A confession: I shop at Waitrose.
Readers with similar shopping habits will know that signing up for and using a Waitrose card comes with many benefits – free coffee, newspaper at the weekend, discounts on selected items etc. All you have to do is use your MyWaitrose Card when you shop. Why does Waitrose provide such benefits for card holders (and for that matter all major supermarket chains in the UK offer some kind of card with benefits)? Loyalty is one obvious answer. The more sinister is so that the company can collect information about each Waitrose shopper individually. With more information about us collectively, Waitrose can get a better sense of shopper preferences. By having information about us as individuals, the company can target persons distinctly.
A few weeks ago, I came home to find a letter from Waitrose with coupons. Some provided discounts on items that I’ve purchased in the past, but haven’t purchased in some time. Another provided a discount of 10% if I were to spend above a certain amount. My initial reaction to these was: “wow, this is a lovely coup”. This was because I thought I was getting one over on them: “I was probably going to buy these items anyway” and “I usually spend close enough to that amount anyway to get the discount, so this just means I have to spend a few pounds more.”
But then elation turned quickly to apprehension. This was not a “coup”. This was a prediction with precision by Waitrose. Because I did indeed use these vouchers on my next trip, and I felt uncomfortable in the process that in effect my ability to choose where to shop and what to buy had been manipulated. Putting it bluntly, Waitrose mapped out my preferences with such specificity that my liberty was removed.
A week or so later, I received another letter from Waitrose with coupons. The discounts this time were on different items (but ones I had purchased in the past) and the 10% discount was for a different overall amount (slightly higher than the last). But again, I use all the coupons in my weekly shop and felt even more uneasy about the whole process.
To reiterate, it is not just Waitrose that is engaging in this practice-all major retailers try it. And it has a name: price discrimination. It is the process of applying dissimilar prices to similar transactions and it is a concept well known to Competition Lawyers.
But why do I bring this up in a blog primarily concerned with tax law and policy? Because it has relevance for the debate about transparency over tax affairs. In a previous blog, I had noted that privacy rights seek generally to protect individuals from the State, corporations and other individuals, whilst conversely HMRC is vested with a duty of confidentiality in order to ensure that taxpayers are forthcoming in their affairs. The short blog concluded that on balance, elected MPs ought to disclose their tax returns. I also tentatively noted that “the justification for privacy over tax affairs is on fairly shaky ground in general.”
Today, I want to just briefly revisit this thought in light of my relationship with Waitrose. We live in times of increasing transparency. These are the days of big data. Corporations can predict our actions with an unnerving accuracy. It is an age in which algorithms, and not individuals, can fix prices between companies. Artificial intelligence meanwhile is both fascinating and frightening.
What does this mean for the argument that all of our tax returns should be published online a-la Norway? That would be more data in the hands of those entities that can use it to manipulate our choices and restrict our liberty. This, I believe, is the strongest ground today for protecting taxpayer privacy in western democracies. It is hard to imagine that compliance in the UK would be reduced for instance (as was thought would occur when taxpayer privacy was initially introduced) if tax affairs were made public. But it is eminently foreseeable that more information in the hands of corporations could cause problems.
This is not a complete volte face on my part (not yet anyway). As it stands, I do still think that the “justification for privacy over tax affairs is on fairly shaky ground in general.” But there a strong argument to be explored in respect of the malevolent uses of data and that is where there should be some focus. Perhaps that will be my next project…first though, I’ll have to do the shopping.