Alan Johnson was a surprise appointment to the key post of shadow Chancellor as the new Labour leader Ed Miliband adopted a safety-first strategy when he allocated the jobs in his shadow Cabinet.
The former Home Secretary will lead Labour's response to the Government-wide spending review to be unveiled by Chancellor George Osborne a week on Monday.
By declining to give the shadow Chancellor's post to Ed Balls or his wife Yvette Cooper, Mr Miliband suggested that he will not make a major departure from the policy of Gordon Brown's Government to halve Britain's £155bn deficit over four years.
Mr Balls and Ms Cooper fear that sticking to this line might enable the coalition to describe its cuts as “Labour cuts” made necessary by the failures of the previous administration.
In Labour's leadership election, Alan Johnson supported David Miliband, who wanted to maintain the policy. Last month, Mr Johnson called on Labour to adopt a “sensible approach”, saying that people “don't want to see the deficit go on for ever”.
Mr Balls argued forcefully for Labour to support a slower deficit-reduction programme to avoid the risk of a “double-dip” recession. As Gordon Brown's former chief economic adviser, who later became a Treasury minister, he has made no secret of his desire to land the shadow Chancellor's job.
Yesterday, he admitted that he was “surprised” to become shadow Home Secretary but insisted he was “pleased” and rallied loyally behind Ed Miliband.
Another of the surprises in the shadow cabinet was that Shaun Woodward kept the position of shadow Northern Ireland Secretary despite not being shortlisted by MPs as one of the potential cabinet members.
Mr Woodward said last night: “I am honoured to have been asked by Ed Miliband to serve in the shadow cabinet and especially to continue the work of the peace and political process in Northern Ireland.”
Mr Johnson (60), was branded a “caretaker appointment” by the Tories and may not keep the job until the next General Election. He distanced himself from Mr Balls' approach, saying he did not agree that halving the deficit over four years was too short a period.
He described Labour's existing policy as “just about right” but gave himself some wriggle room, endorsing Mr Miliband's view that it was “a starting point”. “Nothing is preserved in aspic,” Mr Johnson said. “There have been developments since the General Election. We need to take all those into account.” He added that the coalition Government was cutting spending “too deeply, too quickly”.
Ms Cooper, who was also tipped for the shadow Treasury brief and is also a former Treasury minister, was instead appointed shadow Foreign Secretary, a senior but relatively low-profile post in opposition.
Thursday's shadow Cabinet election turned out well for the Balls-Cooper household; Ms Cooper topped the poll and her husband was third. Second place went to John Healey, who backed Mr Balls in the Labour leadership contest. But yesterday's shadow Cabinet announcements were less good. Although Mr Healey landed the important health portfolio, Mr Balls's allies on the backbenches were privately disappointed by the share-out of jobs, saying it showed Ed Miliband wanted to keep Mr Balls at arm’s length.