John McDonnell says he was "shocked" when he heard Amber Rudd refer to Diane Abbott as a "coloured woman" in an interview today.
Appearing on the drive show with Eamonn Holmes, the shadow chancellor said he found the comments "upsetting".
"I just thought that expression was generally accepted as being offensive to people, so when she came out with it I think all of us were shocked," Mr McDonnell said.
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"I know Amber, we've jostled across the Chamber on different debates so we were all shocked about the language."
Ms Rudd has since apologised for her choice of phrase, writing on Twitter that she was "mortified".
"We all have to learn lessons about our language and it sort of seemed to be a harp back to some distant past," he added. "Amber has apologised now but yeah, it was upsetting."
"Mind you, we did have another Conservative MP not long ago use the n-word as well, so you think is this betraying some inner doubts, inner concerns or inner beliefs?".
On Labour antisemitism
WATCH: John McDonnell addresses Labour antisemitism allegations
Addressing allegations of Labour antisemitism, Mr McDonnell said he admitted the party had "got a problem".
"I've been one of those people saying no matter how small it is, even if it was just one person, it doesn't matter. We've got to eradicate it," he said.
- Read more: Labour may face statutory investigation over antisemitism
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The shadow chancellor said he thought Labour had been "too slow" to acknowledge allegations, and "not ruthless enough" in dealing with those who stand accused of antisemitism.
"We will rid ourselves, we will I tell you. I'm adamant," he told talkRADIO's Eamonn.
"We're going to come out of this as the anti-racist party we've always prided ourselves on being."