Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank everybody who has contributed to this interesting debate. I am not sure anybody has the complete answer. We have to try. We can see what is happening. There is a real problem with cities and towns throughout the country. The centres of our cities and towns, with exceptions like Dublin, Galway and Cork, are dying. I am not sure what the answer is. I am not sure what degree of answer these initiatives will supply.

It is not correct to say the Government is abandoning other regeneration projects. The regeneration of Moyross, which was mentioned by Senator Cullinane, is moving ahead far more progressively than it was in the past. The Minister of State with responsibility for housing, Deputy Jan O'Sullivan, gave the keys of new houses to 30 or 40 residents two weeks ago. Now that the first phase, which merely involved the demolition of houses, is over, that project is delivering by rehousing families in modern accommodation.

The problem in Limerick was aggravated by the fact that three local authorities - Limerick City Council, Limerick County Council and Clare County Council - were making planning decisions. As part of the merger of the two main local authorities, the headquarters of the new authority will be located downtown at the new City Hall. The real problem is the doughnut effect, whereby the city centre is derelict as a result of activity being allowed to move to the outer suburbs, which happen to be administered by a different local authority. The planning decisions that were made by that authority drove the doughnut effect and aggravated it more.

When we assessed the main towns in Ireland, we found that Limerick and Waterford came at the bottom in terms of all social statistics. We decided those cities should be prioritised in the event of any intervention. We have provided documentation in support of this decision. I do not know whether the approach we are taking will work. The idea is to create living cities again. We want to provide incentives not to developers but to people who might be prepared to refurbish houses to live in. Unlike under section 23, the tax benefit will accrue to the owner-occupier rather than to the developer. People who live in cities need small shops and retailers. The owner-occupier is being incentivised under this aspect of the tax break as well.

This scheme is being introduced on a pilot basis. If it is successful, we will consider extending it to other towns and cities. It would be difficult to get EU permission for a wider scheme. That is why we have assembled this scheme in such a limited way. While the area of Georgian architecture on the south side of Dublin has been well developed, some of the Georgian architecture in the Mountjoy Square area of the north inner city is not in very good condition. I know that an application to operate a pilot scheme in the capital city would not get through Brussels. We are more likely to get this pilot scheme though because we have statistics to show that the Georgian areas of Waterford and Limerick are in a pretty bad state.

We intend to enact these provisions now before undertaking a cost benefit analysis in support of our efforts to overcome any state aid problems at European level. If Europe signs off on the scheme, it will be available from 1 January 2014 - it will be an issue for the next calendar year - and then we will see how it works. If it works, we will be prepared to extend it to the centres of other towns. If it does not work, we will have to try something else.

There is no denying that there is a problem in this regard. It will not be remediated by the market. If we rely on market forces, the place will fall down. The market solution would be to allow the place to fall down and move to a low-cost environment on the edges of the city. Such locations have certain advantages, such as flat fields, low cost bases and free car parking around supermarkets, that are not found in cities. Intervention is needed because the market will not solve it. We hope this set of interventions will help. We will monitor and measure this initiative as we go along. If it works, we will be prepared to extend it.

One can complain and whinge forever. If one stands back to look at problems for too long, one will allow them to continue to get worse. One has to try possible solutions. I do not think every solution will necessarily work. We have to try solutions to the problems we see. We have to give it our best shot. That is the position. We are not bringing back a raft of tax incentives like section 23 for developers. That is not the purpose of this initiative. Its purpose, as suggested in its name, is to create living cities where families live and to ensure the shops and ancillary services they need are provided within that environment. I hope it works. If it does, it does. If it does not, we will have to try something else. If it works, we will expand it from the pilot phase to other locations.