John McDonnell says Tory claims of £45bn ‘black hole’ in Labour spending plans are 'lies'

Shadow Chancellor confirms the party will target both large companies and rich individuals for tax hikes, but insisted 'I’m not saying £70,000'

John McDonnell has branded Conservative claims of a £45bn ‘black hole’ in Labour spending plans “lies”, as the election campaign finally focused on the economy.

The Shadow Chancellor also confirmed Labour will propose tax hikes for big-earners, but denied anyone earning over £70,000 would be hit.

Today, the Tories will revive their ‘tax bombshell’ campaign poster from past elections, featuring Jeremy Corbyn in front of a missile threatening “more debt, higher taxes”.

A 15-page dossier will claim there is a £45bn gap in Labour's tax and spending plans, which would amount to £1,667 for every household in the country.

But Mr McDonnell ridiculed the calculations for failing to separate revenue spending from capital investment, which would not impose day-to-day costs.

“In common parlance, people would call what the Tories have published today lies,” the Shadow Chancellor told BBC Radio 4’s Today programme.

“I’m shocked that the BBC has just taken a Conservative press release and repeated it all morning.”

Pointing to the £45bn claim, Mr McDonnell added: “They have included £35bn of capital spend. I’m amazed the Chancellor of the Exchequer can’t distinguish between capital and revenue spending.”

He insisted Labour’s spending plans – once fully revealed in the party’s manifesto, later this month – would be more detailed and rock-solid than those of any other party.

“I have got a reputation for being a hard-nosed bureaucrat – both in my professional life in the past and also politically

“I give this assurance. It is about a language of priorities. Our policies will be fully costed and their funding source will be identified.”

Earlier this month, Mr McDonnell suggested anyone earning more than £70,000 qualified as rich, suggesting they would be in Labour’s sights for higher taxes.

Today, he confirmed the manifesto would target both rich individuals and large companies for tax hikes, but insisted: “I’m not saying £70,000.

“I’m saying, on the higher percentage earners, you will see that we will be asking people – particularly the corporations as well – to bear a bit more of the burden

“We cannot go on the way things are going, in terms of the NHS in crisis, education cuts happening on a scale we have not seen since the 1970s.”

Mr McDonnell also attempted to draw a line under yesterday’s blunder by Diane Abbott, the Shadow Home Secretary, over police funding, insisting: “It’s covered completely by capital gains tax.”

The Tory dossier will claim that, by 2019-20 - a Corbyn Government would have committed to spending £50.7bn, but only raised £19.4bn in new taxes.

The strapline on the poster to be unveiled this morning reads: “Corbyn: No bombs for our Army, one big bombshell for your family.”

David Davis, the Brexit secretary, said: “His many ill-thought-through promises simply don't stack up and could not be paid for.

“The damage this bombshell would do to the country's finances if Corbyn's coalition of chaos were given the keys to Downing Street would be disastrous.”