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(1) the payment out of money provided by Parliament of
(a) any expenditure incurred by a Minister of the Crown or government department under the Act,
(b) any increase attributable to the Act in the sums which under any other Act are payable out of money so provided;
(2) the payment into the Consolidated Fund of any increase attributable to the Act in the sums payable into that Fund under any other Act.[Mr. Stringer.]
Mrs. Caroline Spelman (Meriden): I have been asked to present a petition about the future location of the national football stadium. One of the proposed sites is in my constituency on greenbelt land known as the Meriden gap. It is a narrow strip of land five miles wide between Coventry and Birmingham and there is very strong local feeling about the possible siting of such an amenity on green-belt land on a point between two major conurbations. More than 2,000 signatures have been collected and the petition urges
And your Petitioners, as in duty bound, will every pray.
Miss Anne Begg (Aberdeen, South): I suppose I should begin by explaining what the women empowering women scheme is. It is not, as the title suggests, an organisation that is aimed at helping women looking to climb the promotion ladder and hoping to break through the glass ceiling, nor is it a company offering assertivees training to women, nor is it the latest feminist craze. The name is very misleading. The scheme should not have been called women empowering women. If I were to call it women exploiting women, women defrauding women or even women setting out to con other women out of lots of money, the House would have a much better idea of what this so-called giving scheme is all about.
The scheme has been rampaging through the Aberdeen area since the summer, leaving behind large numbers of women who are now up to £3,000 in debt. That is why I was keen to secure an Adjournment debate to highlight just how insidious and invidious the scheme is and the dangers that it poses.
What is the scheme? Perhaps it would be easier to understand it if I described it as a pyramid selling scheme that does not involve any hard work such as selling anything. Women are enticed into the scheme with the promise that if they hand over £3,000, they could get £24,000 in return. The women enter at the giving level when they hand over the money and then move up the pyramid to the receiver level when they get the pay-out.
The women are told that they cannot lose, that everyone is a winner and that it would be foolish to give up such a chance to obtain some extra money. The groups meet in each other's houses and the excitement means that it is very difficult to resist the hype. There is always someone there who has already won lots of money. However, that can happen only if there is a ready supply of new people with £3,000 to enter the scheme.
It does not take long for the supply of victims in an area to dry up, leaving the vast majority of those who have entered with little or nothing. For every person who gets £24,000, there must be at least eight others who get nothing.
My attention was drawn to the scheme in July when the Aberdeen newspaper, the Evening Express, ran a large spread about the excitement that the scheme was generating and named some of the people involved. They included a local police woman. The newspaper pointed out the dangers of the scheme and showed graphically how it was impossible for everyone to be a winner and how quickly an area could be saturated.
I had believed that the scheme had run into the sand or had moved to another area, but it appears that it began in the Isle of Wight and has worked its way north. However, I was shocked to discover in late October, when The Press & Journal in Aberdeen ran another story, that the scheme was still running. I heard stories of men being recruited to the schemeit had now changed its name to "friends empowering friends"and I was given a leaflet that was delivered to doors in Aberdeen and Aberdeenshire and that encouraged women to part with £100 to get £800 back.
All that smacked of desperation. The people who had been suckered into the scheme were desperately trying to get their money back any way they could. That is why I raise the issue now. It is the lead-up to Christmas and many women, including single parents, are desperate for money. They are being conned into believing that if they get their money into the scheme now, they will have extra money for Christmas.
I am very concerned that women who are already in financial difficulties are still being sucked into the scheme. None of them can possibly be a winner at this late stage. The winners are long gone; they won back in the summer. Those who are entering the scheme now are at the bottom of the pyramid and will never get their money back, far less win. It is sad speaking to the women who have lost out. They swallowed wholesale the belief that they could not fail, that the scheme was well run and that there would be an endless supply of new people willing to "invest", as the schemes call it, their money.
What I have found most insidious about the scheme is that it is wrapped in the cloak of women helping each other by investing in each other. Many of the early participants were intelligent women with good jobs. They had to be because they had to be able to put £3,000 into the pot and be willing to take the risk of losing it all. For those women, it was more like a gamble: they accepted that they might lose, and presumably they could afford to. It was not, however, the early participants who lost, but the poorer women they tricked into following them who could not afford the stake money in the first place, far less afford to lose it.
I also wonder about the morality of the so-called winners. They must know that in order for them to have won, a number of others must have lost. I wonder whether they have no conscience about exploiting others and possibly even their friends. I do not suppose that they declared their unearned income to the tax man either.
One of the women I spoke to said that the heart group that she joined had changed the rules as it went along. She had received no money and was puzzled that it could be allowed to do that. It was difficult explaining to her that it was a con from the start: if no money was being created, it was bound to run out if people were winning. In the early days some women praised the scheme because in this cynical day and age it was wonderful that women were trusting strangers with large amounts of their money. The trust did not last long, and if only they had been a bit more cynical they may have recognised the scheme for what it wasa complete fraud.
The woman that I spoke to on GMTV had invested a total of £600 in two different schemes and is yet to win anything, but she still has faith that she will soon get more than £2,000 back. "I've made lots of new friends," she said, and I wondered how long they will last when she loses her money to them, or they lose to her.
Mr. Simon Thomas (Ceredigion): I am sure the hon. Lady is aware that the scheme is nationwide. It is called the hearts scheme in my constituency where it has had a similar effect to the scheme in Aberdeenshire. Does she agree that the scam, which is in fact women impoverishing other women, is based on ignorance? Although the scheme is not illegal, and it remains to be seen whether the Government will make it illegal, it would be useful if local trading standards officers were
Miss Begg: I intend to ask the Minister whether the scheme is illegal under existing legislation, and I have several questions that I will pose later. The hon. Gentleman is right when he says that ignorance is the problem, but it is difficult to educate people about such schemes. No matter how much I said to the woman I met this morning about how the scheme cannot work, how it will run out and how there is no possibility of her winning, she did not believe me. It was difficult to persuade her that the arithmetic did not add up. Indeed, some areas are blaming the scheme's collapse on the bad publicity. They have not realised that it cannot succeed and cannot work.
I requested an Adjournment debate on the scheme for two reasons: to highlight the evil, as the hon. Gentleman said, and to generate more publicity to warn those who are contemplating getting involved of the dangers. I hope that trading standards officers in each area are doing that. Many local newspapers such as mine in Aberdeen have been useful and helpful in highlighting those dangers, although that has not always worked.
My second reason is that I want to ask the Government to ensure that there is effective legislation. I want such schemes outlawed. I know that the Government cannot legislate to stop people's greed, but many of the women now being drawn into the scheme are not greedy. Some just want to make a bit of extra cash so that they can get more for their kids this Christmas, and they are victims of a very clever con, which has fooled many intelligent people.
I know that the DTI has posted a warning about such schemes on its website, and although I am sure the website is extremely popular, it is not exactly a means of mass communication. Women in Aberdeen and the woman to whom I was talking this morning still have faith in the scheme simply continuing. They do not believe the warnings, but will always believe the hype. The Evening Express and The Press & Journal in Aberdeen have run a number of stories pointing out the dangers and giving dire warnings, but people are still joining the scheme in the north-east of Scotland. Education alone will not be enough, which is why we need to consider legislation.
I know that the Government outlawed the running of pyramid schemes in the Trading Schemes Act 1996, and regulations under that Act came into effect in 1997. I know also that the Minister, in a previous guise as the Minister for Competition and Consumer Affairs, issued a press release on 15 February 1998 with the headline "Griffiths Warns Against Get-Rich-Quick Schemes". Although my hon. Friend now has a different remit, he is obviously still interested in the issue.
The regulations passed under the 1996 Act govern schemes involving the supply of goods and/or services. However, I understand that the intention of the Act was to outlaw money circulation schemes. That is borne out by an article in The Times of 6 February 1997, so this Government do not get the blame, but a previous one do. The article said:
It appears that some states of the USA have managed to legislate so that not only do those who originate or organise the schemes fall foul of the law, but it is illegal merely to participate in them. Under article 23 of the New York General Business Law, anyone participating in such a scheme can be charged with the commission of a crime and any money received by them can be confiscated. The Texas Deceptive Trade Practices Act defines an illegal pyramid promotion as a plan by which a person gives a consideration, usually money, for the opportunity to receive money that is derived primarily from a person's introduction of other persons to participate in the plan, rather than from the sale of a product. If the USA can do it, surely we can too. Perhaps we already have the legislation. I await the Minister's reply.
I appreciate that anything that the Government do will not change things overnight and it will not help those of my constituents who already face a bleak Christmas because they were duped into believing that they were investing in something that could not fail. Inevitably, it has failed, and badly. The experience of the hon. Member for Ceredigion (Mr. Thomas) suggests that it has failed all over the country. It has left behind far more losers than winners.