Falconer heads historic shake-up of judicial system

Lord Falconer of Thoroton took charge yesterday of a historic shake-up of the legal and judicial system that will see the abolition of the post of Lord Chancellor and the creation of a supreme court.

As head of the new Department for Constitutional Affairs and in taking over the Scottish and Welsh offices, he also becomes one of the most powerful cabinet ministers.

Lord Falconer - known simply as "Charlie" in Downing Street - has known Tony Blair since they were schoolboys in Scotland. As ambitious young barristers in the Seventies, the two men shared a flat in Wandsworth, south-west London. They took off in different directions when Mr Blair embarked on his political career, while Lord Falconer quickly became a wealthy QC.

But when Mr Blair came to power in 1997, he immediately turned to his old friend for advice and support. After a year as Solicitor General, the newly created peer oversaw the disastrous Millennium Dome as Cabinet Office Minister from 1998 to 2001.

Emerging politically unscathed from the wreckage of the scheme, the urbane Lord Falconer was switched to the Home Office, where he took charge of criminal justice, sentencing and law reform.

There he built an effective working relationship with David Blunkett, the Home Secretary, who was prepared to delegate responsibility for large chunks of his empire to his minister of state. The strength of that partnership has proved crucial to the constitutional upheaval announced last night by Downing Street.

Mr Blair will be calculating that the two men will be able to work in harness to drive through the fundamental review of the criminal justice system. They staged a joint photocall last night, with Lord Falconer hailing a "new beginning" for the criminal justice system. Mr Blunkett was also delighted at having fought off plans floated by Downing Street to hive off some of his empire to a new department. A Home Office source said: "The two men got on very well here and will carry on working together hand in glove."

The scale of the changes - which Downing Street said demonstrated Mr Blair's determination to modernise the constitution - took Westminster by surprise.

The unelected peer, regarded with suspicion by some Labour MPs and frequently mocked as one of "Tony's cronies", will now play a crucial role in the future direction of the Government, and one that will make a fundamental difference to the UK's constitution.

The unique status of Lord Chancellor as head of the judiciary, Speaker of the House of Lords and a member of the Cabinet, has always worried many Labour MPs. That arrangement will be dismantled with Lord Falconer operating out of the Lord Chancellor's Department - and not the Lords - and not sitting as a judge. And he will not sit on the Woolsack overseeing proceedings in the Upper House. Within the next six weeks, he will publish plans to create an independent Judicial Appointments Commission that will be able to appoint judges. Over the same period, proposals for an American-style "Supreme Court", replacing the existing system of the Law Lords, will be published. Both plans will go out to consultation, with Downing Street refusing to be drawn on how long that could take.

Lord Falconer will only take the title of Lord Chancellor until the consultation is completed and necessary legislation passed, before becoming the first Secretary of State for Constitutional Affairs. He has also decided not to take the £202,736 salary to which his controversial predecessor, Lord Irvine, was entitled. Instead, Lord Falconer will be paid £96,960, the same as other secretaries of state in the Lords.

Yesterday, he made his first move to repair the ill-feeling between the Government and judiciary when he announced moves to consult top judges on criminal justice legislation. "To improve these arrangements I am drawing up a protocol for consultation between the Home Office and the senior judiciary on Home Office legislation," he said.