Treasury plans scuppered by historic claims of £47bn

Money owned to victims of Post Office scandal and more

- DAVID MADDOX

The efforts of the chancellor Rachel Reeves to get control of Britain’s finances are being hampered by a massive £47bn bill in outstanding compensation claims which could balloon even further, The Independent can reveal.

Analysis of a report by the National Audit Office (NAO) showed £84bn has been pledged by previous governments, with 12 compensation schemes for injustice, cover-ups and negligence. Although much of that sum has been paid out by the British state, almost £47bn is still owed in high-profile cases such as the infected blood and Post Office Horizon scandals.

The outstanding total is more than double the £22bn black hole in the nation’s finances that the chancellor revealed to MPs in July which saw her slash winter fuel payments, cancel reforms to social care and cut spending plans including upgrades to the railway network. Ms Reeves has also confirmed that she intends to roll back on her election pledge not to raise taxes.

But, alarmingly for the government, the bill could grow even higher. Infected blood scandal victims are expecting more than the £2.2bn currently in the budget to compensate them, while other demands for compensation are still to be decided.

Compensation for around 3 million Waspi (Women Against State Pension Inequality) women whose retirement plans were hit by changes in the pension age, worth between £1,000 and £2,950 each, has not been included in the figures. There is also pressure for a proper compensation scheme for the British nuclear test veterans, with 1,500 still believed to be alive.