Still waters hide turbulent times

Jonathan Punter
Jonathan Punter Chief Executive

Time spent on a narrow boat slipping along Britain’s restored canals is to experience a pace of life from a time gone by.

The clock ticks less insistently as you busy yourself with ropes or the helm to be part of what was once at the heart of Britain’s roaring industrial revolution.

Yet the history of our canal network is a symbol of the kind of change we are experiencing at the moment.

Investment and engineering flair turned Britain’s waterways into the principal trade route for the raw materials, manufactured goods and commodities connecting our major cities to the rest of the country and the world beyond.

Just one horse pulling a barge could move 30 tons of coal – ten times more than the same horse harnessed to a cart. In the late 18th century, “canal-mania” led to rampant speculation on shares as the 4,000 miles of canals were built.

As befits the restless innovation of the age, this floating world was becalmed by the advent of the railways in the mid-19th century. An entire industry and way of life slowly, but steadily, vanished.

Happily, you get a sense of how it must have been, even if the wharf side warehouses are now apartments, like they are on the Kennet and Avon. The canal renaissance is today being driven by tourism and leisure and is a fascinating voyage into our recent past.

Our next journey is a bit harder to second-guess. Will the vote to leave the EU be one which will usher in a host of new, market forces? Will it lead to inexorable decline or spark new ways of doing business (as did the railways) and a re-invigorated new age of commerce?

One difference is that, for most of Europe and other developed nations, the infrastructure is in place. Communication networks are now digital and investment global. Whatever happens from now, this will extend, not shrink. Millions of tonnes of goods are now transmitted down super-fast fibre, not wending their way past a lockkeeper’s cottage. That clock ticks more loudly than ever.

Our ability to thrive as a nation continues to depend on trade and, to a large degree, on how it is financed. We have long since swapped coal for credit instruments, constructing the trade networks and relationships shaping the 21st century.

The Britain of coal and iron, Brunel and Wilberforce, saw rapid population growth during the 18th and 19th centuries, fuelling its productivity. Now, immigration is the key factor bumping up our headcount and providing more workers in what would otherwise be a flat or even declining total.

Japan demonstrates that even stagnant population growth can mean an increase in GDP per head even if its economy remains stuck. The trouble is, it also means interest rates stand still.

While I’m sure we can adapt to whatever Brexit actually is, I am also conscious that the new normal we hear so much about is, actually, uncertainty itself. Britain is stepping forward into a brave, independent future (or off a cliff, depending on your view) as the rest of the world grapples with its own convulsions. Jitters over the Chinese economy and Europe’s banks have been knocked off the front pages by who will be America’s next president next month. Everyone is looking towards that contest.

As you may have heard at our recent annual conference, balancing the here-and-now with the objectives of a long-term future is a critical part of managing your pension scheme. While there are a number of tactics to employ, the central consideration is not to be knocked off course.

I suppose that’s a little easier in a canal! You might be hemmed in and your speed restricted but there is a clear, designed way forward, even if there are locks to navigate and other obstacles to overcome ie other barges, over-hanging trees and, er, ducklings.

If, at journey’s end, you don’t want to find yourself marooned in a drained, derelict channel, adapt to the inevitable changes which are always around us. It is essential to keep going. After all, the canals becoming tourist spots today were started in the age of the horse (as were pensions, founded in the late 19th century) and are blossoming into new life in the age of super-fast broadband.

Enormous challenges remain but solutions will emerge amid the uncertainty. It’s the uncertainty we have to get used to.