Paul Tucker may – or may not - be the best person to govern the Bank of England, but he’ll get the job. Chancellor George Osborne is trying to solve a problem, not create one.
Tucker is a perfectly good candidate to succeed Sir Mervyn King in mid-2013 as governor. So is Lord Turner, chairman of the Financial Services Authority, and so is Sir John Vickers, a former economist at the Bank, head of the Office of Fair Trading and chairman of the Independent Commission on Banking.
But Tucker is currently a deputy governor. And if either or the others gets the job (the other candidates, Lord Burns and MEP Sharon Bowles won’t get it) Tucker would almost certainly leave – and that gives Osborne another senior role to fill and puts two newcomers in the Bank’s top two roles. The chancellor will thus hang on to the talent the Bank has and move a minion up the ladder to become Tucker’s deputy.
It is a dilemma faced by many organisations. If they bring in an outsider, however brilliant, they lose the insider. Unless organisations need to demonstrate they are changing, they thus promote the deputy.
That’s how King got the job ten years ago. Eddie George was retiring; King was his deputy; if an outsider had been recruited, King would have left, forcing the Bank to find a new deputy and have an inexperienced team at the top.
Who knows how well an outsider might have handled the financial crisis, but King came up through the insider route and at least the Bank had an old hand in charge when the flak came, not two newcomers.
You can call it Buggins’ turn but you can also call it succession planning. The Bank has done that: it has a perfectly good internal candidate and it would be a shame to lose him now.