Johnson's resignation: good or bad for Miliband?

I have long argued that Labour could make life a lot harder for the Tories if they put Ed Balls or Yvette Cooper in the Shadow Chancellor's role. Now that Balls is there, expect him to make the brief his own and really push Osborne on every decision. While the Conservatives will no doubt mock Balls's closeness to Gordon Brown and lambast Miliband for his decision to hire Johnson for a job he was never suited for, after a couple of weeks this will die down and the Tories will be left facing someone who is ruthless and totally on top of his brief.

But while it's not good news for the Tories, and it definitely is good news for Ed Balls and Yvette Cooper - who will no longer be wasted shadowing William Hague - I'm not too sure that it's good news for Ed Miliband. He didn't put Balls into that role for two reasons: they have different ideas about what Labour's economic policy should be, and Miliband thought Balls would become too powerful as Shadow Chancellor. Both of these problems still exist.

Ed Balls has a different economic agenda to Miliband. It was evident in the leadership election and it is still there now. Miliband clearly had problems controlling Johnson as well, but Balls is different because unlike Johnson, he actually has a plan of action and knows what he's doing. Johnson was never really a threat even when he disagreed: Balls could be. It's not surprising that Balls has said that he is fully supportive of Darling's deficit reduction plan, because he has to show that they're on the same team. But he will deviate soon enough.

Balls is convinced his economic approach is right, and won't be worried by Tory attacks on Labour for being unwilling to tackle the deficit. Public support for that is falling anyway, and Miliband's half-hearted attempts at moderation will disappear. 2011 will not just see the pressure increase on the coalition: there will be equally as much pressure on the Labour Party to oppose cuts everywhere: across every department and across every county. Balls will heed all these calls, and Miliband won't have the political clout to stop him.

But this isn't necessarily a bad thing for Labour. The two worked closely for a long time under Gordon Brown and will have seen the chaos that was his relationship with Tony Blair. They will work hard to avoid that happening again. Even if Miliband is initially weakened personally, the Labour Party as a whole will undoubtedly be strengthened by having a competent Shadow Chancellor in the midst of the most dramatic changes to Government in over a decade. And that in turn will strengthen Miliband's claim that the Labour Party has a plausible, alternative agenda to the Coalition and that they can win in 2015.