Balls made Chancellor as Johnson resigns

MP and Labour politician Ed Balls has had his long-term dream realised after taking over Alan Johnson's post as Shadow Chancellor.

Johnson sudenly resigned from the post, just three months after having been given the responsibility by Ed Miliband.

It is understood Mr Johnson's reasons for resignation were personal. As The Journal went to press, allegations were growing against his former personal bodyguard for having an affair with the MP's wife.

Scotland Yard has confirmed that a police protection officer has been referred to its Directorate of Professional Standards over the allegations. The officer is understood to be Paul Rice, a bodyguard that had protected Mr Johnson and his wife Laura.

Ed Balls was appointed immediately as the new shadow Chancellor. The Conservative Party press likened the move to a more Brownian style of economic policies, since Mr Balls' original post was an aide to former Prime Minister Gordon Brown.

Mr Balls, who has a Master's degree in economics, has promised to continue the economic policy set out by Mr Johnson, but there were fears that he would pull the party more to the left. He has refused to acknowledge that the budget deficit needs urgent attention.

Announcing his decision, Mr Johnson wrote to Labour leader Ed Miliband saying: "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." 

Front-bench Tory MPs criticised Ed Milliband's decision to appoint Mr Johnson. At Prime Minister Question's this month, David Cameron told Mr Miliband that Labour now had "a shadow chancellor that can't count and an opposition leader that doesn't count".

There are concerns that Balls has his eyes on the Labour leader position, after finishing third behind the Miliband brothers in September's leadership contest.

However, Mr 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.

"He's going to be continuing the direction of our economic policy, which is about growth and jobs and cutting the deficit, rather than this Conservative-led government that's going too far and too fast with deficit reduction."