In A Source of Blessing, Mick describes the evolution of railway pension provision from the era of Victorian friendly societies, through nationalisation, British Rail and privatisation to the enormous £36bn behemoth that exists today.

In doing so, he has also revealed some of the challenges and conflicts that had to be addressed – whether in design, funding or regulation, along with the importance of effective governance and collective provision in meeting those challenges.

Above all, Mick reminds us that the long-term sustainability of decent pensions depends on actively maintaining a balance between adequacy, affordability and fairness, and that sustainability means more than just balancing today’s numbers.

A somewhat shorter read – though equally compelling – is Catherine Howarth’s pamphlet, published in September by the Fabian Society, entitled Whose Capital? The Case for Building Democratic Accountability into Britain’s Pension System.

While Mick’s book tells the story of the evolution of workplace pension provision over the past two centuries and of the critical role of members’ voices in that process, Catherine offers a brilliant analysis of where we are now as an industry, the challenges we need to be mindful of going forward, and just how much we could achieve if we make the right decisions now.

She argues that recent decades have seen a decisive shift in economic power away from democratic institutions towards “markets, corporations and financial actors”, to the point where governments remain accountable for economic outcomes, but many of the decisions affecting those outcomes lie elsewhere.

Yet despite this somewhat gloomy analysis of the here and now, Catherine sees the current changes in the structure of UK pension provision as an opportunity to begin to redress that imbalance. Pension funds are declining in number but growing in size, with greater expectation that they will play a bigger role in supporting UK economic growth and boosting domestic investment. As a result, as Liam Byrne MP suggests in his foreword to Catherine’s pamphlet, the pensions industry is set to become “one of the defining institutions of 21st century Britain”.

All well and good, except that, in Catherine’s words, “the governance of pension capital has not evolved alongside its growing scale and influence. Pension savers increasingly bear investment risk and live with the consequences of pension investment decisions, yet they have little say over how their capital is governed and put to work”.

Put another way, fewer, larger pension schemes exerting ever greater economic influence is not necessarily a bad thing. In fact, it could and should be a great thing, but only if this is accompanied by better mechanisms for members’ voices to be heard (as the TUC has recently argued), greater transparency exists around stewardship of assets, and more effective lines of communication are established between trustees and the people whose assets they manage. In short, pension funds run on democratic lines can deliver better outcomes not just for members but, as their influence grows, for the broader economy.

The concern that I and others have raised, and which Catherine notes again in her analysis, is that far from being more democratic, power within pension institutions is becoming more concentrated.

LCP research earlier this year suggested that fewer than fifty trustees oversee more than half of all occupational DC assets. It’s striking that many of the arguments used in opposing greater member voice in pensions (for instance that ordinary people lack the necessary expertise or judgement etc) were used in the past by those opposing greater democratic participation in wider politics and society.

Such attitudes should not – indeed must not – prevail. Mick Cash’s account of rail workers’ pensions illustrates the value of keeping member voice at the core of successful pension provision.

And Catherine Howarth’s pamphlet articulates precisely why these democratic principles – of representation, accountability and scrutiny – must continue to apply in pensions, not only to ensure better scheme governance, but also to achieve “a more credible settlement between citizens, markets and the state: one in which capitalism remains dynamic, democracy remains meaningful, and neither is asked to do the work of the other alone”.

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