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Ed Balls replaces Alan Johnson as shadow chancellor

21st January 2011

Westminster was caught off guard by Alan Johnson's resignation as shadow chancellor yesterday afternoon, a move that has prompted a fundamental realignment of power within Labour.

Johnson cited "personal reasons to do with my family" as the cause of his decision.

It is reported that Johnson's former police protection officer Paul Rice is to be suspended from his current role looking after home secretary Theresa May amid allegations he had an affair with Johnson's wife.

Ed Miliband is said to have been told of Johnson's intention to step down on Monday an is reported to have tried to convince him to stay on.

Johnson's shock resignation has forced a major shake up at the heart of the party, with Ed Balls brought in as shadow chancellor with his wife Yvette Cooper replacing him as shadow home secretary.

Balls has long craved the top financial portfolio and his appointment may signal a shift in Labour's approach to the economy – he is known to have favoured a less aggressive deficit reduction strategy than former chancellor Alastair Darling.

The close Gordon Brown ally ran for the leadership of the party against Miliband and was widely seen to have run an effective campaign, managing to step out of the shadow of the former prime minister.

Today was supposed to be all about another former Labour prime minister, as Tony Blair is back in Westminster to give evidence to the Iraq Inquiry.

Blair has been recalled to explain apparent discrepancies between the account of the run up to the to 2003 invasion and other witnesses testimonies.

The House of Commons is sitting today and MPs will debate private members bills, beginning with the second reading of Greg Knight's Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill.

In the Lords peers will debate the second reading of the Marine Navigation Aids Bill [HL] and the second reading of the Rehabilitation of Offenders (Amendment) Bill [HL].

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