The Coalition’s first big Nudge

Those of you who have had the misfortune to be subjected to an evening of my ranting about politics in the pub are more than likely to be familiar with the concept of Nudge.

To those that aren’t, Nudge is basically the Conservative party’s only real ideological innovation in the last 5 years and actually does matter. It works on the simple understanding of human nature that people have a natural inertia. In effect people are more likely to stick with the status quo rather than opt for something new. 

This insight has led to amazing policies in America, particularly in the areas of school nutrition where catering staff discovered that simply by repositioning fruit more prominently and making chocolate harder to find they could have huge impacts on the pupils’ diets.

Simply put, Nudge is the magic bullet: it has the possibility to fundamentally reorder the nature of government and society without a raft of new laws. Best of all, it’s virtually free.

With this in mind the Coalition has decided to put the theory into practice on a massive scale. Reported in The Daily Telegraph this morning was the announcement that the age of retirement is set to rise. Whilst interesting, it is the fact about half way through the article that as part of the measures the government is going to force those who currently saving in private pensions to have one unless they opt out is a much bigger deal. 

This switch from pensions opt in to opt out is a classic example of a Nudge and if the evidence produced by its architects Richard Thaler and Cass Sunstein is correct it could increase pension saving rates from around 60% to 95% or more.

Not bad for just changing one word on a form?

IPSA sucks

Last night I tweeted that Cathy Newman’s report on the problems MPs are having was ‘banal in the extreme’. Whilst, in retrospect, that might have been a little harsh, it does seem a bit much that MPs should get so much sympathetic airtime for a problem that anyone who has ever had an expense account in the private sector will know only too well. 

That being said, the report did get me thinking about the nature of the expenses system and particularly how the new rules appear to have built in additional costs that the taxpayer will be forced to bare. 

I just wonder whether, instead of having another quango to monitor expenses, if MPs were just forced to publish everything they spend and justify it to their electors then we might get exactly the same / even better outcome at a far lower cost? 

MPs are bound to loathe this idea, believing the the public are ready to haul them over hot coals at every possibly opportunity. However, if they were willing to show voters a little more trust and respect I think they would find that all the legitimate costs incurred in representing us would be happily accepted. Even during the previous excesses in 2006 expenses were only costing us 11p a month, money that you probably wouldn’t pick up if you saw it lying in the street. 

So far the LibCon government has been fairly keen on releasing data in the hope of making public services more accountable. Perhaps they should consider using the same process to make our democracy more accountable too.