Minister challenges 'myths' on outsourcing

Trade and Industry Secretary Patricia Hewitt has launched a study into the global challenges facing the UK call centre industry and has challenged what she describes as the 'myths' relating to concerns about outsourcing.

Visiting a Royal Bank of Scotland call centre in Bristol, Ms Hewitt announced a new study into the UK call centre industry to assess its ability to respond to opportunities and challenges of the global market for call centre products and services.

Ms Hewitt invited business, unions and interested parties to contribute to the wider debate about off-shoring, and announced that she will be chairing a round-table seminar on off-shoring in the New Year.

Ms Hewitt also published a DTI paper on the broader UK service sector which states that overall the UK is benefiting from the opportunities offered by the global market in services.

Myths

Speaking on a visit to Bristol and Wales, Ms Hewitt challenged the 'myths' surrounding the current debate on call-centre jobs.

She said: "The fact is our service sector is thriving. We lead the world in financial services, accountancy, consultancy and business services. Our service sector now accounts for almost 21 million jobs and 70 per cent of our economy.

"But it is against this background that the decisions of a number of firms to move their back office and call centre operations off-shore has been painful.

"While any job loss is tough for the individual and communities affected, we must challenge the myth that our call centre sector is in terminal decline.

"The headlines announce thousands of jobs going to India and the Far East, but the truth is that call centres in this country are still a thriving industry. We need more data on the call centre industry. But many organisations - including the Call Centre Association - expect business to grow.

"Firms are still choosing the UK as an attractive place to do business. In the past few months alone Carphone Warehouse has announced a new call centre in Warrington, as has '3' mobile in Glasgow. BT, who recently opened two new call centres in India, is also investing in 31 UK call centres.

"Across the economy, average wages in services are higher than manufacturing. Call centres are also vital to the success of many different sectors - from banking and insurance to manufacturing and telecoms - providing a vital link with customers, raising focus, informing strategy, adding value."

Protectionism

Patricia Hewitt said: "We also challenge the myth that protectionism offers any sort of solution. We can't argue liberalisation abroad and practice protectionism at home.

"However strong the short-term case for protectionism appears to be, the long-term costs are greater - for consumers and for jobs.

"In any case, we shouldn't fear trade. It's wrong to assume a job moved abroad means another worker on the dole here.

"When the EU grew to include poorer countries like Ireland, Spain, Greece and Portugal, they've grown and, as they've grown, so have we. And so have our exports to them - generating jobs and pension fund profits here - and so has their investment back into Britain.

"We already export goods and services worth £2.5 billion a year to India alone. As India grows, so will this trade.

"In particular we should be proud of the services we have to offer. We are the best in the world on financial services, accountancy and business advice and that's why we export £15 billion more in services than we import.

"And we challenge the myth that we are powerless in the face of this global restructuring.

"Our response to such competition is three-fold. First, we have to keep raising our game, in call centres and every other part of the economy - ensuring that companies and their staff are continually upgrading their skills and technologies so that we keep employment here. We cannot compete on low wages and nor should we try to.

"Second, where call centre jobs are lost, we must do everything we can to help people find new jobs and, if necessary, new skills as quickly as possible, calling on the services of Job Centre Plus, and the rapid response teams that together have already got almost 40,000 people back into work in the North East since April.

"Third, we have to do even more to build strong, sustainable economies in Scotland, the North East, North West and Yorkshire and the Humber - the areas where call centres are most important.

"That's the challenge to the devolved administrations and the Regional Development Agencies, backed by national Government - to raise the business birth-rates, develop the skills that the regional economy needs, to attract more inward investors and improve the local infrastructure. In other words, to create a virtuous circle of better skills, better jobs and better, more profitable businesses."

Independent research

The DTI is commissioning independent research on competitiveness factors in the UK call and contact centre sector industry. The study will identify the key factors contributing to relative competitiveness in the UK call centre sector and the industry's capability to respond to the increasingly global market for call centre products and services. The study will begin in January with its initial findings reported by end of March.

The DTI report 'Services and off-shoring: The impact of increasing international competition in services' can be downloaded.