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Current Affairs, Politics

A Good Old British Panic

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So after the announcement from the government last night, calm seems to have returned to Northern Rock branches across the country – well aside it seems for Golders Green where savers were still queuing this morning with the government guarantee being seen as some sort of ruse.

However social commentators are already starting to draw comparisons with another September panic – the UK Fuel Protests, or more precisely what happens if ever there is a rumour of another blockade. For example in September 2005 after a series of news stories about potential protests, long queues started forming outside petrol stations, and thousands were emptied of supplies. However the protesters said several times that they had no intention of blockading refineries again, and in the event only a small number even protested. The panic produced more of a problem than the event itself.

In exactly the same way, the Northern Rock applied for a bail out from the Bank of England, and despite people regularly saying that the bank was financially solvent, queues quickly formed of savers withdrawing their money, exacerbating the problem.

So was it right in both cases for people to panic? In the case of the September 2005 Fuel Protests people only needed to remember a few years before to the chaos that was caused by the first UK Fuel Protests. There was also a general level of mistrust both of the protesters themselves, and of government assurances. This time around, again people distrusted government and official assurances. Also anybody who looked at the compensation scheme realised that for any sort of reasonable level of savings, you were going to lose – only the first £2000 is fully guaranteed. Certainly back in 2005, whilst I didn’t queue for hours, I did make sure I’d filled up both cars so as we could get to work, and if I’d had any money in the Northern Rock I’d probably have moved it as a precaution.

So maybe the commentators are slightly wrong, the British don’t like a good panic – they just fundamentally don’t trust people in authority and what they say – hence why the people in Golders Green were still withdrawing their money this morning.

Politics

Fuel Protests – The Effects

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So it’s Saturday morning, after three days of Fuel Protests, the effects have been as predicted by the BBC, almost non-existent. The only disruption was as a result of the M4 go-slow yesterday.

Looking back to Wednesday, lets remind us what Andrew Spence promised:

“We want an immediate reduction in tax to bring prices down or as of 6am next Wednesday there won’t be a refinery left open.�

That promise resulted in several days of panic buying, but when dawn on Wednesday arrived, what happened? The article in Thursdays Times sums it up as a flop.

Spence himself only managed to get 12 protesters to his local refinery, and turned up on TV on Wednesday morning complaining that the Police had moved everybody to a layby a quarter of a mile from the entrance. All over the country, what protesters did appear were outnumbered by press and Police.

On the radio protesters were proclaiming 99% support, not the opinion I got. Whilst most people would like fuel to be cheaper, almost nobody can fathom why wasting a vast amount of expensive fuel by driving 60-100 gas guzzling vehicles at a crawl across Wales and back proves anything.

Just to really add to the irony, as promised, since wholesale petrol prices have dropped back, the fuel retailers also cut back prices. However the point had been made that prices might have fallen sooner had it not been for the massive demand earlier in the week.

The final comment on the whole protest was when the Road Hauliers Association said that fuel prices weren’t the real problem with the haulage industry anyway, and that a tax cut would only delay the current problems. The problem is actually the cut-throat competition in the sector. Whilst some hauliers are willing to work for almost no profit, and the large hauliers have negotiating power, the rest are left to flounder. A cut in fuel prices would result in large parts of the industry cutting their rates, and we’d be back to square one. Also whilst farmers supported the protests last time, this time there were few to be seen, as high fuel prices mean more money for the burgeoning bio-diesel market – with Tesco selling bio-diesel since 2004.