This is the full response by John McDonnell, the shadow Chancellor, to the speech by opposite number Philip Hammond at Tory conference in Birmingham.

“This morning Philip Hammond may have performed a u-turn on investment spending, admitting that the failed ‘long-term economic plan’ never really existed, he still intends to go ahead with cuts to in-work benefits, and local authority funding.

“Labour is now the only national party with a fiscal frame work that supports patient long-term investment in our economy, and it’s clear that Phillip Hammond is now borrowing from Labour to invest in his own speech. As well as abandoning their own fiscal charter this was full of the same empty promises George Osborne made, only with worse gags.

“The Chancellor should apologise today for the failed Tory approach that has meant he has had to abandon the failed economic agenda of the last six years, an approach which has seen them dragging their heels on tax avoidance, an increase in child poverty, and house-building falling to its lowest peacetime rate since the 1920s. The dangerous divide in society the Chancellor mentioned has come about as a direct result of the policies he has voted for since 2010.

“There is clearly still a need for increased investment in our economy to equip our country for the future after Brexit, as well to overcome the last six years of Tory under-investment, but if they pursue a ‘Hard Brexit’ strategy we know that the Tories will continue to make working families pay for their failure.

“Therefore, although we welcome the Chancellor abandoning George Osborne’s fiscal approach, justifying Labour’s approach in opposing it, he still needs to now actually provide the investment we really need. That is why Labour has consistently called for an investment programme in line with what many independent experts are calling for, and the timing of which will be based upon OBR forecasts and the timetable for Brexit.

“Otherwise everything he said today will be undermined by the Tories’ Hard Brexit strategy that could see us facing around £40 billion risk to the public finances and put British business at a serious disadvantage.

“In contrast, Labour’s Fiscal Credibility Rule provides the robust framework needed to deliver financial stability and investment, so that our country can have a high-wage, high-tech economy of the future, in which no one and no community is left behind.”