Shadow chancellor John McDonnell will pledge an “irreversible shift” in wealth in favour of working people, as Tories warn Labour’s “fantasy economics” would wreck the recovery.

In his first speech of the General Election campaign, Mr McDonnell will say that if Labour gain power on December 12, they will deliver a programme of investment “on a scale never seen before in this country”.

However his Conservative counterpart Sajid Javid will accuse Mr McDonnell and Jeremy Corbyn of behaving like “anti-vaxxers” on the economy.

In an speech in Manchester, he will say a Labour government would take “every step imaginable” to make the country “sick and unhealthy” again.

The clash over the economy – one of the key election battlegrounds – takes place as Mr Corbyn appeared to strengthen his grip on the party with the shock resignation of deputy leader Tom Watson.

Mr Watson, who is not standing again for election, said he was stepping down for “personal not political” reasons, and would be campaigning in future on health issues.

However his departure will be seen as a blow to Labour “moderates” whose cause he championed in frequent clashes with Mr Corbyn.

In other developments:

– Boris Johnson will make his first foray of the campaign into Scotland where the Tories are fighting to hang on to seats won in the 2017 election. Mr Johnson will also be campaigning in the North East and Northern Ireland on Thursday.

– The Liberal Democrats, Plaid Cymru and the Greens will announce details of a pact not to stand against each some seats, thought to number between 60 and 70.

– Jeremy Corbyn will unveil Labour’s campaign bus, featuring the slogan “It’s time for real change”.

Speaking in his home city of Liverpool, Mr McDonnell will announce plans for a “social transformation fund”, investing £150 billion in schools, hospitals, care homes and council housing over five years.

At the same time he will promise to break up the Treasury, devolving some of its powers to the North in a shift in the “centre of political gravity” away from London.

Treasury ministerial meetings will no longer take place solely in the capital and ministers will have an office in the North as well as Whitehall.

“Our aim as a Labour government is to achieve what past Labour governments have aspired to,” he will say.

“An irreversible shift in the balance of power and wealth in favour of working people.

“That means change, means investment on a scale never seen before in this country, and certainly never seen before in the North and outside of London and the South East.”

However Mr Javid will say that Labour’s plans would put at risk a “decade of recovery” under the Conservatives.

“Jeremy Corbyn and John McDonnell are like the anti-vaxxers of economic policy,” he will say.

“Not only did they reject the treatment needed to heal our economy and get the deficit down by four-fifths, they now want to take every step imaginable to make the country sick and unhealthy again.

“After a decade of recovery, of difficult decisions, we can’t let Labour turn back the clock, let spending get out of control and make hardworking families pay the price.”

His speech echoes Mr Johnson, who launched an attack on Labour’s “Bolivarian revolutionary socialism” and “deranged” £196 billion re-nationalisation programme at a rally in Birmingham on Wednesday.

The Prime Minister was seeking to get the Tory campaign back on track after a chaotic start, following the resignation of Welsh Secretary Alun Cairns over his links to an aide accused of sabotaging a rape trial.

The Leader of the Commons Jacob Rees-Mogg also had to apologise after insensitive comments about the victims of the Grenfell Tower fire.