Shadow chancellor Alan Johnson quits 'for family reasons'

Alan Johnson was Labour leader Ed Miliband's surprise choice for the job of Shadow Chancellor (PA)

Shadow chancellor Alan Johnson dramatically quit the Labour front bench tonight 'for personal reasons to do with my family'.

In a blow for Labour leader Ed Miliband, Mr Johnson abruptly announced that he could not cope with issues facing his family while in the role.

Ed Balls, currently shadow home secretary, will take his place.

Mr Johnson was only appointed to the key economic portfolio in October but has faced repeated questions about his suitability for the job.

In a statement, he 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."

Mr Miliband said Mr Johnson's resignation was for personal reasons and "nothing to do with the job", adding that the party's economic policy would be unchanged.

A Labour reshuffle will see Yvette Cooper, Mr Balls' wife, take over from him as shadow home secretary.

Douglas Alexander becomes shadow foreign secretary, Liam Byrne will be shadow work and pensions secretary and Tessa Jowell takes over as shadow Cabinet Office minister.

In a statement, Mr Miliband insisted Labour had a "strong, confident" Shadow Cabinet.

"It is with great regret that I have accepted the resignation of Alan Johnson," he said.

"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.

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

"In Yvette, Douglas, Liam and Tessa, we have a team which combines extensive experience in government and determination in opposition.

"I am proud that Labour has a strong, confident Shadow Cabinet that will expose the mistakes of this Conservative-led Government.

"Together we will put the economy at the forefront of our argument as we work hard to regain the trust of the British people."

Mr Miliband insisted that the appointment of Mr Balls would not mark any shift in Labour's economic policy.

"Ed brings great expertise to this role and I look forward to working with him on the direction Alan and I have set out," he said during a visit to the West Midlands.

"Economic policy is unchanged. Actually Ed and I have similar views."

Mr Miliband added: "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."

He denied that Mr Johnson had been the wrong choice for shadow chancellor last year.

"No, Alan Johnson was the right person for the job. He's had to stand down for personal reasons, nothing to do with the job," Mr Miliband added.

Mr Balls, a former Treasury minister who came third in last year's Labour leadership contest and has long coveted the economics role, said: "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."

Mr Balls, a fierce ally of Gordon Brown in the former Labour government, had been seen as a possible shadow chancellor to Mr Miliband last year.

However, the new Labour leader plumped for Mr Johnson, who had no background in economics but was seen as a more centrist figure with lots of Cabinet experience.

One of his first comments after his appointment was that he would be buying a primer on economics - a remark which has dogged him since.

More recently, he struggled to remember the rate of National Insurance during a live television interview.

Chancellor George Osborne said: "Alan Johnson served his country at the top of British politics and will be missed from the front line."

In a letter to Mr Miliband dated today, Mr Johnson said he believed he had proved to be "a formidable leader of the Labour Party and will take the party from strength to strength in the years to come".

He said he had decided to resign "for personal reasons to do with my family" and had "found it difficult to cope with these issues in my private life whilst carrying out an important frontbench role".

In a letter of reply, Mr Miliband described Mr Johnson as "an outstanding colleague and great friend for many years".

"As shadow chancellor, you spoke clearly to the public, warning of the dangers posed by the gamble the Government is taking with growth and jobs," the Labour leader wrote. "I particularly want to thank you for the support and advice you have shown me during that period.

"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 said Mr Johnson approached Mr Miliband on Monday to tell him that he wanted to stand down and explain why he felt he could not continue as shadow chancellor.

Mr Miliband did not regard the problem as a resigning matter and spent the past few days trying to persuade Mr Johnson to stay on, said the source. Conversations between the two continued today over the phone as Mr Miliband visited the West Midlands.

But the efforts "reached the end of the road" today, and Mr Miliband arranged the reshuffle of his Shadow Cabinet before Mr Johnson made his announcement.

A senior party spokesman said Mr Johnson had requested that no more be said about the nature of the problem he is facing other than that it is a "personal and family" matter.

It was not the case that a Sunday newspaper was about to reveal information about his private life.

The spokesman rejected suggestions that Mr Johnson had gone because he was out of his depth in the Treasury brief.

Mr Miliband was "very happy" with his performance as shadow chancellor and his resignation had nothing to do with politics, he said.

The reshuffle means that the Shadow Cabinet has shrunk in size by one member to 18.