Poverty Porn seems to be very popular on TV at the moment. No, I’m not talking about transvestite tramps cavorting under the railway arches (now there’s a mental image you’ll struggle to shake off) but rather the proliferation of programmes featuring benefit claimants and the so-called poor. The latest one is called The Big Benefits Handout, and started on Channel 5 this week.
The idea is an interesting one, if somewhat exploitative. But aren’t they all? A family who have been relying on benefits for a number of years are given £26,000 in a lump sum – the maximum annual allowance in 2016 – provided they sign off regular weekly benefits. We then sit back and watch. Will they use the money as seed capital to turn their life around, or will they blow it in weeks on Playstation’s, partying and Players No.6?
The programme began with an economist explaining how the concept has worked very well when employed in Africa, and his optimism about achieving similar result here in the UK. I won’t go through all the reasons why any comparison with what happened in Africa is useless – but suffice to say that the backgrounds, circumstances and attitudes of people are completely different. People in Africa are poor because…well just about everyone is poor and opportunities to progress are severely limited. People in the UK are poor because – for whatever reason – they have been unsuccessful in a country where opportunities to progress are plentiful. A generalisation in both cases, but one I’d maintain is broadly true.
Anyway, three families were selected to participate, because according to the economist, psychologist and ‘welfare expert’ overseeing proceedings, they offered the greatest chance of success from all the applicants. I defy anyone watching the show to look at who they picked, and wonder what the hell the rest of them must have been like.
First up was Tony, a 50 year old bloke from Hull with no teeth and hair that looked as though it had been washed in chip fat. He lived with his wife – who had a more impressive tash than him – and their 21 year old son. Tony wanted to go into the second hand goods business, although I’d suggest selling shampoo and depilatory cream would be a safer bet as neither appears to be available in his home city.
Second was a hatchet-faced 33 year old single mother from Liverpool with 15 year old twins and an 8 year old daughter. She hadn’t worked for 18 years, which if you do the maths means she hadn’t worked at all. Her goal was to get a job. Why she couldn’t do that without being handed £26,000 first, wasn’t really explained. Maybe it will become clear later.
And then there was Scott, a father of four – also from Liverpool who hadn’t worked for 8 years since he gave up his job to help look after his son who has learning difficulties. At first I had quite a bit of sympathy for him until my daughter (who is beginning to make me look like a woolly liberal) pointed out that he had two much younger children, and he must have realised he wasn’t in a position to support the family he already had, when he decided to add to it anyway. Scott had a house full of snakes and reptiles and wanted to start a business offering exotic animal themed children’s parties.
I’m particularly interested to see how Tony and Scott progress in the remaining episodes. I once saw a Barclays Bank manager being interviewed about his job advising lottery and football pools winners. He said that many of them wanted to start a business, but he usually advised against it. His reasoning was that true entrepreneurs don’t wait for money to land in their lap before putting plans and ideas into action. They get the money somehow, or find a way to do it without money. The absence of money is rarely an obstacle for those who are likely to succeed. This TV experiment is on a smaller scale but I think the same may apply – money is unlikely to be a deciding or enabling factor. We’ll see,
In the first show last night, neither Tony nor Scott got off to the best of starts. Tony’s first move (after blowing £400 on the obligatory Playstation for his son) was to go looking for a shop to house his second-hand goods business, complete with rent, rates and utility bills. Scott’s first move (after also investing in a games console) was to spend £450 on a Racoon. I’m no expert, but that doesn’t sound like the biggest draw to a children’s party.
The details are always different, but here at Streetwise we see people making this kind of mistake all the time. They encumber themselves with overhead, stock and equipment they don’t need before they’ve even established whether there’s a business to be had, let alone before they’ve approached any potential customers. They invest and commit heavily in something that might not work, and it’s rarely necessary.
Tony could have started his second-hand goods business online, trading via eBay, Gumtree and Amazon. No need for premises or overhead. This would enable him to dip his toe in the water and to experiment with what sells and what doesn’t without undue commitment. Scott could have started his party business with the animals he already had. His first move should have been to structure and package what he had to offer and then approach potential customers to see whether there was a market.
In truth, neither of them needed £26,000 to kickstart their business ideas, but the fact that it was there, caused them to make unwise decisions. The reality is that £1,000 would have been enough to give both of them a platform on which to build. If they do succeed, it won’t be the money that facilitated it, although it may have given them some kind of psychological permission to try.
So how do I think they’ll do? Well I like Scott’s idea. Children’s parties are big business now and the exotic animals offer a unique twist. I think he will end up spending far more than is sensible or necessary to get the business off the ground, but there is the potential to do well. Ultimately it will depend on how well he’s able to implement the plan, and how disciplined he can be with his spending.
I fear Tony will not do so well unless he has a re-think. If he takes on the shop it will create a profit sapping overhead from day one. It will also limit his flexibility and his potential customer base to those in the immediate vicinity. Sometimes a shop is necessary. A used goods dealer doesn’t need one in 2016, and certainly not from day one.
Whatever the outcome for the three families, I don’t think we can read too much in it for the wider population on benefits though. These people have already been identified as having a better chance than average of succeeding, and the very fact that so much attention is being paid to them will make success all the more likely. Look up The Hawthorne Effect if you’re unsure how this might work. But it will be interesting to see what happens as they come to terms with both running businesses for the first time, and managing their own finances.
Perhaps not as interesting as Transvestite Tramps might be, but surely that’s only a matter of time.