Question
I thank the Minister for her statement, but the situation is worse than she has outlined. We have had four PAC inquiries into Capita’s administration scheme this year, and it has missed virtually every single one of the deadlines that it set out in each of those hearings. The latest revelation I have discovered is that if Capita does not pay out the lump-sum payment due to bereaved relatives within two years, those relatives will have to pay tax at the highest rate. I wrote to the Minister about that issue; she very kindly replied and had a meeting with me, and she told me that there were not likely to be more than 10 such cases. I find that improbable, given that the scheme has 1.7 million members. Indeed, The Guardian has published an article saying that 1,600 members have been waiting for over 100 days, so it is likely that many of these people will get up to the two-year deadline. Can she guarantee to the House today that she will either enforce Capita paying compensation for any lost money, or change the law so that none of the people in that very vulnerable position, waiting for their payment, will be worrying about whether they will pay tax?
Answer
I thank the hon. Member for meeting me last week to discuss this really important issue. The relatively small figure of around 10 that I gave to him is in relation to a very specific category of families who are at or beyond the 18-month point. Cabinet Office officials are working to ensure that they are dealt with as quickly as possible, but if it ends up looking like the rectification plan is not going fast enough and more people will fall into scope, I will of course take further action. I have also liaised with His Majesty’s Treasury on this issue.
Verdict: AMBER (28/100)
The question asked whether Capita will be made to pay compensation, or whether the tax treatment of late lump sums will change. The reply covers the timing of rectification and says the Minister has liaised with HM Treasury, but it never says whether compensation will be paid or whether the tax rules will change. Because the answer is hedged and leaves both options unresolved, the person who asked would likely need to submit a follow-up to get a clear response.
How we got there
| Question item | Coverage | Specificity | Rationale |
|---|---|---|---|
| Will the Minister guarantee to the House that either Capita will be enforced to pay compensation for any money lost by bereaved relatives, or the law will be changed so that those relatives do not pay tax at the highest rate on late lump-sum payments from the scheme? | Partially Addressed | Hedged | The item asks whether Capita will be made to pay compensation or whether the tax treatment of late lump sums will change, and the reply never addresses either option directly. It discusses rectification timing (seq 3, 4) and says the Minister has liaised with HM Treasury (seq 5), which only loosely touches the tax side without saying whether the law will change, so the item is only partly engaged with and hedged. |