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Lord Falconer of Thoroton: My Lords, the Supreme Court is an integral and vital part of the Bill. If there is no Supreme Court, then the Bill loses one of its vital parts. The Lord Chief Justice, who is in his place today, described the Bill as a great reforming constitutional Bill because it contains so much of value: the concordat; the Judicial Appointments Commission; the new relationship with the judges; and the Supreme Court. I invite your Lordships to pass the Supreme Court in principle so that the whole Bill can pass and the future can be clear. As I made clear in my intervention in response to the question asked by the noble Viscount, Lord Bledisloe, I shall not precipitate a vote today, so that there can be further consideration next Monday, on Third Reading. But I invite your Lordships to look at this issue in a straightforward way, which is the way that we always deal with business in this House.

The Supreme Court is a proposal on which the Government published a consultation paper in July 2003. The Bill was introduced into this House in February 2004 and has been before the House for almost 10 months. The Bill has been considered in a special Select Committee, and the report of that Committee devoted 37 paragraphs to the question of whether to create a new Supreme Court. On 11 October, we discussed the issue in Committee. There have been numerous discussions since then, and the Government have continued to listen to the points that have been made and have tabled several amendments to give effect to considerable concessions that have been made.

The essence of the proposal put by the Government is a new final court of appeal that is clearly and functionally separate from the House of Lords. There has never been any doubt about the Government's proposal. There have been those who have opposed it, but there has never been any doubt about it. The case for the Supreme Court has been made time and time again. As the noble and learned Lord, Lord Bingham, has said on many occasions, it is the mark of a modern democracy that it has a final court of appeal separate from the legislature. One committee of this House should not be deciding the meaning of statutes passed by this place and another place. All noble Lords who
 
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have spoken in this debate have accepted that the public should be able to identify when the courts decide something and when Parliament decides something. The Supreme Court should be somewhere that the public can identify it as being different from Parliament. It should be somewhere where the public can, in a meaningful way, visit.

The noble and learned Lord, Lord Howe, who described himself as once having been a "dangerous radical", now puts forward, as I understand it, the following proposal: there should be a Supreme Court, but it should sit in this place; the members of the Supreme Court should be Members of the House of Lords; and they should be able to call themselves Lords of Appeal in Ordinary. On the face of it, that does not look like a clear functional or operational separation between the House of Lords and the final court of appeal.

The noble and learned Lord said that there should be a separate entrance—he referred to Black Rod's Garden—and that there should be substantial refurbishment of the part of the Palace where my current offices are. I have no objection to my part of the Palace being taken away for a good cause, but I simply raise the question of how much the noble and learned Lord, Lord Howe of Aberavon, thinks would be the cost of providing, in effect, a separate Supreme Court in this building. It would be an enormous amount. I thoroughly and wholly agree with the noble Baroness, Lady Carnegy of Lour, that the cost of refurbishing existing buildings is always considerably more than building new buildings to achieve the same result. Although I hold the noble and learned Lord, Lord Howe, in the greatest and most genuine respect, I submit that his proposal is not realistic. It is not realistic either as a means of delivering the separation that he seeks or in terms of the cost of such a proposal.

Lord Howe of Aberavon: My Lords, I respond courteously to the observations that the noble and learned Lord makes about me. I was not proposing a vast construction project. One of the things that the Law Lords regard as important is a continuation of the present atmosphere of the committee room in which they sit. Arrangements should be made so that it is quite clear that there is a separate entrance to a separate institution, and so on. Of course there will be some cost, but we do not need a magnificent reconstruction from the ground upwards.

Lord Falconer of Thoroton: Then, my Lords, I do not see how that would lead to the benefit that the noble and learned Lord described, such as the public having proper access. He will remember the evidence given by the noble and learned Lord, Lord Bingham, to our Select Committee regarding the total absence of members of the public attending his deliberations when he was sitting as chairman of the Judicial Committee of the House of Lords.

As has been made clear, the Government's preferred site for the new Supreme Court will be Middlesex Guildhall but, as the Written Statement said, there is much work to do. I believe that the Supreme Court
 
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should not start work until there is an appropriate building for it. Only with a clear and separate building does the functional and operational separation, so vital to the proposal, occur. That is why I agree with those who wish to see a sunrise clause in the Bill, which would prevent the Supreme Court coming into force until it has a suitable home. A sunrise clause, which has been much discussed around the House and has been agreed with a senior Law Lord, will, if your Lordships agree, be included in the Bill.

This means that until the new Supreme Court comes into being, the Judicial Committee of the House of Lords will continue as before. While the Judicial Committee of the House of Lords continues to sit here before the Supreme Court comes into existence, all its members will be Members of this House, with all existing rights. When the Supreme Court comes into existence there will for a transitional period be some who are and some who are not Members of the House of Lords. But then the Supreme Court will be outside the Lords, and the issues of a differential tier within the Supreme Court will not apply.

The cost of the new Supreme Court, in capital terms, will be £30 million for the renovation of Middlesex Guildhall and £15 million for the cost of additional courts and the decanting costs of the work currently taking place in Middlesex Guildhall.

Running costs are also dealt with in today's Written Ministerial Statement. Current running costs for the Law Lords are £3.2 million, which include judicial salaries. The running costs of the new Supreme Court, including judicial salaries, will be £8.4 million. So in terms of order of magnitude, £45 million will have to be spent on the refurbishment of Middlesex Guildhall and the decanting costs of the criminal court work currently carried out there. The additional running costs per year will be approximately £5 million. That is the scale of cost that will be incurred in setting up a Supreme Court. I believe that the House should have that information available before making its decision.

I should like to go through in detail the questions raised by the noble Lord, Lord Crickhowell, to assist noble Lords in coming to a conclusion. He asked about the statement of requirements. The statement of requirements was agreed between myself and my department and judicial Members of the House of Lords. It sets out the rooms required by the Supreme Court and their sizes. It specifies, for example, that there should be three hearing rooms larger than the current Appellate Committee rooms, 14 justices' chambers, and a library of 250 square metres. The noble Lord, Lord Crickhowell, will see that the Written Statement broadly sets out the main provisions of the statement of requirements.

The noble Lord asked about the total estimate. The £30 million estimate for the refurbishment of Middlesex Guildhall represents all building works, professional fees, statutory fees, VAT and the cost of fitting out and furnishing the building to a very high standard. It does not include ongoing running costs, as I think I have made clear. Dependent upon the procurement approach, which can be done in a
 
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number of ways, the £30 million does not necessarily represent a single capital sum. Part or all of those costs could be rentalised.

Lord Crickhowell: My Lords, on that point, does the estimate include the cost of the very smart library referred to and the cost of IT?

Lord Falconer of Thoroton: Yes, my Lords, it does.

The £15 million estimate for the reprovisioning of Crown Court rooms is based on the figures provided by external professional advisers. As with the refurbishment costs, it contains an element of optimism bias to take account of risks and unforeseen problems.

The noble Baroness, Lady Carnegy, asked how confident we were about meeting this figure. The department which has done the work has a good track record in building procurement, as the Treasury recognises, particularly in large-scale refurbishments such as this. From time to time, those running a court estate refurbish old buildings to make them into appropriate court buildings. This is such a project, and it has been estimated by a team with a good track record.

The noble Lord, Lord Crickhowell, asked whether quantity surveyors have been engaged. The costs in the Written Statement were prepared by a team of professional advisers, including reputable quantity surveyors.

If they care to look, noble Lords can see in the Treasury Green Book the detailed explanation of the factors taken into account in an optimism bias. I earnestly ask the noble Lord, Lord Crickhowell, to read it if he has a couple of days spare. Overall, the optimism bias aims to cover all the predictable risks and any changes which need to be made to a project specification as well as an uplift for wholly unforeseen issues. That is why an uplift over professionally assessed costs is as high as 50 per cent.

Risk factors taken into account in the Middlesex works include hidden building defects and supposed extensive hidden asbestos, although I do not believe that to be the case. So our optimism bias needs to take account of matters which we do not know to be true but which present a risk.

The noble Lord also asked about the form of contract. The noble Baroness is absolutely right about the care we should take on the sort of contract entered into. The noble and learned Lord, Lord Fraser of Carmyllie, referred to that in his report in relation to the Scottish Parliament building. We cannot and will not decide the precise form of the contract until rather later in the procurement process to ensure the most effective project management. That is vital if we want to learn the lessons that the noble and learned Lord, Lord Fraser of Carmyllie, asks us to learn about the Scottish Parliament.

The form of the contract will be decided on the basis of legal advice and professional advice from quantity surveyors and project management. The Department for Constitutional Affairs does not sign building
 
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contracts which result in the taxpayer taking the greatest share of the risk, which everybody is urging us to avoid. We would normally retain a single, professionally qualified project manager to oversee the entire contract, with a single departmental official acting as project sponsor representing the customer. This provides accountability for cost, quality and time. Ministers, quite rightly, are not involved in the operational process of supervising such a contract as this, which your Lordships may think is a good thing, although of course they are accountable to Parliament for it.

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