Ed Balls replaces Alan Johnson

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 to quit.

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.

In a letter to Miliband, Johnson said:

""I have decided to resign from the Shadow Cabinet for personal reasons to do with my family.

"I have found it difficult to cope with these personal issues in my private life whilst carrying out an important front bench role.

"I am grateful to Ed Miliband for giving me the opportunity to serve as shadow chancellor of the Exchequer.

"He is proving to be a formidable leader of the Labour Party and has shown me nothing but support and kindness.

"My time in Parliament will now be dedicated to serving my constituents and supporting the Labour Party.

"I will make no further comment about this matter."

In his response Miliband said:

"I wish you all the best at this difficult time. I know you will continue to make a major contribution to public life and the Labour party."

Labour sources have made clear that Johnson's resignation was not political.

Johnson has been an MP for Kingston upon Hull West and Hessle since 1997. Today he said he intends to continue as an MP.

A former postman, Johnson rose through the ranks of the union movement to become general secretary of the CWU.

Tony Blair brought him into government in 1999 and into the cabinet as work and pensions secretary in 2004.

Under Gordon Brown he served as health secretary and then home secretary.

Miliband paid tribute to Johnson's record.

"As shadow chancellor and a politician who held five cabinet positions, Alan showed real leadership on issues that mattered to families across our country, warning of the dangers posed by the government's gamble on growth and jobs, promoting educational opportunity and delivering neighbourhood policing," he said.

"Ed Balls is an outstanding economist and is hugely qualified to take our economic message to the country."

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