Here’s a wheeze: the taxman is trying to get stubborn payers to cough up what they owe by sticking a handwritten note proposing a chat (and including a phone number to call) on his letters.
It looks like a clever – if unusual – folksy touch to try to encourage tardy citizens to pay their dues. But there’s something more serious behind it. It’s actually a form of so-called ‘nudge theory’ – a branch of behavioural economics that aims to improve our lives using small encouragements, or ‘nudges’, to get us to act differently.
This new discipline was thrust into the limelight thanks to American academics Cass Sunstein and Richard Thaler, who penned a best-selling book called Nudge: Improving Decisions About Wealth, Health And Happiness, published in 2008.
It scooped a hatful of awards for exploring why and how we make decisions; in a nutshell, they argued that just a handful of tiny changes to the way something is presented — a ‘nudge’ — can influence us to make hugely different choices.
For example, the writers found people would eat more healthily when supermarkets stacked the most nutritious items on middle shelves. Why? Because shoppers have a habit of picking goods stored at eye-level.
Or take saving for retirement. The authors highlighted how automatically enrolling employees into a workplace retirement fund can boost pension provision. How? By harnessing people’s inertia to their financial advantage. With the onus now on staff having to actively opt out if they don’t want to put cash aside for a pension, many people’s inclination to do nothing now works in their favour.
HM Revenue & Customs is keen to put the theories into action. It believes sticky notes could work as a personal ‘nudge’ to prompt refuseniks into paying up. The thinking here is that a handwritten note will trigger a reaction, since people are much more likely to respond to a personal touch.
Currently being trialled with a small number of taxpayers, it could be rolled out more widely if successful. The Government is a huge fan of ‘nudging’, too. Six years ago, when the Con/Lib Coalition took power, it pledged to make huge cuts and set up what was called the Behavioural Insights Team — which won the nickname ‘the nudge unit’.
Last year, it announced its actions – including a prominent message for people to switch energy supplier on winter fuel allowance reminders – had helped secure £300 million in savings (though the unit’s now been spun off and is part-owned by the Cabinet Office).
So what’s not to like? Well, some critics have voiced concerns that individuals are being manipulated without knowing it. I’ve previously held the view that the nature of nudge economics – effectively hidden persuasions to improve your life – had a dubious element to it.
Put bluntly, the argument goes, what right do those doing the nudging have to decide what is better for us? And who is watching over the ‘nudgers’ to ensure nothing untoward is happening?
But my mistrust has faded having been newly encouraged by greater general awareness of the theories, positive feedback from the public and the theory’s genuine intent to improve individuals’ lives, health and finances. After all, on reflection, does a nudge experiment such as HMRC’s attempt to encourage proper payment of taxes really stand up as an attack on civil liberties?
I don’t believe so. In the case of those Post-it Notes, let’s not forget that those who don’t pay their due taxes force an unfair cost onto everybody else. Nudge theory aims to help redress this. As helping hands go, it’s one worth holding on to.
