Shadow home secretary Ed Balls is to replace shadow chancellor Alan Johnson, who has resigned from his position for personal reasons.
Ball's wife Yvette Cooper, currently shadow foreign secretary, will take over the home affairs brief, while Douglas Alexander will take over as shadow foreign secretary from Cooper. Liam Byrne will replace Alexander as shadow work and pensions secretary.
Johnson has cited personal reasons for his resignation but added he may still decide to serve in another shadow cabinet job.
Balls, MP for Morley and Outwood, previously served in the Labour government as secretary of state for children, schools and families and was later an unsuccessful candidate in the party’s 2010 leadership election.
He made his name as an economic adviser to Gordon Brown before becoming chief economic adviser to HM Treasury between 1999 and 2004 before he became an MP at the 2005 general election.
Johnson had only been appointed shadow chancellor last October. He represents Hull West and Hessle and also served as home secretary in the last year of Gordon Brown’s government.
In a statement Johnson (pictured) 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 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.
Ed Miliband said: 'It is with great regret that I have accepted the resignation of Alan Johnson.'
‘Alan was the right man for the job; he stepped down for personal reasons. I want to thank him for the job he has done. I look forward to working with Ed in the direction Alan and I set out.’
'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.'
Balls 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. We will hold them to account for the decisions they have taken, from raising 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.'