Michael McDowell (Independent) | Oireachtas source

This debate is a valuable one. What the Minister has just said is in general something with which I can sympathise considerably. I fully accept that to cut capital gains tax from 40% to 20% in 2002 is possibly different from the scenario the Minister now faces where there is a massive amount of money sloshing around looking for places to land and where inflationary pressures are high. I am totally conscious of the cyclical and countercyclical implications of changes to capital gains tax. However, I make the point, which I am glad the Minister accepts, that to have a levy of the rate of 20%, 33% or 40%, as some of the recommendations suggest, does have market implications. Looking back to what happened when Charlie McCreevy took the bold plunge and said he was going to cut capital gains tax by half, he got a 500% yield. That cannot be forgotten. Maybe I am wrong on this but I assume that in the Department of Finance's files there are plenty of advices and memos stating the then Minister should not do this, that we would not get any extra money from it, that we would lose a lot of money and all the rest of it. In fairness to the very decent civil servants in that Department, that is the way they conservatively think in relation to rate reductions.

My second point is there really is a danger now that somehow, entirely simplistic snake oil solutions are being sold to the Irish people as to how the home building and housing crisis can be solved. In that context, I do not believe the present Government understands some of the things it is actually doing. In 2009 the then Minister, John Gormley, was persuaded by Threshold, a housing charity, to abolish bedsits. Across Dublin, in areas the Minister represents and in the one where I myself live, between 10,000 and 15,000 dwellings were extinguished by market forces because private landlords could not adapt old houses to the new requirements. It was well intentioned. I am not saying this in any way crabbedly about the then Minister. He was being urged by a charity to improve standards of accommodation. However, those involved did not look around the corner and see they were bringing about the extinction of an entire category that was the lowest and second-lowest rung of the housing market right across Dublin. I hope I am not revealing a terrible secret, but I live on Charleston Road in Ranelagh. Across the road from me is a series of large redbrick houses. When I originally went to live on Charleston Road, all those houses were divided into bedsits, as far as I could see. I used to canvas for both Fine Gael and the Progressive Democrats and knew what it was to go up to the hall door and see a thing that looked like an accordion, given the number of bells on it you could or could not press. When you went into the hall, because the door was left open, there were bicycles and you had to wander around the inside of the building to see was there anybody on the register still there three or five years later. By the way, when I was actively politically 15 or 20 years ago at least half of the houses on Palmerston Road in Ranelagh, now one of the wealthiest and most salubrious roads, were divided into bedsits. We changed things. To use the phrase the trendies use now, we gentrified Dublin. We handed over the market forces to those who had the capital to buy those houses and to turn them into trophy homes.We told the private landlords who took their rents from providing for the lowest rung on the rental ladder to get out of the business because they were no longer required. The moral of that story is one can do the wrong thing for all the right reasons. One can drive people out of a market and change a market in this way.

I mention that because the Minister referred to Dominick Street. I was going across from my place in Ranelagh to the Broadstone Luas station in King's Inns recently and saw the development on Dominick Street. I also saw across the inner city something which was apparent to me when I was Minister for justice, that is, that the area the Minister represents has atrophied rather than prospered in the last 30 years in many respects. Gentrification is happening by degrees and only a fool would ignore it but north inner-city Dublin is a different world from south inner-city Dublin.

The Minister mentioned the role of local authorities in Dominick Street and, God bless them, they are doing some good work there but there is a blight across north inner-city Dublin. The Minister only has to open his eyes, look around and realise that it and areas of south-west inner-city Dublin are underdeveloped and in trouble, socially and economically.

When I was a colleague of the former Taoiseach, Bertie Ahern, in government, it struck me that he did not seem to have a sense of discontent about the state of north inner-city Dublin. He seemed to like it the way it was. Perhaps he was wise to do so. He got an enormous vote out of it. My view was that from the canal to the Liffey on the north side should be as prosperous and vibrant a property market as from the canal to the Liffey on the south side.

That brings me to the following point, which I would like the Minister to take on board. He sits at a cabinet where the Department of housing and whatever it is - we will call it the Custom House for short - is represented. The Minister, Deputy Darragh O'Brien, is doing his best to bring new thinking and dynamism to its activities but let it never be forgotten that over the last 20, 25 or 30 years, those in the Department did everything they could to get local authorities out of housing provision. Any compulsory purchase order, they sat on it. They did their best to ensure local authorities did not engage in the level of housing provision that happened at the time.

I will finish on this point. I know I am straying a tiny bit away----