Carney Urges Starmer to Cut Taxes as UK Faces Economic Crossroads

Mark Carney, the Canadian prime minister and former Bank of England governor, has delivered a pointed warning to Sir Keir Starmer and the UK government. Addressing the Global Progress Action Summit alongside world leaders from Iceland and Australia, Carney argued that tax cuts for the British middle class are essential to counter rising discontent and prevent a swing towards extreme politics on both the left and right.

Carney drew a striking historical parallel, noting that Britain has now endured fifteen years without meaningful wage growth, a scenario reminiscent of the mid nineteenth century. He highlighted how such stagnation then provided a backdrop for Karl Marx to pen The Communist Manifesto — an uncomfortable echo for contemporary policymakers. Carney insisted that real wage growth must be the first priority for Starmer’s government if it wishes to restore faith among working families.

Sharing his own experience, the Canadian prime minister outlined the fiscal policies he has championed at home, including slashing middle class taxes, providing relief to first-time house buyers, and addressing contentious carbon policies. In contrast, the UK’s most recent Labour Budget was defined by record tax rises totalling £40bn annually, a move that has drawn criticism for making life less affordable for millions of households.

Carney explained that these tangible policy changes in Canada are beginning to ease the cost of living and restore a sense of financial security for ordinary citizens. He acknowledged the formidable economic challenges facing his own country, not least the ongoing trade tensions with the United States, but indicated that these tax reductions are playing a key role in bolstering public support and social stability.

With the UK’s national debt hovering just above 100 percent of GDP, and Canada’s even higher, both nations are confronting similar fiscal constraints. Still, Carney has pledged to shield core welfare spending with pensions and jobless benefits protected, whereas Britain’s growing debt servicing costs are threatening wider retrenchment. As Rachel Reeves, the Chancellor, prepares for the British Budget in November, speculation is mounting that tax increases could again feature prominently in government plans.

Starmer, for his part, suggested at the same summit that Labour’s traditional focus on redistribution alone is no longer sufficient. He called for policies that not only support those in need but also empower communities to generate and retain wealth. The debate over taxation and economic fairness is clearly far from settled, with each side of the Atlantic offering contrasting solutions to a common malaise.