with the introduction of an ex gratia payment scheme. Many of those issues were successfully overcome during the establishment of the MacFarlane and Eileen trusts for people infected with HIV as a result of treatment with infected blood or blood products. We will, as a matter of course, look to those other schemes to learn lessons on how best to implement and operate the scheme that we are discussing. We are also looking at the detailed issues very carefully, and these are not constrained by any arbitrary fund.

My noble friend raised some issues about a public inquiry into the infected blood issue. I have to make it clear in as gentle a way as I can that the Government do not accept that any wrongful practices were employed, and do not consider that a public inquiry is justified. Donor screening for hepatitis C was introduced in the UK in 1991, and the development of that test marked a major advance in microbiological technology that could not have been implemented before that.

My noble friend referred to other countries, but we do not believe that they are comparable to the situation being dealt with in the UK. In Ireland and Canada, for example, compensation schemes came about because the blood authorities were both found to be at fault. Indeed in Canada, criminal prosecutions were filed against those responsible. It is important to stress that, despite our decision to make ex gratia payments, the position with regard to accepting liability has not changed. The payments are made on compassionate grounds and are not compensation. With that in mind, the payments cannot be expected to take account of loss of earnings or compare with punitive damages awarded by the courts in other countries. That said, as part of our deliberations we are considering, as other noble Lords have mentioned, the report of the hepatitis C working party to the Haemophilia Society, which I understand is based on the Canadian model.

Noble Lords will be reassured to hear that we are working closely with government lawyers and other government departments to resolve outstanding issues specific to the scheme and to minimise delay. In particular, I know that concerns about social security disregards have been voiced, and we are working closely with the Department for Work and Pensions and the Treasury to address those.

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My noble friend raised the issue of arbitrary dates of death, which is part of the deliberations currently going on with regard to the question of payments to dependants. We wish to try to resolve those problems satisfactorily.

In addition, concerns have been raised by and on behalf of recipients of financial assistance from the MacFarlane and Eileen trusts, who have signed a waiver that may exclude them from making claims under the proposed scheme. Obviously we are urgently looking at the status of that waiver and hope to reach a conclusion that will be satisfactory to any such claimants.

So what will the Government be doing next? Our discussions are continuing apace on all the issues, with special priority being given to finalising the eligibility criteria and payment structure. We are also working on setting up a system to administer payments under the new scheme. As I have indicated, we expect to be in a position to make a further announcement detailing those very soon. In the mean time, we will continue to listen, consider and respond to comments that we receive. In addition, we are putting in hand the necessary work to ensure that the scheme is up and running as soon as possible.

My noble friend mentioned some issues around variant CJD. The answer to his main question is that we do not know whether variant CJD can be transmitted by blood. Therefore, we do not have any diagnostic tests for it in blood. He also made some remarks about the CJD compensation scheme. The Government have set up a variant CJD compensation scheme that will provide for payments to be made in respect of 250 cases of variant CJD up to a maximum of 55 million.

In recognition of the exceptional circumstances, on top of the 55 million trust fund, the Government will pay 50,000 to each victim in the family. The Government have committed enough funds to cover the 250 cases. One hundred and thirty-four victims are receiving money. I hope that I have provided the noble Lord with some background on that issue.

In conclusion, I am sure that noble Lords will agree with me when I stress the importance of setting the scheme up properly from the outset. It is always terribly easy to rush into those areas and to get things wrong. Despite the tragic circumstances of many victims, speed does not necessarily mean that we get it right. Although it may take a little more time than we would like—indeed, much more time than we would like—the benefits of introducing the scheme properly are obvious. It would be a great shame if a "rush job" left us with an inefficient or poorly structured scheme. On that basis, I thank noble Lords for their contributions today and reassure them that we expect to be in a position to respond more fully to their questions shortly, and to make an announcement soon.

        House adjourned at twenty-eight minutes before eight o'clock.

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