Ex-Bank of England chief tells Starmer Labour's tax hikes could make UK communist

Former Bank of England boss Mark Carney has urged Sir Keir Starmer to stop taxing Britain's middle class or risk turning the UK into a far-left extremist country. Sir Keir and Mark Carney, who is now the Canadian Prime Minister, exchanged rugby jerseys on Friday ahead of a clash between the two nations in the Women's Rugby World Cup final today (Saturday).

The two leaders, who are both left of centre politicians, were also meeting for bilateral talks at the Global Progress Action summit in London, which were also attended by the socialist-leaning Prime Minister of Iceland, Kristrún Frostadòttir, and Australian PM, Anthony Albanese.

Mr Carney said the cost of living crisis in the UK and stagnant wage growth meant that the country was in a similar state to the mid-19th century when the pioneer of modern Communism, Karl Marx, was living in London.

He said: "The reality of what you inherited, 15 years without real wage [growth], without people getting ahead - the last time that happened was the middle of the 19th century.

"Karl Marx was writing The Communist Manifesto in the British Library - there is a connection here. You've got to deliver real wage growth, first and foremost."

The Telegraph reports, Mr Carney added: "The first thing we did, we cut taxes for the middle class, cut taxes for 22 million Canadians, we cut a tax effectively for young Canadians when they are buying their first-time home, cut taxes on carbon, the direct carbon tax, which had become a divisive issue ... In textbook it was a good policy, but a divisive issue."

Unlike our Canadian counterparts, ordinary Britons have not enjoyed tax cuts, with Rachel Reeves's first Budget delivering record-breaking rises amounting £40 billion last year, including raids on employer National Insurance contributions, and cutting allowances for non-resident very high earners.

Mr Carney's comments come as CS Venkatakrishnan, the CEO of Barclays, urged the Chancellor Rachel Reeves not to tax economic growth "out of existence" ahead of her next Budget in November.

In an interview with CNBC, he said: "It stifles competition, stifles growth. You need to encourage it to grow, not tax it out of existence."

In a statement Barclays Bank also warned small British businesses are reluctant to invest due to a lack of confidence in the economy and fears of further tax hikes, leaving billions of pounds of untapped spending potential.

If small and medium-sized enterprises (SMEs) invested at the same rates as larger firms, around £60 billion of new investment could be unlocked per year in the UK economy, according to estimates by the bank.

Barclays said increased business costs resulting from last year's autumn budget had a significant effect on SME business confidence into 2025.

Between the third quarter of 2024 and the second quarter of 2025, the proportion of SMEs which felt positive about the current climate dropped from 48% to 36% while economic uncertainty rose sharply, the bank said.

A Treasury spokesman told the Telegraph: "The Chancellor has been clear that the financial services sector is at the heart of our plans to grow the economy."