Review: BBC2's "How to Beat Tough Times - Money Watch"

Watched the first episode of a new BBC2 series on personal finance this evening. It had a very lightweight feel, despite an appearance from Mr Omnipresent - Martin Lewis. Perhaps that was due in part to the permanently smiling Sophie Raworth, who co-presented the programme; or maybe it was the succession of 'experts' trotting out the blindingly obvious to people who seemed to have missed the Credit Crunch completely.




Martin Lewis owns and runs moneysavingexpert, a very fine money saving website, and competitor to a website I've written for - moneymagpie.com. I remember Lewis being roasted alive by Jon Snow on Channel 4 News, who took him to task for recommending to his (million-plus) subscribers that they put their money into Icelandic banks! For some reason Lewis struggled on that occasion; all he had to say was that his financial advice always comes with caveats - that nothing is guaranteed and you can lose all your money. Personally I thought that anyone who put their money into schemes offering too-good-to-be-true interest rates was a mug. Which is why I never did it ;)



Back to the BBC2 show. They started with some kid-economics, explaining why purchasing power will decrease during the recovery when it seemed to increase during the great recession. They explained it by examining interest rate variations (historically low interest rates that were used to save people from their own mortgages have nowhere to go but up). Personally I think it would have sufficed to say that there is a time-lag between economic decisions being made and their effects trickling down to the masses.



An expert (actually several) were pulled on. An interesting book I am reading, "The Black Swan" by Naseem Nicolas Taleb explains why, on matters of economic and (especially) geo-political forecasting, 'experts' are no better at predicting outcomes than the Man In The Street. Briefly, they cannot tell the future, and the past is not a good predictor of the future - other than to predict that the future is unpredictable. Take every war and every international crisis as an example. There are too many variables to be accurate about inflation rates even next year, never mind in 5 years' time.



Still, BBC2's 'expert 'played it safe. He predicted a 30% fall in house prices over the next few years. "Over the next few years" can mean absolutely any time frame; and predicting a house price correction requires no special, esoteric knowledge at all. He advised a young renter that buying a house was therefore ‘risky’. Nonsense. If you're in it for a quick buck, then yes, it's risky. Otherwise bricks and mortar is an excellent investment. I mean 'investment' in the sense of something long-term to give your family a place to live, not in the sense of it outperforming the FTSE and making you a pile of cash. Even if you're stuck in negative equity, you should just stay put. The UK is a small, overcrowded island and eventually the prices will slowly rise again. Houses are for living in, not for making people rich. You only 'invest' if you already have a place and therefore have less to lose. Why can't people understand this basic fact?



The main thrust of the programme seemed to be that starting a small business was a way of beating rising unemployment, especially given the new tax breaks for small startups (outside London). The programme sensibly included the caveat that about half of small businesses fail within the first year, so that demonstrated good balance. Another alternative it seemed to suggest (through strong focus on happy-looking examples of such people) was that part-time working was a way to keep your job - or that at the very least it was better than being on the dole. Nothing ground-breaking in that though.



Martin Lewis then talked to a family of spendthrifts who were clueless about how much money they were spending and advised them to cut down. Apparently a £2.50 cappuccino a day equates to £625 per year, which would buy you a 'nicer holiday', Martin said. I could see the mindset of this family - they seemed to think that several holidays per year were their birthright, on top of their cappuccinos. Spending less was something alien to them.



Lewis then gave them a list of ways they might be able to earn extra money. It all involved some sort of extra work, which evidently this family had never thought of. His suggestions included: selling spare junk around the house on Amazon or e-Bay; letting out their drive or even their car; getting a cashback creditcard and paying off the balance in full each month (fat chance with that family, I have to say); carry out an ironing service (the wife turned her nose up at that one); carrying out online surveys at home for a few cents at a time; and allowing your house to be used as a film location. The wife's eyes became like saucers at this one. I just kept thinking: this family is so stupid they actually deserve to sink.



Lewis could also have mentioned the following: rent a spare room out to a lodger and keep the first £4k tax-free; do some overtime; or take a 2nd job as a silver service waiter or something similar at weekends. In other words: have a little less leisure time, ditch the wide-screen tv and WORK MORE.



So all in all "How To Beat Tough Times" told us very little, sensationalised wherever possible and stated the blindingly obvious throughout. I was expecting to hear something challenging or learn something new, but I didn't. Even the 'experts' predictions had no more basis in fact than anything you, the reader, might predict. It had the air of trying to fill the air time with doom-laden stories just to create a response to something which has in fact been analysed a thousand times already, in greater depth and with more incisive commentary: the Credit Crunch and the recession which followed it. Maybe if Robert Peston or Hugh Pym had fronted it this programme may have had something vaguely useful to say. As it was it felt like watching a daytime TV chat show.