MPs intervene in call centre jobs exodus

Commons to investigate loss of employment to Asian rivals amid wider disappointment with IT industry

MPs are to launch a wide-ranging inquiry into the loss of thousands of call centre and IT jobs from the UK to countries such as India.

Martin O'Neill, chairman of the Commons Trade and Industry Select Committee, said it would be part of a wider inquiry into the failure of the IT revolution to deliver the expected jobs miracle.

By the end of this year, HSBC plans to employ 8,000 people in India, China and Malaysia, BT is planning to create 2,200 new call centre posts in India and Aviva, the insurance company, plans a 1,000-person call centre and claims-processing unit in India.

Mr O'Neill told The Independent he planned to quiz BT, the telecoms giant, over the loss of call centre jobs at a hearing later this year. "We will be raising the issue of the removal of UK jobs to call centres to places like India," he said.

The move will delight unions who have launched protests against decisions by some of Britain's best-known companies to move jobs abroad. The unions claims British workers lose their jobs while countries such as India get a reputation as nations of wage slaves.

After BT announced its plans the Communication Workers Union paraded a giant inflatable pink elephant outside its headquarters in protests at the "jobs stampede".

Ed Sweeney, general secretary of Unifi, which represents 160,000 workers, said there was strong support from MPs for an inquiry into the loss of jobs overseas. "Unifi has taken a delegation to the House of Commons to brief MPs on the emerging threat to jobs and received a strongly sympathetic reception," he said.

Research last month by the analysts Key Note predicted 100,000 of the existing 600,000 call centre jobs would disappear between now and the end of 2008. And research by the consultants Deloitte & Touche claimed India would be the main beneficiary of an expected outsourcing of 2 million mainly administrative and technology-related jobs by 2008.

There are growing fears the jobs exodus will undermine the UK's call centre industry, which has played a key role in boosting employment to record levels. Some critics fear that if the process goes too far then a major source of revenue for the Treasury could dry up as jobs, skills and profits go overseas.

Mr O'Neill said his committee would investigate wider concerns over the failure of the late-1990s boom in IT to create as many jobs as had been touted. "Later in the year we will assess the impact of the IT revolution and see whether the IT promise has been delivered," he said. "I want to talk to the relevant parties and to raise with Government why after the bubble burst that some of the expectations it raised have not been realised."

Companies are tempted by a combination of lower wages and higher qualifications of call centre workers in countries such as India. Pay rates are about £5.10 an hour in Britain compared with £1.25 in India, where most employees are graduates.

But advocates of outsourcing believe it creates wealth for both countries involved and accuses opponents of being Luddites.

At a recent conference Satyabrata Pal, India's deputy high commissioner, said British companies saved money while Indian companies invested in the UK. here are 75 Indian software houses operating in the UK with £500m worth of exports every year.

Referring to the elephant protest, he said: "They have got the wrong end of the stick and the wrong colour - it would have been better displayed as a white elephant."

Saurabh Srivastava, co-founder of India's National Association of Software and Service Companies (Nasscom), said it was a "myth" that the UK suffered a net jobs loss. "UK economy continues to rise especially in business and finance and the skills shortage will continue," he said.