By Peter Hoskin
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Tension between the Labour leader
and the man he’s put in charge of his party’s economic policy? Who’s ever heard
of such a thing?!

But, despite there being
absolutely no precedent for it whatsoever, it appears that such tension may
exist — at least judging by Kevin Maguire’s article for the latest issue of the
New Statesman. With rumours
that Ed Miliband might be prepared to offer his brother the Shadow
Chancellorship, friends of the incumbent Ed Balls have been speaking to Mr

Allies of the Shadow Chancellor whisper that he'd take his
bat and balls away and retire to the backbenches rather than swallow demotion.”

If Mr Miliband is considering triggering Mr Balls’s
displeasure, you can understand why. Labour consistently
lag behind the Tories
when it comes to polling on economic competence,
despite their hefty poll leads overall. And there’s a sense that the Shadow
Chancellor is not having the impact he might, nor making all the right calls,
including during the ongoing row over benefits.

But I’d still be fairly surprised if Balls were
demoted. Not only, as the Maguire story suggests, could it trigger the sort of
Labour in-fighting that Mr Miliband is probably keen to avoid, but it would
also be interpreted as an admission that Labour’s economic and fiscal policy
has been insufficient. The Labour leader would have to be sure of some fairly major
upsides to risk such downsides.

Much could depend on whether Ed Miliband decides
to firm up Labour’s economic offering — and whether Ed Balls goes along with
him. David Miliband has this week suggested that he backs the Government’s “spending
envelope” for benefits and tax credits, just not all of the cuts that are being
made within in. Could Ed Balls say something similar? Indeed, could he back Mr
Osborne’s overall spending envelope, if that’s what it came to?

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