European Commission suggests how to fix the UK’s economy
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The European Commission wants the Government to increase property taxes, review Help to Buy and cut childcare costs to help boost the economy.
The European Commission (EC), the executive body of the EU, has urged the Government to tackle the “distorted” property market as one of a series of measures to help boost the economy.
In its annual Council Recommendation report – provided to member states to advise on how to achieve sustainable growth – the EC warned of a number of imbalances which require “monitoring and policy action”.
Fixing the property market
One big area that needs addressing is the housing market, according to the EC.
It notes that while the supply of new properties has risen, it remains low and “has fallen short of demand by a considerable margin”. As a result, house prices are rising. The EC wants to see the Government do more to boost supply of homes in order to tackle this problem.
It also wants to see Council Tax revamped, as it is currently based on property values from 1991. Because the property value roll hasn’t been updated since then, increasing property values are not being translated into higher property taxes, the EC argues.
Help to Buy also needs to be reviewed and adjusted if necessary to tackle house prices and mortgage debt levels.
For more information on the scheme as it stands, read Help to Buy mortgages explained.
The UK’s other issues
The EC’s report specifically highlights issues with youth unemployment, repeating the advice from 2013 that more must be done to improve the skills of young people to help them into work.
“The qualifications system,” states the report, “remains complex and needs to be streamlined to facilitate universal recognition and a higher level of engagement by employers.”
Childcare costs also need to be tackled, with the Government urged to go further than its existing childcare initiative. For more read Families to get up to £2,000 a year to help with childcare costs.
Does the Government have to listen to the EC?
This report doesn’t outline new policies. It simply sets out recommendations, not regulations, and as such they aren’t set in stone.
However, the EC’s observations of the UK’s shortcomings could be helpful in driving the direction of new policies and necessary adjustments to those that are woefully outdated, like Council Tax.
Are the EC’s recommendations sensible? Would the Government do well to heed the advice, or are we best off left to our own devices? Let us know what you think in the comments below.