Mark Carney has urged Sir Keir Starmer to slash taxes on Britain’s middle class to stop them lurching to extreme politics such as communism.

The Canadian prime minister told his British counterpart that easing the burden on Middle England and reducing the cost of living was critical to winning back public support for Left-leaning political parties.

Mr Carney, a former governor of the Bank of England, warned that the UK was suffering a prolonged economic malaise similar to challenges which prompted the emergence of communism in the 1800s.

The Canadian leader was speaking on a panel of Left-leaning world statesmen alongside Sir Keir, as well as the prime ministers of Iceland and Australia, at the Global Progress Action Summit.

He told Sir Keir: “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.”

Mr Carney, who was elected as prime minister of Canada in March, 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.”

It stands in stark contrast to the Labour Government’s first Budget in the UK last year, which featured record-breaking tax rises amounting to £40bn per year.

Mr Carney described his tax cuts as “very tangible things which directly affected affordability and the cost of living. Those are fiscal choices but they had to be made and they are delivering and people are beginning to feel them”.

He is preparing to deliver a budget next month against the difficult economic backdrop of the trade war with Donald Trump’s administration in the US, which is far and away Canada’s biggest trading partner.

Mr Carney has told voters to anticipate both “austerity and investment” when his government sets out its plans.

Canada’s financial position is similar to Britain’s. The UK’s national debt stands at just above 100pc of GDP, on the International Monetary Fund’s measure, with Canada’s at 110pc.

However, Mr Carney has pledged to protect welfare spending, including pensions and jobless benefits, while Britain is facing a bigger crisis in ballooning payments.

Britain faces its own Budget in November, when Rachel Reeves, the Chancellor, is expected to have to find around £30bn to fill the latest hole in the public finances.

Tax increases, rather than Mr Carney’s tax cuts, are expected to form the majority of the measures, with increasing speculation that income taxpayers could bear the brunt.

Sir Keir told the conference that the traditional Left-wing obsession with redistribution from the rich to the poor fails either to support those in need to improve their own prospects or to grow the economy.

“We for too long lost our way – we thought that redistribution was the only thing that mattered for fairness – you create wealth and then you redistribute and that is a one-word answer. For too many of our communities it isn’t,” the Prime Minister said.

“They want the pride to stand on their own two feet, they want the wealth to be in their community.”

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