Forget the leadership election. The parliamentary Labour Party is moving on. Inside the Westminster offices of the 50 or so Labour MPs who are preparing to stand for the shadow cabinet, frantic plotting and planning is under way.

One senior figure who is hoping to secure a place on the front bench took me aside for a private chat in his office. I was amused to see that his various desks and work surfaces were overflowing with bits of paper on which the names and pictures of various Labour MPs were displayed. The piles were divided into categories such as "Need more work", "Says yes but probably no", "Deal?", and "No".

The Labour Uncut website has so far published "Vote for me" letters from 29 Labour MPs - there are 19 jobs up for grabs - ranging from the mundane to the absurd. Maria Eagle's solipsistic plea to her parliamentary colleagues, for example, begins with an image of an actual eagle - yes, the bird - swooping down from the sky to assault David Cameron and Nick Clegg. She writes: "I believe I have the talons talent to help make Labour soar upwards again." Groan.

Nominations for the shadow cabinet open on 26 September, the day after the new leader is announced. One race ends and another begins.

It's over, Darling

So what can we expect? Ex-cabinet heavyweights such as Alistair Darling and Jack Straw have already announced their retirement from the front bench. Nonetheless, the lists of the runners and riders are full of the names of former ministers. Where are the newbies? If Labour wants to construct an appealing shadow cabinet, rather than a cabinet of shadows, the party has to be bold and unorthodox; it has to promote new blood.

Members of the 2010 intake, such as Chuka Umunna, Rachel Reeves and Lisa Nandy - all young, dynamic, articulate and intelligent - have kept their heads down. A senior Labour MP says: "Stop mentioning Chuka's name . . . You're going to make him unpopular in the eyes of his peers and wreck his career."

Why? Because "experience", it seems, matters. Candidates are keen to stress their experience, ministerial or otherwise, in the various missives clogging up inboxes across the PLP. But experience is overrated. As Tony Blair proudly says at the outset of his memoir, A Journey, he arrived at No 10 on 1 May 1997 with no ministerial experience. The same is true of David Cameron - elected to the Commons as an opposition MP in 2001 but prime minister by 2010. Barack Obama, meanwhile, spent just 26 months in the Senate before running for the most important job in world politics.

Nor does a lengthy CV automatically translate into good political judgement. As Ed Balls has argued, the "fortysomethings" in the cabinet who were attracted by the prospect of an "early" general election in the autumn of 2007, including himself, Ed Miliband and Douglas Alexander, were proved right in the end, compared to the "greybeards", like Jack Straw and Geoff Hoon, who wrongly urged caution.

What then of Balls? Is he destined to become shadow chancellor? Balls will obviously not be the next leader and he may yet have to endure the humiliation of finishing fifth, behind Andy Burnham and Diane Abbott. Yet he has used his leadership campaign to remind a sceptical party, and a hostile press, that he has a powerful understanding of economics and of economic history and a particular talent for harrying and haranguing Tory opponents. Just ask Michael Gove.

Balls's speech at Bloomberg in the City of London on 27 August, in which he set out a coherent and credible alternative to the coalition's fiscal sadism, has since been hailed by respected commentators such as Martin Wolf and Samuel Brittan of the Financial Times as well as leading Keynesian economists.

I am told that Balls has done another deal with his wife, Yvette Cooper, the shadow work and pensions secretary, who stood aside in June to allow her husband to run for the leadership. The well-regarded Cooper - a former financial journalist, with an MSc in economics from the LSE - had been touted by some in Westminster as a potential shadow chancellor. But she has privately agreed to allow Balls to go for the job of shadow chancellor, too, and has backed his position on the deficit in public.

“Ed has emerged stronger from this campaign, not weaker," one of his defiant supporters told me. Those who suggested he would endorse David Miliband before voting closed on 22 September, or offer his second preference to the former foreign secretary in return for a guarantee of the shadow chancellorship, were victims of spin from the Mili-D camp. Sources close to Balls suggest he would be much more comfortable serving under Mili-E.

Both Eds take a less hawkish line on the deficit than David Miliband, who is committed to Alistair Darling's plan arbitrarily to halve the deficit over four years. A friend of Balls says: "If David is leader, and he makes Ed [Balls] shadow chancellor, there's a real risk of a repeat of the Blair-Brown wars."

Quick to the cuts

In the end, I suspect whichever Miliband brother wins will want to give the all-important job of shadow chancellor to Ed Balls. For a start, the next Labour leader will have only 13 days to agree a policy on spending cuts: the new shadow cabinet won't be announced until 7 October, while the forthcoming Comprehensive Spending Review, which will reveal the biggest cuts to public expenditure since the 1930s, is scheduled for 20 October. He will badly need the Harvard-trained economist at his side.

The gap between Balls and Mili-D on deficit reduction has been exaggerated. "How wedded is David to Alistair Darling's plans?" asks a source in the Balls camp. He notes that the elder Miliband praised Balls's Bloomberg speech in both the Channel 4 News hustings and on BBC1's Question Time.

“Whoever wins should put that job [shadow chancellor] at the heart of what they stand for and how to take on the coalition," Balls said, in a recent interview. "And they should get the best person for the job to do it."

Memo to the Milibrothers: be bold. Ignore the deficit hawks, the Tory partisans and the faint-hearted on your own back benches. There is no alternative to Ed Balls as shadow chancellor at this time of national emergency.