PHILIP Hammond has warned that Jeremy Corbyn and his socialist policies pose a “clear and present danger” to Britain’s economic prosperity.

In his keynote conference speech, the Chancellor denounced the Labour leader’s “Marxist” outlook, warning that it threatened "not only our economic progress but our freedom as well".

And he said he relished the coming debate with Labour’s "dinosaurs," whom he branded "a political version of Jurassic Park", telling Mr Corbyn: "Bring it on."

Mr Hammond warned a "wicked and cynical" Labour leader was offering "superficially simple solutions to complex challenges" but that his policies would "inevitably lead us back to where Britain was in the late 1970s" when tax rates reached as high as 98 per cent.

He urged Conservative activists to take on the argument voiced at Labour's conference in Brighton last week that the capitalist economic model, which had held sway since the time of Margaret Thatcher, had failed.

Contrary to the claims of John McDonnell, the Shadow Chancellor, the free market economy remained "the best system yet designed for making people steadily better off" and Britain's economy was "fundamentally strong", argued Mr Hammond.

But he acknowledged the damage inflicted by the tortuous process of Brexit.

"We face an immediate challenge as we move ahead," he told Tory activists.

"The process of negotiating our exit from the EU has created uncertainty, so investment has slowed as businesses wait for clarity. So, before we can reap the benefits of our strong economic fundamentals and the investment we are making in the future, we must remove this uncertainty."

The Chancellor, who campaigned for Remain in the 2016 referendum, said he respected the result and accepted the UK Government's job was now to implement the decision of the voters.

But he added: "They didn't vote to get poorer or to reduce trade with our closest neighbours and biggest trading partners.

"The British people have chosen independence over integration and as we implement their decision, we must use that independence in our nation's best interest to protect our jobs, to strengthen our economy and to safeguard our prosperity."

Mr Hammond added: "Our economic future will remain closely linked with the EU for many good reasons but our political future will be our own.

"Our EU partners can go their way, we wish them well, but we will not join them on a voyage to ever closer union."

In response, Mr McDonnell said the Chancellor was "continuing down the path of his predecessor and clinging to an old economic model that fails the many".

The Chancellor's reliance on "baseless smears" against Labour "betrays how fearful the Tories are of the challenge posed by Jeremy Corbyn", he added.