The leader's in tray: Shadow cabinet poll is the first worry

Ed Miliband faces an early test of how best to deploy his team - once his backbenchers have decided who's in it

After waiting almost 41 years to become Labour leader, Ed Miliband must wait another 11 days to find out who will be in his team taking the fight to the coalition.

While the membership of the Shadow Cabinet will be chosen by the party's 257 MPs, whom to promote, demote or overlook will be the first of many "big tests" Mr Miliband will face. Away from the ovations and razzmatazz of last night's announcement, his mind will already be whirring with the complexities of constructing his front bench.

Plum jobs including Shadow Chancellor, shadow Home Secretary and shadow Foreign Secretary will have to be carefully assigned, taking account of the loyal, the long-serving and the likely troublemakers. The Brownites, the Blairites, the newbies and the grandees will all have to feel part of the Miliband project.

The battle to win yesterday's poll was the easy part. Uniting the Labour Party behind a single message, particularly over the economy, will take longer and potentially be more fiercely fought. The divisions are not as deep, nor the election defeat as great as in 1979 when Labour was last kicked out of power. But Mr Miliband will have to work hard to defy the history books, which suggest Labour takes years to recover from losing office.

Nominations for the shadow cabinet elections officially open today, and voting begins on 4 October, with the result announced at 10pm on 7 October. This tight timetable means Mr Miliband will have just 13 days to make his key appointments and formulate a coherent economic strategy to oppose George Osborne's plan to cut billions from public spending and eradicate the £155bn deficit within five years. The Comprehensive Spending Review will be announced on 20 October and the new Shadow Chancellor will be expected to land serious punches on Mr Osborne.

Which raises the question: How do you solve a problem like Ed Balls? Labour's most capable economist finished a commendable third in the leadership contest after running a widely praised campaign. His future role will be a difficult balance to strike. Hand him the role of Shadow Chancellor in recognition of his decade of experience at Gordon Brown's side, in opposition and in the Treasury, but risk repeating the tensions that dogged Nos 10 and 11 during Labour's years in power. But if Mr Miliband gives him another job, possibly shadowing the Home Secretary, Theresa May, he could see his new shadow Treasury team being briefed against by a disgruntled Mr Balls.

The other conundrum is how to handle his brother. Reports persist that David Miliband will eventually quit frontline politics after failing to land the leadership. Anything less than shadowing Foreign, Home or Treasury will be seen as a demotion accelerating his departure.

If the new leader chooses not to hand his brother the shadow Treasury brief, another prime candidate for the job is Yvette Cooper, Mr Balls's wife. She impressed with her quick analysis of June's emergency Budget, producing concise notes to help Harriet Harman brand it "reckless", "bad for growth" and leaving the poorest to "bear the brunt". It would also blunt the threat of counter-briefing from Mr Balls himself. Liam Byrne would have hoped for an economic brief, but is still in purdah after his "funny" note to his successor as Chief Secretary to the Treasury, which admitted: "I'm afraid there is no money left."

The shadow cabinet election means places at the top table are not guaranteed for the defeated leadership contenders, with Diane Abbott considered doubtful. Andy Burnham, who failed to make a significant impression during the contest, would still rightly expect a high-profile role. Sadiq Khan, Mr Miliband's campaign manager, will be in line for promotion from his current role as shadow Transport Secretary.

Last night, there were the first signs of a battle of ideas over the direction Labour must take, as a number of senior party figures issued differing assessments on the way ahead.

The shadow Home Secretary, Alan Johnson, writing in The Independent on Sunday, warns Mr Miliband not to "move the party to the left" or "lead us back to our comfort zone". He demands "fresh thinking" on the party's plan to address the deficit after voters rejected Labour's original proposal at the election. And in a stinging rebuke to his new leader's policy to fund higher education, Mr Johnson adds: "For goodness' sake, don't pursue a graduate tax. We should be proud of our brave and correct decision to introduce tuition fees."

In an exclusive article for the IoS website, the shadow Welsh Secretary, Peter Hain, warns against relying on attacking the coalition or becoming "a repository of protest votes" as a strategy for recovery. He adds: "Neither should we assume the key issue of 2015 will be a choice between Tory and Lib Dem cuts on the one hand, and Labour expansion in public spending on the other. The greatest challenge for our movement is to achieve what New Labour could not: reoccupying the political centre ground and appealing to the millions of lost Labour voters in our heartlands."

Harriet Harman, the outgoing acting leader, last night dismissed attempts to reposition Labour on the political spectrum. In an exclusive interview with the IoS, she said: "I don't think politics is an electoral game; it is not like electoral chess where the electorate are pawns to be moved around. It's about listening to people's concerns, understanding how things are changing in people's lives in a whole load of ways, and applying our values and principles to those changing circumstances. I don't think we should lurk in the basement of a think-tank and look at graphs and then work out where the entry is to rush in."

Ms Harman's guaranteed role in the Shadow Cabinet as deputy leader makes her a key player in Labour's post-defeat direction, and she is widely expected to be handed a significant portfolio in the reshuffle, possibly Health or Education.

But there is unease about the ability of the old guard of long-serving cabinet ministers to serve willingly and loyally under a comparatively young and inexperienced leader. Shadow cabinet contenders pledging to bring new blood to Labour's top team are furious that incumbents – and opponents in the election – are to be feted with platform speeches at the party's conference in Manchester this week.

Over the next four days, senior figures, including Mr Johnson, Mr Hain, Ms Cooper, John Healey and Ben Bradshaw, will use their moment in the spotlight to underscore their experience in government.

The first five potholes in the new leader's path

Spending cuts

Labour's response to the Comprehensive Spending Review due next month will set the scene for the five-year battle ahead. If Ed Miliband rejects the coalition's plan he risks downplaying the importance of cutting the deficit. But after arguing against cuts for so long, an early U-turn could look weak.

AV referendum

At the general election, Labour was the only party offering a referendum on the adoption of the Alternative Vote system, claiming it would "ensure that every MP is supported by the majority of their constituents voting at each election". But the party is now split over the reform.



Union militancy

Ed Miliband's reliance on the unions for his leadership victory could come back to haunt him. If the public spending cuts trigger a wave of strikes, he will come under pressure to be at the front of the great march for jobs, but will risk alienating those in the private sector also feeling the pinch.



Elections

In less than eight months, there are elections to the Welsh and Scottish parliaments, and to English councils.



Lib Dems

Labour strategists disagree over what to do about the coalition's junior partner. Ed Miliband made clear his intention to woo disaffected Lib Dem voters by presenting Labour as a home for the liberal left. But his recently revealed opposition to Iraq will not work for ever.

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