Johnson resigns – Ed Balls new shadow chancellor

By Mark Ferguson / @markfergusonuk

Update: Here’s Ed Balls’ reaction to taking on the shadow chancellor brief:

“It is a great honour to be appointed to this post, and to succeed my friend and colleague Alan Johnson whose commitment to social justice and service to the Labour Party is second to none.

“Over the past few months, Alan and Ed have set out a clear direction on economic policy and challenged the Conservative-led Government’s false claim that our investment in schools, hospitals and police, rather than the global financial crisis, caused the deficit.

“Our task ahead is to take on George Osborne and David Cameron’s decision to cut too far and too fast, recklessly putting jobs and growth at risk. We will hold them to account for the decisions they have taken, fromraising VAT to scrapping the Future Jobs Fund and education maintenance allowances.

“We will set out to the public that there is an alternative: a fair economy which puts jobs and growth first.

“I look forward to taking on and winning this argument.”

Update: Miliband’s letter to Alan Johnson praises him as an “outstanding colleague” and a “great friend”. You can read it here.

Update: As well as moves for Balls, Cooper and Alexander, Liam Byrne will go to DWP, and Tessa Jowell will take on Cabinet office.

Update: Johnson has said: “I have found it difficult to cope with these personal issues in my private life whilst carrying out an important front bench role.”

Meanwhile Ed Miliband, unveiling Ed Balls as his shadow chancellor, says: “Ed Balls is an outstanding economist and is hugely qualified to take our economic message to the country.”

Update: Sources indicate Balls to shadow chancellor, Cooper to shadow home office and Alexander as shadow foreign secretary – full reshuffle announced at 5.

Update: Sky sources are saying that Johnson has resigned for “personal reasons”. We’ll bring you all of the reaction as it comes in.

This one has come right out of the blue. James Kirkup of the Telegraph is reporting Westminster rumours that Alan Johnson will be stepping down as shadow chancellor. Johnson hasn’t had an easy time of it since he took on the role in October, but it would be a real surprise to see him step down so soon – and it would be a real blow to Ed Miliband who would surely want some stability in his shadow cabinet. This would be all the more surprising as Johnson has been much more “on message” in recent weeks – even appearing alonsgide Miliband at his recent press conference.