Just when everything at the Poor Relation Hotel seems to be running smoothly, Sir Philip brings in another poor relation, Mrs. Budge. When Sir Philip presents his paramour, Lady Fortescue swears great oaths and says the woman is probably related to half the costermongers in London and certainly does not possess one rich relative. Mrs. Budge does nothing but eat all day and refuses to do any work around the hotel. Worst of all, Miss Tonks seems to be taking the romance between Sir Philip and Mrs. Budge quite hard.
In the middle of all this commotion, a certain Lady Carruthers and her daughter Arabella come to stay at the hotel. Lady Carruthers is a widow trying to pass herself off as much younger than she actually is. To this end she dresses poor Arabella, who is all of nineteen, as a young schoolgirl and refuses to bring her out. It is up to the poor relations to deal with the lazy Mrs. Budge, find Arabella a husband, and trounce her terrible mother!