Alan Johnson quits Labour over personal life
Major reshaping sees Ed Balls back at heart of party after shadow chancellor's resignation
A personal crisis and disenchantment with the direction of economic policy in the Labour party prompted Alan Johnson to resign as shadow chancellor today, handing Ed Miliband his greatest challenge since winning the leadership last year.
In a major reshaping of the party, Miliband announced that he had accepted Johnson's resignation "with great regret", as he was forced to carry out a reshuffle of his top team.
Ed Balls becomes shadow chancellor months after being spurned for the post by Miliband after a clash over the pace of deficit reduction. Yvette Cooper, his wife, moves from her post as shadow foreign secretary to succeed Balls as shadow home secretary.
Balls announced that he wholly endorsed the official Labour plan to halve the fiscal deficit over four years, but signalled a more aggressive attack on the coalition's cuts. The new shadow chancellor told Sky News: "For me, it is a huge and important responsibility to take on this task.
"I have been involved in the economy for pretty much 25 years now. When I was first studying the economy in the 1980s, that is when unemployment hit 3 million under Margaret Thatcher because of reckless cuts to public spending. I fear we are repeating those days now. You either learn the lessons of history or you repeat the mistakes. That's what the Tory-led coalition is doing."
"It is my job with the Labour party to take the argument to the country that there is an alternative - we don't have to do it this way. Put growth and jobs first."
Miliband had fought to persuade Johnson to remain in his post after the shadow chancellor explained to the Labour leader personal difficulties, understood to relate to the break-up of his second marriage, in a meeting last week. But Johnson, who is understood to be facing marital difficulties and has not returned to Westminster since his meeting with Miliband, told the Labour leader yest! erday th at he was determined to resign.
Labour sources said that Miliband was happy with Johnson's performance and was not bothered by recent criticisms of him. But Johnson's personal difficulties were understood to have been compounded by unhappiness as shadow chancellor. A former home secretary, who has been tripped up on basic economic policy since his appointment last October, he feared he could not change a "narrative" that he was out of his depth on economic policy. He also feared Miliband was failing to grasp the need for urgent action to tackle a record peacetime fiscal deficit.
The Labour leader has endorsed Alistair Darling's plan to halve the deficit over four years. But he has recently accused the Tories of perpetrating a "great deception" by claiming that Labour was to blame for the deficit which was caused, he said, by the financial crash.
In his statement, 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 while carrying out an important frontbench 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."
Miliband said: "It is with great regret that I have accepted the resignation of Alan Johnson. 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."
In what was described by Labour sources as a seamless operation, Miliband announced that:
Douglas Alexander, campaign ! manager to David Miliband, moves from his post as shadow work and pensions secretary to succeed Cooper as shadow foreign secretary.
Liam Byrne moves from his post as shadow Cabinet Office minister to succeed Alexander as shadow work and pensions secretary.
Tessa Jowell keeps her post as shadow Olympics minister but also succeeds Byrne in the shadow Cabinet Office role.
The relationship between Ed Miliband and Balls, who both made their names as advisers to Gordon Brown, will now decide the future success of the Labour party. The two, who had fallen out in recent years, had what was described as a lengthy strategic discussion last night.
Miliband, who offered Balls the post of shadow chancellor just before lunch today in a telephone conversation as he drove to a question and answer session, was reassured that his new shadow chancellor fully endorsed the Darling deficit reduction plan. They will share offices.
Miliband said: "Ed brings great expertise to this role and I look forward to working with him on the direction Alan and I have set out. Economic policy is unchanged. Actually, Ed and I have similar views."
One Labour source said: "The sheer lack of mess in the reshuffle is extraordinary. It was an incredible effort by Ed, a very clean operation."
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