"He desperately wants to win. He desperately wants to be chancellor". Illustration by Nate Kitch.

Ed Balls is learning how to make the trains run on time. “When I was six I got a Hornby set but it was nowhere near as good as this,” says the shadow chancellor as he sits in the simulation room of the Wales rail operating centre in Cardiff. Invited to press a large orange button by the supervisor, Balls says: “This isn’t going to stop anything, is it? Not that I’m risk-averse . . .”

In less than two months, Ed Balls hopes to be at the controls of the UK’s £1.8trn econ­omy. If Labour forms a government after the general election and he becomes chancellor, he will be one of the best-qualified – and most polarising – people ever to have entered the office. No recent occupant has had more experience of high-end policymaking.

During his decade as Gordon Brown’s closest economic adviser, he was regarded in Whitehall as among the most powerful éminences grises in British political history. It was Balls who first advocated Bank of England independence in a 1992 Fabian Society pamphlet, Balls who devised the fiscal rules that established New Labour’s reputation for “prudence” and Balls who drew up the five tests for euro membership in the back of a New York taxi with Brown in 1997.

“Deputy chancellor” was his unofficial title during this period. But in conversations I have had with colleagues past and present, Balls more often emerges as “the real chancellor” (a sobriquet also applied to George Osborne’s chief adviser, Rupert Harrison). Jonathan Powell, Tony Blair’s former chief of staff, has written of how Blair believed that it was Balls, “rather than Gordon”, who was “running” the Treasury. As a non-economist – Brown’s degree, like Osborne’s, was in history – the then chancellor is said by MPs to have been “dependent” on Balls’s expertise. The former Labour cabinet minister Peter Hain told me, “[Balls] is by miles the best economist in parliament: technically, theoretically and in policy terms. Nobody can touch him.”

Yet he is also divisive, inspiring fierce loyalty and enduring enmity. During the New Labour years, he was regarded by Blair and his team as their most ruthless opponent, the Robespierre of Brown’s shadow government. “He entered into all the skulduggery with great gusto,” a Balls ally told me. Colleagues say he has a “toxic relationship” with Douglas Alexander, the shadow foreign secretary and the chair of Labour’s general election strategy, dating from the divisions over the calamitous election that never was in 2007. “We sit next to each other in the shadow cabinet and we both quite enjoy making wry comments to each other in the meetings. We get on fine,” Balls replies, when I put this to him on the train back to London.

Conservatives despise him. David Cameron described him in 2011 as “the most annoying person in modern politics” and seldom allows a session of Prime Minister’s Questions to pass without a gibe at his expense, albeit often in response to Balls’s heckling. Balls cites Cameron’s failure to win the 2010 election outright as one explanation. “I think Cameron, six months before the last general election, thought that he was going to win a majority . . . He thought that defeating me in Morley and Outwood would be a symbol of getting a majority and he didn’t.” (Balls held his seat by 1,101 votes.) “I’ve always figured that every time he looks across [from] the despatch box it just reminds him that he didn’t succeed on what he thought was his birthright.”

The antipathy towards Balls extends beyond Westminster. In an interview with the New Statesman in 2013, Noel Gallagher said: “Ed Balls can quite frankly lick mine on his way to and from obscurity.” Russell Brand, apropos of nothing, called him a “snidey c***” with a “clicky wrist” (a “pound-shop Ben Elton”, he riposted). It was Balls’s tendency to polarise opinion that led Ed Miliband initially to pass him over for shadow chancellor in favour of Alan Johnson. Johnson joked that his first act in the role would be to “pick up a primer: Economics for Beginners” – but few in Labour were laughing after a run of amateurish errors, such as his failure to give the rate of employers’ National Insurance contributions when asked during a TV interview. Balls’s moment came when Johnson resigned after three months, having learned of his wife’s affair with one of his former police bodyguards. The appointment was made, but not without trepidation. One of the Labour leader’s aides joked that whoever informed Balls of the news should wear “body armour”. “Even though Balls was getting the job he wanted, Miliband’s people knew from the beginning that he would be a difficult customer,” a Labour insider told me.

Balls is often mocked by Cameron and Osborne as the Labour leader’s “third choice” to serve as shadow chancellor, in reference to Johnson and the failed overtures made to David Miliband. Yet several sources suggest that he was actually the fourth. Yvette Cooper, Balls’s wife and the shadow home secretary, was considered for the job but she made it clear that she would have turned it down.

If the relationship between Balls and Miliband has not been a rerun of the epic feud between Brown and Blair, as some feared or hoped, it has not been cloudless. There have been well-documented divisions over banking reform, airport capacity and Labour’s stance towards business. Balls has maintained a certain distance from his former junior Treasury colleague and rival leadership candidate. One MP told me that Balls had declared during the 2010 contest, “There are two people who are up to this job: one’s David Miliband and one’s me.” He added that Balls believed that Ed Miliband “hadn’t grown” since his election and felt “dreadfully sorry” about his failure to connect with voters.

The Balls-Miliband relationship contrasts sharply with that of Osborne and Cameron, the co-architects of the Conservative “modernisation” project and godfathers to each other’s children. Balls recently revealed that he couldn’t remember the last time he went for a drink or had dinner with Miliband. Colleagues speak of “philosophical differences” between them.

After Balls’s induction at the rail centre, I accompany him to an off-the-record, three-course lunch with business leaders. Alongside Chuka Umunna, the shadow business secretary, Balls is Labour’s emissary to industry and is often regarded as a brake on Miliband’s more radical instincts. It is said that he still believes in harnessing the free market to finance public services and reduce poverty, while Miliband aspires fundamentally to rewire British capitalism. “Ed Balls would not have made the speeches that Ed Miliband has made,” one senior MP said of the Labour leader’s attacks on “predatory” companies. A financier who attended a recent event with the shadow chancellor told the Financial Times, “Balls said: ‘You might hear anti-City sentiment from Ed Miliband but you’ll never hear it from me.’”

Balls rejects suggestions of an ideological gulf between himself and Miliband. “This idea that Labour in government thought that you should simply stand back and allow the free market to operate but distribute the gains progressively is a false and rather lazy caricature. The big changes that we made after 1997 – not just Bank of England independence and statutory regulation of the financial services but also the national minimum wage, which wasn’t there before, and tax credits and the independent competition authority and the regional development agencies and the research and development tax credit – [they] were all about changing the way in which the economy worked in an attempt to raise productivity and economic potential . . . The truth is, there’s rather more continuity than sometimes appears.”

Are there no significant differences between the pair? “Every one of us . . . is shaped by different experiences and realities: where you live, what your parents did and thought, the experiences you had before politics and in politics,” Balls reflects. “I have a different constituency experience and have had for a long time, so of course we’re not the same and of course, from time to time, we disagree. The hugely frustrating thing for the Tory press, though, is that they thought that when we disagree, we’d disagree in public through shouting matches and through a breakdown of Labour politics. In fact, any time we’ve disagreed, we don’t tend to mediate our discussions through advisers or through the newspapers. We sit in a room together and we both understand what we’re trying to do and we sort it out. And we’re quite good at doing that.”

But Balls, who possesses a rich sense of humour and the absurd, cannot resist a joke at Miliband’s expense. When I ask him how he met Cooper, his wife of 17 years, he recalls that they were introduced by a mutual friend on Hampstead Heath in the summer of 1993. “We weren’t collecting stories for speeches. It was just a walk,” he says with a mischievous tilt of his eyebrows. (Miliband’s 2014 Labour conference address was derided for its recollection of encounters in the park with “Gareth”, a software developer, and other members of the public.)

There is intermittent speculation that if the Labour leader becomes prime minister, he will move Balls. I ask him if Miliband has guaranteed that he will become chancellor. “I’m the shadow chancellor and we’re working really closely together on our plans, not just for the election but for government . . . I’ve not had that conversation and wouldn’t seek to do so. He’s the leader; these are his choices. I wouldn’t describe myself as a needy person.”

***

Edward Michael Balls was born in 1967 into a Labour-supporting family in Norwich; they moved to Nottingham when he was eight. His father, Michael, is a distinguished zoologist who pioneered alternatives to the use of animals in medical experiments and served as chairman of the local party. Balls signed up at the age of 16, partly so that he could vote for his father. His parents saved hard to educate Balls privately (at Nottingham High School), as well as his two younger siblings, Joanna and Andrew; Balls did not travel abroad until he was 18.

“I was a child of the 1970s and my teenage years were in the early 1980s, a very harsh and difficult time. My early experience of politics was those years and a sense that it’s got to be better than this, that Labour was the make-things-better party,” he tells me.

After leaving school, Balls entered Keble College, Oxford, his father’s alma mater, where he read PPE, graduating ahead of his contemporary David Cameron with the fourth-highest First in his year. He won a Kennedy scholarship to Harvard, where he studied economics under Larry Summers, the former US treasury secretary. The pair are friends and recently collaborated on a transatlantic report on “inclusive prosperity”. Balls then taught for a year as a fellow in Harvard’s economics department before joining the Financial Times as a leader writer in 1990. His brother followed him to Oxford, Harvard and the FT and is now global chief investment officer at Pimco, which runs one of the world’s largest bond funds. A friend of Balls’s cited the fortune he could have made in the City as evidence of his principled commitment to politics.

Balls was well liked at the FT, where he worked until he joined Brown as an adviser in 1994. Ian Hargreaves, the paper’s former deputy editor, told me: “He was clever. You know what newspapers are like – you have to be able to hold your own in rough company, in noisy company. He was very good.” He added: “His personality was playful and boyish. Everybody knows that Ed Balls likes football and, indeed, he played in the FT team and he was a kind of textbook mid-championship centre-forward in style . . . a lot of energy, direct, didn’t mind who he knocked over, but very good fun to be involved in a football team with.”

Balls is a Norwich City season ticket holder and a ferociously competitive member of the Labour team. In the traditional pre-conference match against Westminster lobby journalists last year, he left the Northern Echo reporter Rob Merrick requiring medical treatment after bloodying his eye with his elbow. “I was about to score a brilliant goal in the top right-hand corner,” Balls said afterwards. “As I steadied myself to shoot, Rob came piling in from behind, attempting to nick the ball, and came off worst.”

Balls began meeting regularly with Gordon Brown in October 1992, shortly after the UK’s exit from the European Exchange Rate Mechanism. “There was a discussion all throughout that year with Gordon about whether or not I would give up the FT. I was a bit reluctant because I thought I was having the best of both worlds,” Balls says. It was the denial of an opportunity that led him to commit to Brown. “I applied for the job of Africa correspondent. I would have been based in Nairobi,” he recalls. “I wanted to write [about] Africa as an economic story . . . But the FT turned me down. They said that if I wanted to go, I could immediately go to Berlin, Washington or Tokyo but I couldn’t go to Africa because it wasn’t the priority.”

Thus began a formidable economic partnership. I ask Balls what he learned during his decade at Brown’s side. “You can’t fail to be affected by and learn from his relentless focus, discipline and drive. After the LTCM Russian crisis [when the Russian government defaulted on its debts] of the autumn of 1998 . . . we ended up with our big international reform agenda, which was in the end announced from the White House by Bill Clinton and Tony Blair – but we’d written the whole thing. Gordon basically got that agreed because he had the personal phone numbers of all the other finance ministers, so he just kept ringing them up all the time. And he’s utterly dogged . . . Gordon would just ring up and say, ‘Dominique [Strauss-Kahn], it’s Gordon,’ and Dominique would say, ‘I’m at the opera, Gordon.’ And Gordon would say, ‘Well, can I speak to you at the interval then?’ Just totally relentless.”

He adds: “I also learned, though, that Gordon was never the best person at managing his team and I think to try to support and care about the personal and career development of the people you’re working with is a big part of life. And it’s quite easy as a politician to be bad at that. Neither Tony Blair nor Gordon Brown were any good at that but I’ve always tried harder at that.” At Westminster, Balls is served by a loyal and respected team. His head of communications, Alex Belardinelli, has worked for him since 2006; his diary secretary, Julie McCandless, has been with him since he arrived at the Treasury in 1997.

It was eight months after Labour entered government that Balls married Cooper, newly elected as the MP for Pontefract and Castleford, in a civil ceremony in Eastbourne, her parents’ home town. “It was very jolly and very child-friendly,” Hargreaves recalled. “It was one of the few weddings I’ve ever been to that had a soft play area.” Another guest told me that Balls had booked a batch of hotel rooms and sold them on at a profit to help fund the occasion: “the sign of a good economic mind”. The couple honeymooned at Disneyland Paris, a reflection of his fun-loving personality.

Friends describe Balls and Cooper as “devoted” to their three children: Ellie, 15, Joe, 13, and Maddy, ten (Yvette was the first minister to take maternity leave). Diaries are meticulously planned to allow attendance at school plays and football matches. Balls’s day in Cardiff is truncated to ensure that he returns to London in time for his son’s GCSE options evening.

Balls was elected in the Yorkshire constituency of Normanton in 2005. He and Cooper became the first married couple to serve in the cabinet in 2008 (he as schools secretary and she as chief secretary to the Treasury). MPs say that, having chosen not to stand for the leadership in 2010, Cooper is almost certain to run – along with Umunna and Andy Burnham, the shadow health secretary – if Labour is defeated in May.

Would Balls like his wife to win the position that eluded him? “I think that Yvette and I really want to be part of the next Labour government with Ed Miliband as leader and that is very, very much the best outcome for Britain – and that’s a good outcome for all of us. But Yvette is a very talented politician and a very special person, so whatever she wants to do in life, I’m sure she’ll do and she’ll have my 100 per cent support.”

For now, there is only one contest Balls is consumed by. “He desperately wants to win. He desperately wants to be chancellor,” an ally told me. Early on in our conversation, I ask Balls how long he has wanted to be chancellor. He says that he first studied economics at the age of 16, in 1983, when youth unemployment under the Thatcher government exceeded 20 per cent. Two years earlier, 364 economists had written to the Times to complain about the Thatcher-Howe Budget. “I saw then that political outcomes and the good of the nation are fundamentally underpinned, for good or bad, by economic policy decisions.

“I think the wrong thing to do would be to say I’ve spent a lot of time thinking about what particular job I want to do. When I was in the Treasury between 1997 and 2004, I wasn’t thinking about wanting to be chancellor. I was thinking about being involved at a hugely important time for the Treasury and the decisions that we were making.”

Balls denies that he was aggrieved in 2009 when Brown, after months of agonised deliberation, chose not to give him the post. “I thought Alistair Darling was doing the job and needed to see it through,” he tells me. It is an account contradicted by one colleague from the period: “He did sulk for a long time . . . Gordon would ring him and he would turn his phone off.”

***

The English biologist T H Huxley was known as “Darwin’s bulldog” for his aggressive defence of the theory of evolution. I think of Balls, for both ideological and anatomical reasons, as Keynes’s bulldog. The speech he delivered at Bloomberg’s London HQ in August 2010 was the most articulate espousal of the economist’s ideas by any front-line British politician.

How important an influence was Keynes – who advocated cutting taxes and increasing spending during recessions – on Balls as a student? “Very, very,” he says. “Keynes, but also learning about the way in which some economic policy in the 1970s, some discussion, took Keynesianism really quite a long way away from Keynes . . . The important thing about Keynes was that the general theory was a special case. It wasn’t a theory to apply at all times. It was when the economy got into a particular state of insufficient aggregate demand . . . Keynes cared about supply as well, and he knew that if you just spent when supply wasn’t responding, you ended up with inflation. A Treatise on Money is a very hawkish book,” he says. “The idea that a Keynesian always thinks you should spend more is a complete betrayal of everything that Keynes stood for.”

For this reason, Balls regards his support for fiscal stimulus from 2010-13 and his support for austerity now, albeit on a smaller scale than the Tories, as two parts of the same theory. “The right thing as the cycle moves on is to focus on issues that are more structural.” He adds that Osborne’s decision to “basically give up on his fiscal consolidation halfway through the parliament” – the Chancellor extended his structural deficit elimination target from 2014-15 to 2017-18 – was “a victory for sensible Keynesian thinking”.

Is he suggesting that Osborne, the supposed axe-wielding austerian, has been a secret Keynesian? “Completely, completely. In the first half of the parliament, Osborne thought that sticking to his plan was really important. In the second half, he basically had to give up. The deficit’s just not come down at all in the last two and a half years. The trouble is, he’s learned the wrong lessons and he thinks now, at the beginning of the next parliament, you should go back to the plan at the beginning of the last one.”

Balls attacks with relish Osborne’s hope of reducing public spending as a percentage of GDP to its lowest level since the 1930s; in the dying days of this parliament, he has been gifted a new dividing line. “It was the moment [the Tories] revealed where they were ideologically and I think that was the point they were found out,” he says. “I think people are turning round and calling them out. I don’t think anyone involved in the defence of our country thinks that this is deliverable. There is now deep fear in our police services. At a time when [the need for] child protection and external threats have grown, is this really the time to carry out something so huge? There’s no doubt that local government[’s] social-care crisis will deepen if these plans are put through. Net migration has gone up to almost 300,000 and we’re not going to be able to manage to pay for a border force. I think in the end that people will conclude that their National Health Service plans aren’t deliverable, given the squeeze in other areas. By the time we get to the election, the British people will think that the Tories will have to do what Tories always do and raise VAT again.”

The shadow chancellor’s relationship with Osborne is warmer than such ideological combat might suggest. “I know George Osborne much better than David Cameron. He was a young, upcoming adviser and MP when I was in the Treasury. We’ve been to quite a few different international meetings; we’ve both been going to the Franco-British annual meeting pretty much every year for 20 years . . . I can have a drink with him and enjoy it.”

Since 2010, Balls’s hinterland has broadened. He has taken up the piano, recently passing his Grade 4 exam (he aims to reach Grade 8 before he turns 50), run the London Marathon three times (raising more than £150,000 for the charities Whizz-Kidz and Action for Stammering Children) and given interviews on his cooking prowess. Were these conscious attempts to soften his “bruiser” image?

“You’ve actually got to start from the stammer, rather than the public perception,” Balls says. “I didn’t really realise what the nature of the stammer was until I became a cabinet minister. For the first year and a half, it was really hard and all the expert support I had said that the process of being open will help you to deal with it and therefore mean that you are less likely to have a stammering block on the BBC on Andrew Marr. But also if you do, the fact you’ve talked about it publicly will make it more explicable . . . And I spent three years – two years, especially – saying, ‘You can’t be serious, I can’t do that. I can’t reveal that degree of vulnerability. Nobody can do that in politics.’ But at the same time, it was really hard, so what do I do?”

The turning point came when Balls, as schools secretary, launched a DVD for teachers on how to help stammering children. “Afterwards, in the press briefing, one of the journalists said, ‘My child has a stammer. I think you’ve got a stammer. You never talk about it and I think you’re a coward.’ And I said, ‘Well, it’s not about me. It’s about the kids.’ But, actually, it was sort of about me and I was not being open about it,” he tells me. “When I set off doing the marathon, I was doing it so that I could talk about Action for Stammering Children and my stammer; that was the purpose . . . It’s too cynical to say I wanted to change my image. I think the truth is that I was dealing with a stammer and that was the way to do it. And actually, once I’d started, people responded really well.”

***

As our train from Wales rattles towards London Paddington, Balls is in high spirits. In response to my questions, he breaks into the theme tune from This Is Your Life. “You thought your second cousin, Denise, was in Australia. But, George, we’ve got Denise here tonight!”

I remind him of another auspicious date that is approaching: Ed Balls Day. The occasion is named after the moment on 28 April 2011 when, while searching for an article about himself, Balls accidentally tweeted his own name. When the anniversary falls, Twitter is deluged with identical messages. This year’s will be celebrated on the same day as the final pre-election GDP figures are released.

“I’ve no idea what to make of it,” Balls says. “It’s obviously helped by the fact that I have a memorable name [“If you think it was bad for me, think how it was for my sister, Ophelia,” Balls is fond of joking]. The trouble with the day itself is that there is a dilemma. There’s one group of people who think if I don’t engage somehow on the day, I’m a bad sport. And if I do engage, there’ll be another whole group of people who’ll say, ‘Oh, God, he’s ruined it.’ I can’t win and I sort of know that, so I don’t really mind.” He reflects: “Who in postwar British politics has had a day named after them? You take what you can, really, don’t you?”

For Balls, the mission now is to make it to another day altogether: the day when he steps outside from 11 Downing Street and holds aloft the red Budget box, and owns at last the title he has dreamed of for so long – chancellor.