Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I thank the witnesses for their detailed responses. I do not want to go back to the countercyclical issue because it is important to acknowledge that the difficulties the State had after 2008 were not because of a lack of borrowing capacity or a lack of Exchequer revenue; they were because of decisions taken to use the borrowing capacity and Exchequer revenue to hand to do something else. For example, we had the National Pensions Reserve Fund with €30 billion. That money was available for a range of measures but the Government made policy decisions to use the money to recapitalise banks.

Likewise, with regard to the borrowing capacity of the State, in 2008 our debt-to-GDP ratio was 42%, which was well below the Stability and Growth Pact rules. The State had a capacity to borrow and, in fact, it took on the liabilities of Anglo Irish Bank with the promissory notes. The only reason I say this is not to rehearse the history of it but to state that at that point in time, economic difficulties notwithstanding, the State had significant borrowing and spending capacity but chose to use it for something else. It is not the case that because we are in a recession, we cannot borrow or pump prime the economy. We just chose to pump prime and borrow for the banks rather than for housing.

I ask witnesses to look at what is happening with the approved housing body sector in the UK. It has taken on an increasingly commercial modus operandi, whereby it is engaged in building open market price houses and using the sale of those houses to cross-subsidise mid-market affordable houses as well as social houses. I attended a major conference in London recently where these bodies said clearly that they are nervous about the dip into recession and how it will constrain their ability to generate revenue to invest countercyclically. In fact, the one model that is not unlike that of the witnesses, albeit without the land element, is telling us very clearly there is a danger to this model and I do not hear this being recognised.

To go back to the added value, if I get it right, good local authorities can co-ordinate among themselves and it is about the "financing structure", to use Mr. Coleman's words.

This really refers to the LDA's ability to find affordable rental and purchase properties off-balance sheet. The nub of the matter is that is what it brings to the table; therefore, rather than a local authority or an approved housing body having to borrow, as happened in the case of the project on Enniskerry Road, off-balance sheet development is the key. That is my interpretation of what Mr. Coleman said.

My point about the economic and non-economic bits of the Bill is that they are not with what state aid rules are concerned; rather, they are concerned with two types of economic activity. They are economic activities which are commercial and general economic activities which are non-commercial. Market price housing is in the first category, while social and affordable housing is in the second. Is there a concern that mixing the two and having one agency overseeing the development, delivery and sale or allocation of the housing will fall foul of state aid rules? Is this something at which the LDA is actively looking? In my limited knowledge of these matters, this will be one of the big hurdles the agency will faces when it comes to engage with the Commission.