What to do with the defeated?

One of the challenges facing the next Labour leader will be what to do with Ed Balls. Balls, as he demonstrated in the last few months, has the right mentality for opposition. Labour will need his appetite for the fight in the coming year.

But if a new leader makes Balls’ shadow Chancellor, he’ll have a shadow Chancellor whose position on the deficit is simply not going to seem credible to the public; Balls has already said that he thinks the plan Labour went into the election with for the deficit was too ambitious. The Tories are convinced that if Balls is shadow Chancellor, they’ll have the dividing lines they want on the economy.

A better department for Balls to shadow would be the Home Office. As David Davis showed, a politician with an appetite for hard work, an eye for a story and an appreciation of the importance of building up a network of leakers can claim ministerial scalps in this brief. Balls is also well suited to play the populist card against the coalition’s liberal policies on crime and civil liberties.

This move would also allow the new leader to make Yvette Cooper shadow Chancellor. Cooper would be an ideal contrast to Osborne and Alexander for Labour. Her facility with numbers and economic theory would also put her at an advantage over the Chancellor and Chief Secretary neither of whom are economists by training.

The other fascinating shadow Cabinet question is where will the victorious Miliband place his brother?