Government?s announcement that it is setting up an economic empowerment zone in North Hamilton with the assistance of HSBC-Bank of Bermuda is welcome news.

It would be churlish to point out that this scheme has been a long time coming, and that in parts it copies the proposals made by the Opposition United Bermuda Party both in its 2003 election platform and in its recent proposals on economic empowerment; suffice to say, Government deserves credit for acting on it and accepting that no party has a monopoly on wisdom.

The scheme means that businesses north of Victoria Street between Parliament and King Streets will have access to business advice and may also have access to equity investments from the bank.

The businesses could also get financing to expand their businesses and to buy new equipment, according to Finance Minister Paula Cox and Bank chief executive officer Philip Butterfield.

So far, so good.

It is fair to say that some businesses have not always had access to either capital or credit. The causes of this are many, and this scheme, provided it is managed effectively and carefully, should allow entrepreneurs with sound business plans to flourish at the same time that it injects new life onto the northeast part of Hamilton.

Hamilton has boomed in the last two decades, but the boom has largely excluded the ?back of town?.

It is ironic that this means that, outside of Front Street, this part of Hamilton now has the most interesting and oldest architecture in the city, and that it is here that the street life tends to be the liveliest, albeit also more dangerous than elsewhere in town.

The challenge, in part, for businesses and residents is how to improve ?Back of Town?s? economy, which includes making it safer, without reducing its spirit. That won?t be easy.

But Government could and should consider offering limited tax incentives to businesses that operate in this zone. Reducing land tax would encourage landlords to improve their properties, and reducing payroll tax for businesses located in the zone would encourage employment.

These measures ? which should have time limits attached and thus a hand-up and not a handout ? could then help to force the more unsavoury elements who populate the area out. Drug dealers and the like do not do well when they are surrounded by hard working people and business owners. And house-proud homeowners will be less tolerant of people loitering on their doorsteps.

It goes without saying that more active policing must be a part of the plan as well.

So far this scheme seems only to encompass businesses, and it is unfortunate that it has not focused on housing as well. The UBP (them again) also proposed tax breaks and zoning changes for residential development and it is unfortunate that Government has not taken up these ideas as well.

One way to ensure that the businesses in the area survive and thrive is to ensure that they have a market to serve. Encouraging more residential development ? and the restoration of the many fine buildings in the area ? would help to do this and would solve two problems at once.

There is a real risk that this would result in ?gentrification? and would force some poorer people out. Tying developments to the construction of affordable housing would help to prevent this from happening.

Government has taken some small steps towards raising up North Hamilton. More can and should be done.