Brown shuffles advisers to prepare for Balls' departure

Gordon Brown has paved the way for his closest aide Ed Balls to leave the Treasury and move into frontline politics by becoming a Labour MP.

The Chancellor announced a shake-up yesterday to strengthen his team of political advisers and help fill the vacuum expected to be created when Mr Balls, the Treasury's chief economic adviser, departs after the Budget.

Mr Balls, nicknamed "the deputy chancellor", has been the brains behind Labour's economic strategy, notably its decision on winning power in 1997 to hand control of interest rates to the Bank of England. He is widely expected to be Labour's parliamentary candidate in Normanton in Yorkshire, where Bill O'Brien, who had a 9,937 majority at the last election, is standing down.

Mr Balls's wife, Yvette Cooper, a minister at the Office of the Deputy Prime Minister, is MP for the neighbouring constituency of Pontefract and Castleford. If he wins the seat, Mr Balls, aged 36, could expect a rapid rise up the political ladder and is regarded as a likely future chancellor.

Under yesterday's changes, Ed Miliband will return to the Treasury to chair its Council of Economic Advisers, which works on long-term policy development. The brother of David Miliband, the Schools Standards minister, he was previously special adviser to Mr Brown and has spent the past 18 months at Harvard University.

Spencer Livermore, who currently advises Paul Boateng, the Chief Treasury Secretary, has been appointed special adviser to the Chancellor, a role he has filled during Mr Miliband's sabbatical.

Also joining the advisory council is Michael Jacobs, the former general secretary of the Fabian Society, who played a leading role in persuading the Government to increase national insurance and earmark money for the NHS.

Mr Brown has also beefed up his team of economic analysts. Nicholas Stern, a former chief economist at the World Bank, became second permanent secretary and head of the Government Economic Service last autumn.

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