John McDonnell under fire by Labour MPs after giving George Osborne a copy of Chairman Mao's Little Red Book

He provoked uproar when he read from the famous collection of writings and threw the book towards Mr Osborne’s Commons despatch box

The shadow Chancellor John McDonnell came under fire from senior Labour MPs after he brandished Chairman Mao’s Little Red Book during a scathing attack on George Osborne’s handling of the economy.

He provoked uproar when he read from the famous collection of writings by the founder of Communist China and threw the book towards Mr Osborne’s Commons despatch box.

Producing the work in an attempt to embarrass the Chancellor over the sale of British assets to China, he quoted from the book and said: “I thought it would come in handy for you in your new relationship.”

Mr Osborne opened it, quipped that it was Mr McDonnell’s “personal signed copy” and added: “The problem is half the Shadow Cabinet have been sent off to re-education.”

Labour aides later stressed that the shadow Chancellor’s actions were obviously a joke and that the Little Red Book did not reflect the party’s thinking, but the episode dismayed centrist MPs.

Chuka Umunna, the former Business Secretary, said: “I haven’t quoted a communist before and I have no intention of doing so in the future.”

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Silkscreen portraits of Chairman Mao by Andy Warhol in the Staedtische Galerie in Rosenheim, Germany (EPA)

The previous shadow Chancellor, Chris Leslie, told MPs he was more “more interested in the wisdom that is contained in the Big Blue Book from the Office for Budget Responsibility” which sets out the spending figures.

Responding to the Autumn Statement, Mr McDonnell said voters would feel “absolutely betrayed” by Mr Osborne for failing keep promises to eliminate the deficit and get debt falling. He said: “Over the last five years there has barely been a target the Chancellor has set which he hasn’t missed or hasn’t ignored.”

He lambasted the aborted move to cut tax credits by £4.4bn as a “fiasco” and said the plans had been drawn up at the same time as inheritance tax was reduced for the wealthiest families.

Mr McDonnell said the decision to protect police budgets had been forced by opposition pressure, arguing: “We know the first line of intelligence collection and prevention and response are the local police officers in the community so we claim today as another Labour gain and victory.”

The shadow Chancellor, who frequently struggled to make himself heard in the Commons, claimed the Government had invested so little in skills and infrastructure that the country’s future has been put at risk.

He said: “What we’ve seen today is the launch of a manifesto for the Conservative leadership election.”

Addressing Mr Osborne’s potential rivals to succeed Mr Cameron, he said: “Don’t worry – the economic reality that's emerging in our economy will mean that this is seen as the apex of the Chancellor's career.”

Kenneth Clarke, the former Conservative Chancellor, congratulated Mr Osborne for “sticking unswervingly despite all the recent difficulties to his commitment to a balanced budget over the cycle”.

But Stewart Hosie, the SNP’s economy spokesman at Westminster, said nothing could “camouflage the failure of the past five years” and claimed working people are suffering most under the Government.

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