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Written Ministerial Statements

Tuesday 14 December 2004


Exploitation of Tax Rules

The Paymaster General (Dawn Primarolo): Legislation to prevent companies bringing forward tax relief for losses prior to transition to international accounting standards is to be included in the Finance Bill 2005. The legislation applies to losses arising on transactions that are designed to accelerate relief that would otherwise be deferred. The changes will have effect from today.

A copy of today's Inland Revenue news release giving the relevant background to this measure has been deposited in the Libraries of both Houses and is accessible on the Inland Revenue's website at: http://www.inlandrevenue.gov.uk.


Supreme Court Building

The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): The following statement has been made by my noble Friend the Secretary of State and Lord Chancellor

"The location and the setting for the UK Supreme Court should be a reflection of its importance and its place at the apex of the justice system, and the heart of the constitution. Providing the Supreme Court with its own building provides a physical demonstration of the separation between the judiciary and the legislature. Establishing the Supreme Court in the Palace of Westminster would be entirely inappropriate.

Following an extensive search and evaluation of potential sites in central London, I am today announcing that Middlesex Guildhall is my preferred option for housing the Supreme Court.

There are three key reasons for this decision:

At this stage, I should stress that Middlesex Guildhall is my preferred option. As the detailed designs are developed, I will need to remain satisfied that they fully meet the operational requirements of a modern Supreme Court. This will, of course, require the normal planning approvals and my officials are consulting with English Heritage and Westminster city council on the
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development of the designs. The Law Lords have continuing reservations as to the suitability of this building to house the Supreme Court of the United Kingdom. I will continue to consult with them closely on the issues.

The Design Proposals

The building for the new Supreme Court needs to meet the statement of requirements that was agreed with Lord Bingham of Cornhill in August 2003 and subsequently developed in discussion with the Law Lords' Supreme Court Sub-Committee, chaired by Lord Nicholls of Birkenhead. The headline requirement is for a building that measures at least 3,500 square metres, including sufficient space to enable co-location with the Judicial Committee of the Privy Council (currently based in Downing Street).

My view is that Middlesex Guildhall meets the statement of requirements and would enable much better facilities to be provided than the current arrangements. The proposals for this self-contained and dedicated building include:

We are developing these plans for the building in close consultation with the Law Lords, English Heritage and Westminster city council. We would of course need to apply for planning permission in the usual way. The city council is not in a position to accept the principle or the detail of the building scheme at this stage.

Delivering the Proposals

Providing the right building for the Supreme Court has financial implications. The cost of establishing the Supreme Court at Middlesex Guildhall will be approximately £30 million in current terms. This £30 million estimate contains two elements: base costs and optimism bias. The base costs are construction costs and statutory fees of £15 million; £2 million professional fees; and £3 million VAT. Those figures are then inflated by 50 per cent. optimism bias in accordance with HM Treasury guidance on financial appraisal and evaluation (the green book). The optimism bias is applied to building projects as a contingency to cover risks, unforeseen issues and changing project specifications.
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But I also need to ensure that the criminal justice system is not adversely affected by the selection of Middlesex Guildhall. I have therefore considered a number of options for providing additional courtrooms and I am confident that the Middlesex work can be decanted while sustaining criminal justice performance. I will be discussing these decant plans in detail with the judiciary and criminal justice partners over the next few months. Provision of the additional courtrooms will cost a further £15 million in current terms (including optimism bias).

The approximate annual cash running costs following establishment of the Supreme Court would be £8.8 million (£8.4 million relating to the Supreme Court; the remainder being the ongoing costs from courtroom reprovision). This figure includes £2.1 million judicial remuneration; £1.1 million staff salaries; £1.0 million administrative costs; £0.4 million utilities and rates; and £3.8 million building costs (including capital charge/lease costs and building maintenance costs).

It is not entirely straightforward to separate the administrative costs of the Appellate Committee from the generality of expenditure in the House of Lords, but the approximate annual cost to the public purse of the current arrangements are just over £3.2 million per annum. This figure includes judicial and staff remuneration, and general administrative costs. The table below compares the current and estimated running costs. Costs (£m)
Appellate CommitteeCosts 2002–03Supreme CourtEstimated Costs
Judicial Salaries2.12.1
Staff Salaries0.61.1
Utilities and Rates0.10.4
Building Costs3.8

This is a complex project which will require delivery in two key stages: the provision of additional courtrooms needs to be completed before refurbishment work can begin on Middlesex Guildhall itself. While I need to be satisfied that both stages are completed to a high standard, my aim is to establish the Supreme Court as soon as practicable. I would therefore hope that the court's first sitting would be in 2008.

The Supreme Court would not be established until the building was ready for operation.

The Search and Evaluation Process

The search for the Supreme Court has involved:

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The search generated a long-list of 48 properties, five of which merited further consideration after closer scrutiny against a number of criteria (size, operational efficiency, adaptability, suitability). After a full Treasury green book appraisal of these five options, two properties—Middlesex Guildhall and the new wing of Somerset House—remained under active consideration.

In order to finalise the evaluation of the two options, more work was undertaken to identify how the current layouts could be adapted in order to meet the specific requirements of the Supreme Court (including engagement with the Law Lords, English Heritage and Westminster city council).

Of these two strong options, my decision that Middlesex Guildhall should be the preferred option was based on the three key reasons set out above: its location on Parliament Square; its fit with the Supreme Court requirements; and its value for money."

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