The hide handling put your facial strings

But is the secretive Goverment ‘nudge unit’ that tries to manipulate our behaviour a help - or sinister?

Late l ast November, eight million envelopes began dropping through pensioners’ letter boxes up and down the country.

Inside was nothing unusual: a routine Government reminder about the winter fuel allowance of up to £300 to help with energy bills during cold months.

But printed on the envelope was a 20word message reading: ‘Many people save up to £200 on their energy bills by switching tariff. Check your energy bill or visit goenergyshopping.co.uk.’

These householders were guinea pigs in an enormous psychological experiment run by the Government.

Unbeknown to them, officials were keeping tabs on the Go energy shopping website, the official energy switching site run by regulator Ofgem.

They wanted to see if their message triggered a surge in numbers logging on to change their tariff.

In the spring, figures showed up to a fifth more users — understood to be in the low thousands — had used the site compared to the same time the year before.

The purpose of their exercise? A test by the Government’s secretive ‘nudge unit’ of a theory that our behaviour can be manipulated subtly to help us make what it believes are better decisions.

Yet many will be deeply unsettled at the persuasive intent of the mass mailing. Who is the Government to decide what’s best for us and our finances?

And who is to blame if a cash-strapped pensioner sees the message and, in trying to change to a better tariff, accidentally ends up choosing one that costs more?

MINISTERS IN THRALL TO BEHAVIOUR CONTROL

Once, ministers and policymakers would study economics to get to grips with the major issues of national debt, stability and the impact of global supply and demand. But now there is a greater f ocus on ‘ behavioural economics’: that is how economics can influence consumers’ behaviour. Two U.s. academics — Cass sunstein and Richard Thaler — wrote the book Nudge, Improving Decisions About Wealth, Health And Happiness in 2008. The bestseller won a string of awards and explores why and how we make decisions. The authors argue that a few small adjustments to the way something is presented — a simple ‘nudge’ — can make us choose differently, and a tiny change can have a huge effect.

examples included boosting healthy eating by getting supermarkets to put wholesome food on the middle shelf, since shoppers tend to reach for goods at eye-level.

enrolment into a workplace pension is another example. By turning people’s natural inertia on its head, workers began to save money for their future by default.

This kind of persuasive action is very useful to governments desperate to save money. The traditional way for politicians to change behaviour is to draw up legislation. This can be unpopular and cost millions to implement.

If, instead, policymakers can subtly ‘nudge’ people into behaving the way they want, it makes changing things a whole lot easier.

When the Coalition took power in 2010, promising to make huge cuts, the Cabinet set up the Behaviourial Insights Team — nicknamed the nudge unit — within a matter of months. After five years, it claimed to have had huge success and identified £300 million in savings.

TONY BLAIR’S FORMER AIDE RUNNING THE SHOW

ITs home is a drab office in a back street close to Whitehall, staffed by a 60 predominantly young academics — many in their 20s and 30s — with degrees from t op- r anking universities such as Cambridge, Oxford and London, as well as American Ivy League colleges.

Running the show is David Halpern, who between 2001 and 2007 was the chief analyst in Tony Blair’s strategy unit.

Before entering government, he held posts at Oxford and Harvard.

Until last year, the team was run entirely by Government staff, but now, a third is owned by its employees, a third by the Cabinet Office and the remainder by an organisation called Nesta, a charity that says its aim is to fund innovation.

However, the unit does nearly all of its work for the Government.

Departments pay the unit to carry out experiments: 150 have been carried out in the past five years.

The unit is also free to take on private projects and recently carried out work cutting tax evasion in Guatemala, funded by the World Bank.

since 2010, the nudge unit has been experimenting with ways that the theory could be more widely used.

The tests usually take the shape of randomised controlled trials — a gold standard for any kind of experiment, whether social or in a lab. Or it can use more general practices, such as a mass mailing or public adverts.

HOW THEY GET US TO CHANGE OUR MINDS

As WeLL as tackling major public concerns, such as trying to stop pregnant women smoking and boosting Army reserves, its staff have sought to see if it can help households save money, too.

In one task, it was asked by HMRC to help it find ways of cutting unpaid tax.

As part of this, the nudge unit decided to target those who regularly failed to pay up on time. staff decided to focus on triggering guilt and set up a test involving 100,000 habitually late payers ahead of the end-of-year tax deadline.

They were all sent texts saying: ‘Not paying tax means we all lose out on vital public services like the NHs, roads and schools.’

Weeks later, researchers looked again at who had paid up. They found two-thirds of those paying the most tax — 10,000 or so in the test — had paid up on time.

shoppers at John Lewis were the unwitting guinea pigs in another test — this time, on behalf of the Department of energy and Climate Change.

The idea was to coax shoppers into buying more energy-efficient combined washing machines and tumble dryers. Over time, these cost less because of lower electricity bills to run them.

The problem is that these machines can be as much as £200 or so more expensive than less efficient models.

To overcome this, the nudge unit decided to print a cost comparison for sales staff to show customers a lifetime electricity cost. This would typically show how it might cost just £200 in electricity bills to run an energy- efficient tumble dryer over its lifetime, compared with £350 for a less green model.

However, the test had mixed success. While sales of environmentally friendly washer-dryers went up, those of regular tumble dryers and washing machines stayed roughly the same.

Researchers guessed the lack of takeup was because there is such a dramatic cost difference between the machines.

The team also managed to extract charity donations from banking staff by plying them with sweets. They found charities hoping to persuade people to donate a day’s wages did well when potential donors were sent a bag of sweets and a personalised email from their boss.

such tactics had a better impact on donation rates than a visit from a celebrity or one-on-one chat with a volunteer.

Just 7 pc of workers made a donation after their brush with minor stardom. By contrast, nearly one in five did so after receiving the sweets. ‘The email and sweets, which aimed to bring on resci pro city - a response to friendly action- were the most powerful interventions, says Michael sanders, the unit’s head of reaearch for education and charitable giving.

Pensions are a new target for the unit, For years, those approaching retirement have been baffled by acres paperwork sent by pens

This confusion meant many struggled to work out how much they had put aside for.