I am sure that many Members of the House will welcome the fact that Northern Ireland receives more public expenditure per person than the UK average, but for the past five years that proportion has been declining relatively, whereas Scotland's has been increasing. What is the Government's policy towards the relative merits of public expenditure within the union?
Northern Ireland did, indeed, receive a very good settlement from my right hon. Friend the Chancellor. Again, I commend the Finance Minister in the new Administration in Northern Ireland for the extremely good way in which he has handled the settlement to ensure that Departments in the new Administration and Executive are able to fulfil their commitments to public services. On the specific question that the hon. Gentleman asks, the budgets are derived from the Barnett formula, which has served the United Kingdom well for 25 years. It is, of course, a needs-based assessment of priorities by the Government for the Administrations, and we believe, as statements made by members of the Executive in Northern Ireland suggest, that the settlement for Northern Ireland for forthcoming years is a fair and just one.
Does my right hon. Friend agree that the challenge for Northern Ireland is not over-reliance on public investment but attracting private sector investment, that the historic peace settlement that this Government have introduced has laid the foundations for that and that evidence of this success is the massive increase in house prices in the north over the past two or three years?
My hon. Friend makes an important point. First, we must understand that because of 40 years of troubles, it has been difficult to re-engineer the Northern Ireland economy in the way that has happened in the rest of the United Kingdom over the past two or three decades. That is why public expenditure represents about 70 per cent. of Northern Ireland's economy, which compares with a figure of 41 per cent. in England and stands markedly against 34 per cent. in the Republic. He is right to draw attention to that. The new Administration in Northern Ireland have plenty of scope to regenerate their economy by allowing some of those sectors in the public area to be open to more competition from other areas than they have been in the past decade or two.