I thank the Chairman for her kind introduction and the invitation to address the committee. May I begin by congratulating her on her taking over the Chair? I have already seen the firm grip she has on proceedings and I will try not to infringe the rules on privilege.
In a previous incarnation as shadow secretary of state for Northern Ireland, I often came here with Julian King as ambassador and was always unfeignedly greeted with warmth as an unknown Opposition spokesman. Many Oireachtas Members made time available to me which I really appreciated. It made an enormous difference when I took over as Secretary of State that I had good relations and links with a strong feel for their views on many issues and had taken their advice. It is tremendous to be invited to Leinster House to address such an important committee. It does have very important work to do.
I consider myself very lucky to be the first Secretary of State to take over in Northern Ireland when constitutional issues are not the absolute overriding priority. Thanks to man-years of effort from Members of the UK Parliament, Oireachtas Deputies and Senators, and, in fairness, Members of the US Congress, we now have stable institutions in Northern Ireland endorsed by huge majorities both in the Republic and the North at the time. Last years, elections went through in the North with less acrimony than the AV referendum we had on the other side of the Irish Sea. What we now have is an opportunity to build on this.
While we have overwhelming support for the settlement, there is a small exception of, sadly, a number of people who do not accept it. It is appropriate to thank Ministers and the Garda Síochána for the staunch support they have shown to the work of the PSNI and the Northern Ireland Minister of Justice, David Ford, in bearing down on this small number of sadly very misguided but dangerous people who do not accept the settlement. It is very much due to this unprecedented high level of co-operation that several attacks were thwarted in recent months. Lives have been saved and terrible injuries prevented.
When made shadow secretary, I made it my business to come to Northern Ireland on a weekly basis. Not being the least bit complacent about the state of politics, my conclusion then was there was an opportunity to build on the foundations provided by the Agreement and, to use the phrase of the Northern Ireland affairs committee, concentrate on the economy and cement the peace. We have made this a major plank of the new UK Government's policy to work closely with devolved Ministers in helping to turn around the economy which is extraordinarily overdependent on public spending. According to one survey, public spending represents 77.6% of Northern Ireland's gross domestic product. This is clearly unsustainable. We want to work with local Ministers to rebalance the economy which I believe will take possibly 25 years. By doing that, we want to encourage the private sector and steadily replace the dependence on public spending. We have some tremendous businesses in Northern Ireland. Do not underestimate the skill with which the private sector is driven. We have top-class businesses, although not enough of them. One of my campaigns has involved working with local Ministers and businesses on a coalition manifesto commitment to produce a Government paper and consult on the possibility of re-balancing the economy and, possibly, devolve the levying of corporation tax to the Stormont Assembly. A ministerial working group is carrying out a detailed investigation of the cost, mechanics and manner by which we could legislate for these proposals.
Another theme in respect of which we are keen to work with local Ministers is following up the advice given by the Prime Minister to the Stormont Assembly last year to the effect that we would like to see a shared future rather than a shared out future in Northern Ireland. I am sure members will be aware of the severe segregation and polarisation that continues to obtain in Northern Ireland. In the education sector, 85,000 school places remain empty because certain schools from different traditions are no longer viable. We would like to work with local Ministers and encourage difficult decisions to end this polarisation. More than 90% of those in public housing are segregated. These are long-term issues but they need to be addressed. We have an opportunity to do so in the context of stability in Stormont and encouraging statements given verbally by the First Minister and Deputy First Minister and contained in the draft programme for Government in regard to community division. Last week the Tánaiste and I discussed the possibility of a peace IV programme. One of the matters we discussed with the First Minister and Deputy First Minister was a review of the large number of community programmes which help to address community division. That is a worthwhile and long-term initiative. Nobody underestimates the difficulty or cost of what is involved, however. A survey by Deloitte estimated the cost of division at £1.5 billion sterling per annum.
Another area in which we can work with members and, certainly, with local Ministers, is the issue of commemorations. We are about to embark on a decade of centenaries, some of which are controversial and will provoke strong opinions. Together they form a pattern resulting in the position I have just described, which I suggest is the best position we have occupied together for decades. I had a good meeting this morning with the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, and I have discussed the matter previously with the Tánaiste and with the Minister of State at the Department of Finance, Deputy Brian Hayes, at a meeting in Cambridge. When I visited Dublin recently we went to Islandbridge. I was delighted to see how closely we share the view that the centenaries could be very beneficial if handled sensitively. They could be educational in terms of correcting facile or simplistic understandings of what happened during these events. It is tremendous that proposals have been made to begin the centenaries by commemorating the events around the covenant. Recognition of an event does not necessarily mean one is commemorating it or abandoning one's own tradition. One is, however, showing a broader approach by paying attention to it. If we could work together in that spirit we could set the tone for these events so that they can be educational and, ultimately, beneficial. We had a glorious example of how this should be done - I do not see how we can improve on it - when her majesty the Queen and the President worked together on a spectacularly successful celebration of what could have been a very contentious centenary. All of us would agree that, thanks to these enormously respected Heads of State, very good relations between our two countries have become even better.
On that high note, I thank the committee for inviting me to speak and I will try my best to answer members' questions without breaching the rules of privilege.