How the government tries to change the behaviour of homeowners and social housing tenants

Patrick Mulrenan writes:

This is the era of localism. The government wants to release organisations from top-down directives, and end the ‘nanny state’ interfering with the lives of the individual. A flurry of initiatives, including the abolition of the Audit Commission and the Central Office of Information, speak of the new government’s desire to devolve power from Whitehall and to ‘the people’.

But at the same time, all governments want local organisations and individuals to act for the common good. Without central control, how can the government do this? That’s where ‘nudge theory’ comes in. Following the publication in 2008 of ‘Nudge: improving decisions about health, wealth and happiness ’, one of its authors, Richard Thaler met David Cameron. Cameron was so impressed with Thaler’s ideas that he has had a ‘behavioural insight team’ installed in the Cabinet Office.

But what is nudge theory? It argues that humans are not calculating machines, minimising pain and maximising pleasure. If we were, we would give up smoking and eat less. Humans are essentially pretty lazy- they will do the right thing as long as it is easy to do. In one of the most quoted examples, the authorities at Amsterdam airport reduced ‘poor aim’ by men in the public urinal by 80 per cent by the simple expedient of painting a housefly on the porcelain!

At a policy level, nudge theory might include for example, requiring people to opt out of pensions or of organ donation schemes, rather than opting into them. Most people would be reasonably happy to contribute to a pension or donate their organs. We don’t need to tell people what to do, we just need to nudge them to do the right thing.

The problem is that the government is content to nudge some groups in society, but appears to be violently shoving other groups to change their behaviour. Take the case of people whose accommodation is ‘too large’ for their needs. A recent report from the Intergenerational Foundation caused a storm by suggesting that older people with spare rooms might be nudged through tax incentives to move to smaller accommodation. The Housing Minister, Grant Shapps swiftly moved to state, “we do not agree that people should be taxed or bullied out of their homes”.

What a contrast to social housing tenants. From April 2013, if working age social housing tenants occupy a home defined as too large for their needs, their housing benefits will be reduced. It is estimated that 670,000 claimants will be affected by this change.

It’s also worth thinking about who is ‘nudging’, and who is ‘being nudged’. Clearly there is a power relationship involved. It’s difficult for people in a powerless position to influence those in power. Which is why some tenants may wonder if they can ever nudge their landlords to sort out their repairs.