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Born in Barton Mills, Mildenhall, Suffolk, Balfe spent time in a children's home in Sheffield. He began working in a bakery in 1960 and joined USDAW. The following year, he moved to London and worked first for the Crown Agents for Overseas Governments, then at the Foreign Office.
In 1970, Balfe resigned from the Foreign Office in order to stand as the Labour Party candidate in Paddington South. He was unsuccessful, and instead became the Research Officer for the Finer Committee on One-Parent Families.
At the Greater London Council election, 1973, Balfe was elected in Dulwich, serving until 1977. During this period, he was also political secretary of the Royal Arsenal Co-operative Society. At the first direct elections to the European Parliament, in 1979, Balfe was elected as the MEP for London South Inner. He held his seat until its abolition in 1999, then won a seat from fourth place on the party list for London. He supported a single European currency and was a member of the European Movement.
In late 2001, Balfe stood for election to the post of quaestor in the European Parliament, against instructions from his party group. As a result, he was expelled in January 2002. In March, he joined the Conservative Party, the first elected Labour politician to do so since Reg Prentice in 1977.