Mark Carney, heed the harsh lessons from the imploding British government

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John Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods.

Judging from the opinion surveys, Prime Minister Mark Carney seems to enjoy plenty of goodwill from Canadians. His Liberal Party is polling better than it did on election day – on current figures, if an election were held today, they’d win an outright majority – nearly two-thirds of Canadians approve of the job Mr. Carney is doing and his ratings are up across the country, even in Alberta.

In short, Mr. Carney has capital to burn. If he’s prudent, he would burn it fast by taking unpopular but necessary decisions. That’s the lesson he could take from the mistakes made by another leader who took office with a powerful mandate, only to squander it quickly – British Prime Minister Keir Starmer.

One year after winning the biggest parliamentary majority in British history, in an election that delivered the Labour Party nearly two-thirds of all the seats in the House of Commons, Mr. Starmer’s government is in crisis. His party’s popularity is approaching record lows, his own approval ratings are the lowest on record for any prime minister, he can barely control his rebellious MPs, his government is floundering and the U.K.’s economic outlook is worsening.

Driving Mr. Starmer’s crisis is a simple paradox: In trying to avoid being unpopular, he made himself unpopular. During last year’s election campaign, he promised to rebuild Britain’s shattered public services, increase pensions, solve the country’s housing crisis, build infrastructure and lower the deficit, all without raising income or sales taxes or national insurance contributions (roughly the equivalent to the Canada Pension Plan contributions Canadians make).

One year in, Keir Starmer’s government is in turmoil

Mr. Starmer also promised not to reverse Britain’s decision to leave the European Union, despite the fact this alone would have raised the economic growth rate, for fear of alienating a small number of Brexit-backing Labour voters in north England constituencies.

It was hard to discern any economic strategy in all of this. It amounted to policy by focus-group – slicing and dicing the electorate to try to keep enough people happy that the party could win election. And indeed when asked what the principal purpose of this government is, strategists around Mr. Starmer still tend to reply that winning re-election is their ultimate goal.

The problem is, popular though these pledges were, it was going to be impossible to keep them all. You can have good public services or low taxes, but not both simultaneously, and it was always going to be a tall order to restart growth without reintegrating Britain’s economy with its biggest trading partner, the EU.

But rather than acknowledge that and confront the difficult decisions, the government kept trying to kick the can down the road. In last fall’s budget, it raised taxes on employer contributions to national insurance – in effect, a tax on employment. When that failed to plug the gap in the government’s finances, it was forced into making budget cuts – first to foreign aid, then to targeted welfare programs, no doubt in the hopes they could concentrate the pain on small groups of the electorate and avoid becoming unpopular.

But without any clear strategic vision of how these cuts would help restore Britain’s public services – didn’t they campaign saying they’d improve them? – backbench MPs began rebelling, thwarting one government initiative after another. Then, this week, the Office of Budget Responsibility, which plays a role similar to Canada’s Parliamentary Budget Office, released its latest update on the country’s finances. It painted an ugly picture, with the government’s debt-to-GDP ratio set to reach 270 per cent in the coming decades.

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Amid such grim prospects, the interest rates the government must pay on its borrowing have continued rising and are now the most expensive in the G7. That, in turn, affects the cost of mortgages, which only worsens the housing crisis. Despite some achievements in its first year of office, such as some improvements in waiting times at medical clinics, any good news the Labour government can deliver is now overwhelmed by a sense of drift. It has reached the point that backroom talk of a parliamentary rebellion to replace Mr. Starmer as Labour leader, and thus as Prime Minister, has begun.

Trying to avoid unpopular decisions has now forced Labour into a corner. Mr. Starmer would have done better to study Margaret Thatcher’s playbook, when as prime minister she promised bitter medicine which would, in time, make a better country. Whether or not one shares the vision she had for Britain, her voters bought it and the political strategy at least worked.

Canada faces tough choices about what direction it will take in a very challenging time. Avoiding unpopular decisions might seem a sensible way to avoid losing office. But as Keir Starmer has revealed, we live in a time when those who avoid the unpopular decisions will have them made for them.