Alan Johnson resigns as shadow chancellor: live
Alan Johnson has quit as shadow chancellor
Johnson cites 'personal reasons' for decision to step down
Ed Balls takes over as Ed Miliband reshuffles his team
Miliband facing further questions over his leadership
5.47pm: The former Labour communications chief Alastair Campbell has taken to Twitter with his reaction.
Alan Johnson really nice guy and good politician. Sad to hear his news. Ed Balls is the replacement Osborne did not want
Fraser Nelson, political editor of the Spectator, adds:
So... party at Theresa May's house tonight?
5.35pm: Miliband has given an interview, which has just been shown on Sky News. He insisted that Johnson has stepped down for personal reasons and not political differences.
Alan Johnson was the right man for the job. He has had to stand down for personal reasons, nothing to do with the job.
He was asked whether the appointment of Balls signalled a change in direction for economic policy as Nick Watt says below, Balls had a more hawkish line on the deficit. But Miliband insisted that his views were "similar". He added:
Ed brings great exerpertise to this role and I am looking forward to working with him, on the direction that Alan and I have already set out.
5.24pm: Our chief political correspondent Nicholas Watt has just filed a story on the resignation. It will be published shortly but here's the key section:
Johnson's resignation follows a difficult debut in which he was mocked for failing to know the national insurance rate. He had joked on his appointment that he would have to use an economics primer.
The appointment of Balls will mark a sharper Labour position on tackling the fiscal deficit. Balls was passed over the post in October because he believed that Miliband's position on deficit to endorse Alistair Darling's plan to halve it over four years was too fast. In a speech during the Labour leadership contest at Bloomberg in August, Balls called for a slower deficit redu! ction pl an to protect the recovery and promote growth.
5.22pm: A survey by PoliticsHome back in October revealed that Ed Balls was overwhelmingly seen as the most effective operator on in the shadow cabinet. Some 47% of those questioned said he was most likely to do damage to the government rising to 55% of Tories.
5.14pm: Even though Johnson has cited "personal reasons" in his resignation statement, this will not stop a torrent of questions about Miliband's leadership style. Ed Miliband narrowly beat his brother David in the leadership election last year, although he did not command a majority of MPs, and his performance in the Commons chamber against David Cameron has been regarded as lacklustre
5.11pm:This is the full text of Alan Johnson's statement:
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 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.
5.09pm: Ed Balls, a former economic adviser to Gordon Brown, is to take over as shadow chancellor. (His combative leadership campaign led many in Labour to believe the party leader, Ed Miliband, should have picked him at the start. But he was a divisive figure and Miliband plumped for Johnson instead.)
Yvette Cooper will become shadow home secretary, and Douglas Alexander takes on the post of shadow foreign secretary.
5.04pm: The Press Association says Johnsondecided to resign from the shadow cabinet "for personal reasons to do with my family". ! He added : "I have found it difficult to cope with these personal issues in my private life whilst carrying out an important frontbench role."
5.00pm: The shadow chancellor, Alan Johnson, is to resign, presenting the Labour leader Ed Miliband with a major headache. Already facing questions over his leadership, Miliband must now deal with the fallout from the resignation of a crucial shadow cabinet colleague.
Johnson is expected to make a statement soon: follow live coverage here.
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