Ed Balls has been called many things in his time: intellectual bully, back-room bruiser, factional conspirator, deputy chancellor. He prefers to describe himself as a socialist. As we talk over coffee in his cramped Westminster office, Gordon Brown's most trusted aide and adviser hesitates for just a moment before agreeing that he's happy with the label.
Odd, perhaps, that a Labour politician - and one who happens to be a Yorkshire MP, at that - should be at all cautious about calling himself a socialist, but Balls knows that every word he says is immediately interpreted as the view from No 11 Downing Street. He also knows that the slightest indication of Gordon Brown's left-wing credentials will be mercilessly spun by the Tories. Socialism equals old Labour equals command economy equals big government equals roadblock to reform: so goes the argument. Cameron's Tories can already claim a degree of success for their strategy of driving a wedge between Blair and his party if not between the Prime Minister and his Chancellor.
Balls says he is uncomfortable with the label "social democrat", so beloved of Tony Blair and his inner circle of advisers, because he associates it with the breakaway party that nearly destroyed Labour in the early 1980s. To him, "democratic socialist" smacks of the old eastern-bloc communist regimes, and so he is happy to return to "socialist", albeit with a distinctly 21st-century slant. "If it means I care about inequality and social justice, if it means that I believe we can build a sense of community by acting together, then I am happy to call myself a socialist." Quite how this dis- tinguishes him from other centrist politicians (or even David Cameron) is not entirely clear, except that Balls appears to be genuine. But he says the use of the term "socialist" is less of a problem for his generation (he turned 39 last month) than it has been for older politicians like Blair and Brown, who remain bruised by the ideological warfare of the 1970s and 1980s.
"When I was at college, the economic system in eastern Europe was crumbling. We didn't have to ask the question of whether we should adopt a globally integrated, market-based model. For me, it is now a question of what values you have. Socialism, as represented by the Labour Party, the Fabian Society, the Co-operative movement, is a tradition I can be proud of."
In the context of these shared socialist values, Balls is surprisingly frank about the latest crises to beset his party: the Jowell/ Mills affair and the rebellion over the Education Bill. In both cases, back-bench Labour MPs have expressed disquiet over a perceived abandoning of core Labour principles. Balls accepts that many in the party find it difficult to square the financial tangles of the Culture Secretary with a government that claims to champion the interests of the poorest in society.
"I like Tessa Jowell very much indeed and she has answered all the questions that have been put to her," he said. "But it is a problem for party members out there in the country, because for most people, the kind of sums or the kinds of business relations we are talking about aren't really part of the normal world in which people live. And so it does seem a bit baffling."
The new schools bill has also tried his patience. By representing the legislation as a revolution to set schools free, on the model of the independent sector, the legislation was tailor-made to alienate large numbers of Labour backbenchers. In constituencies such as Normanton, West Yorkshire, which Balls represents, the relationship between secondary schools and the local authority is unproblematic, and he sees no desire for schools there to set themselves up as independent trusts. He is deeply critical of the government's management of the bill.
"Our problem is that the initial presentation caused big problems which the government's never been able to get over. Speaking as a backbencher, even when you try to explain to party members the changes that have occurred, people are still affected by the initial perception: that . . . local authorities weren't going to have a role, that the role that local authority governors or parent-governors played was less important, that schools should be pushed to go it alone. We've never really got over that."
He is backing the bill, but he could not be described as an enthusiast. When we met for our interview, he was due to slip off to a Parliamentary Labour Party meeting to lend his support to a beleaguered Ruth Kelly, but decided to continue the conversation. "I'm going to vote for a second reading and lots of people I know will," he said. "But that's not enough to persuade party members and fellow MPs who are distrustful because of what happened at the beginning. A second problem," he added with clear irritation, "is that we need to get back to a clear dividing line between us and the Conservatives on education policy."
Balls doesn't often talk about his family background, but it provides an intriguing context to the politician. It will come as a surprise to some that he was privately educated, at Nottingham High School, before he took the classic route of a politics, philosophy and economics degree at Oxford and further study at Harvard. After a stint at the Financial Times, he was just 27 when he became economic adviser to Brown, as shadow chancellor; he moved up to chief economic adviser at the Treasury at the age of 32. His father is Michael Balls, an expert in alternatives to animal experimentation and retired European civil servant. In 1998 he married Yvette Cooper, MP in neighbouring Pontefract and Castleford, who, as a minister of state in the Office of the Deputy Prime Minister, is considerably senior to her husband. They have three children.
On the face of it, Balls is just one rather inexperienced MP among many, with no more status than any other backbencher. He holds no junior ministerial post and sits on no select committees: all quite usual for a politician who entered parliament less than two years ago. Yet there is no doubt that he is a significant power-broker in the transition from a Blair to a Brown premiership. He is one of three Brownite MPs (Ed Miliband and Douglas Alexander being the others) who are present at regular meetings in Downing Street to discuss the handover. At the same time, Balls is intimately involved in building the Chancellor's fast-developing policy agenda outside the Treasury, including projects on the work-life balance, climate change and energy policy.
Like his former boss, Balls has been spreading his wings. He has been given the job of preparing a report for the G8 finance ministers later this year on the economy of the Palestinian territories. He has twice visited Israel and Palestine in the past six months and has produced an interim assessment. The policy of a Brown government in the Middle East, most likely based on Balls's work in the region, is already being developed: it has been described as bleak realism founded on evidence of the near collapse of Palestinian trade. The day after our interview, I bumped into Balls at an off-the-record seminar on the political and economic situation in the Middle East. In this area, the succession may already be more advanced than some people imagine, with Tony Blair becoming an irrelevance to the future direction of government policy. Elsewhere, too, the Prime Minister's power is waning: his much-vaunted education reforms have been neutered, the white paper on healthcare outside hospitals may never make it to the statute book, and the criminal justice white paper on "respect" has already been shelved.
Balls remains convinced that the Conservative leadership will find it difficult to coun- ter the Chancellor's weight and authority, but knows precisely where the attack will come from. "The Conservatives are not, I think, going to find it easy and so what they are going to do instead is to try to say Gordon Brown is just an old centralist socialist, which for them will mean 'of the past' . . . In the end, I don't think it resonates, but that's what they will try to do."
At the end of our interview, Balls returns to the subject of socialism and mounts an emotional defence of the postwar welfare state. For once, his account of his politics is based not on the fierce logic of economic policy, but on the personal histories of the Balls family, and the Chancellor. "My father's father died when the family was very young in a working-class community in Norwich. It was the welfare state which got my dad to grammar school and supported the family. And in a different way, Gordon was the son of the manse who got an accelerated scholarship to school. It didn't come from trust funds or moneyed wealth: it was the welfare state and an education system that believed in opportunity.
"All this was delivered by the 1945 government, which always called itself a socialist government. But those were the values that mattered and they were about opportunity and fairness and the community supporting and giving everybody a chance rather than just a few.
"Those are the kinds of values that are more in tune with the British people: the sense of fairness and fair play and opportunity are what it is to be British. I think the Conservatives play a very dangerous game if they try to belittle that."