Europe Calls On UK Govt To Increase Taxes
The European Commission has urged the UK Government to raise taxes and rein in its Help To Buy scheme.
The European Union's executive body called on the Government to increase the amount it collects in taxes to help it cut the deficit, saying policy had so far been "heavily skewed" to spending cuts.
Setting out their 2014 economic policy recommendations for the UK, commissioners said the coalition should be "prioritising capital expenditure" to boost the "fragile" recovery.
Many of the recommendations concern the housing market, including a call for more houses to be built and for adjustments to Help To Buy, which many have warned is causing a potentially damaging housing bubble.
A report from Nationwide released on Tuesday showed house prices had risen for the 13th month in a row.
The "regressive" council tax system was also in the Commission's sights.
The Commission said: "At the moment, increasing property values are not translated into higher property taxes as the property value roll has not been updated since 1991 and taxes on higher value property are lower than on lower value property in relative terms due to the regressivity of the current rates and bands within the council tax system."
The Commission broadly praised action on extending childcare provision and reforming welfare, but said more must be done on apprenticeships and skills.
Recommendations on economic policy have been made for all countries. It comes after the European elections were dominated by anti-EU sentiment, with people protesting about the powers of the unelected European Commission.
Prime Minister David Cameron described the EU as "too big, too bossy, too interfering" last week, but a Treasury spokesman said the recommendations were "in line" with the Government's approach.
Mr Cameron is currently battling moves to appoint arch federalist Jean-Claude Juncker to president of the Commission, as he tries to renegotiate Britain's deal with the EU.
The Prime Minister reportedly warned at the weekend that the UK could quit the union if Mr Juncker was appointed.
The Commission's economic suggestions have provoked anger among politicians and some campaigners.
Matthew Elliott, chief executive of Business for Britain, said: "This is further evidence that the EU should be let nowhere near tax policy of its member states.
"Leaders in Brussels appear not have taken on board the resounding message from the recent elections that Britain wants less interference from the continent, not more."
A Treasury spokesman said: "The Government's long-term economic plan is working, delivering economic security for hardworking people.
"The European Commission continues to support the UK Government's strategy including its commitment to deficit reduction. The Commission's recommendations are in line with the Government's approach."