Britain's thriving new export trade: jobs to Asia

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The Independent Online

The TUC urged the Government to set up a commission to investigate the outsourcing of work to Asia yesterday, as rail service authorities admitted they have already moved some operations to India.

At the end of a week that has seen thousands of bank jobs moving to Asia, it emerged that rail passenger inquiries about train times are already being answered in Bangalore.

Operators of that service initially said they were only evaluating bids from other countries to provide such services. But they have now revealed that questions about the best way to get from Gravesend in Kent to Llanelli in south Wales are being handled in India.

The disclosure came in a statement from the Association of Train Operating Companies, e-mailed late yesterday, which said that existing suppliers had already contracted out part of the much-criticised National Rail Inquiries to the sub-continent.

Roger Lyons, president of the TUC, said: "We do not want to be Luddites and where it is cheaper for companies to get the equivalent level of work, there is no point in contesting it. But we have asked for a commission to be established to look at ways for people in Britain to be up-skilled and can do more complex jobs."

Britain's main unions also reacted furiously yesterday to news that HSBC, Britain's largest bank, planned to outsource 4,000 jobs from the UK to India, Malaysia and China within the next two and a half years. While HSBC said it would do its best to keep compulsory redundancies to an "absolute minimum", it admitted that some enforced cuts would be inevitable.

The financial union Unifi said it was "very, very angry" at the prospect of compulsory redundancies. It was also "furious" at the scale and pace of HSBC's cost-cutting move, which will see 1,500 jobs go next year, a further 2,000 in 2005 and a further 500 in 2006. HSBC will close its call centres in Sheffield, Birmingham, Swansea and Brentwood in Essex.

The move, the single largest removal of jobs to Asia by a British company, is part of a growing trend among employers, who are attracted to the developing world because of the low salaries and high level of education in countries such as India and China.

BT drew protests last month over its plans to switch its directory inquiries service to India, as did the insurer Prudential last year. After wrangling with unions, Prudential agreed to avoid compulsory redundancies as part of its plan. An HSBC spokesman said: "We are an international business and have a responsibility to manage ourselves internationally. There are completely different cost ratios overseas and if we did not take advantage of that we would not be being responsible to our shareholders."

Mr Lyons countered: "This is not a one-way street where companies can simply make lots of profits. We have carried out an independent survey and it showed 63 per cent of consumers would take into account whether a company has outsourced jobs in ... banking and mortgage advice in deciding whether to use it."

Estimates vary about how many British IT and call-centre jobs could end up in places such as Hyderabad in India. Some consultants have estimated that 200,000 will go from Britain, compared with more than two million from the United States, which has been moving IT and call-centre jobs to places such as Brazil. It is not just in the banking and IT industries that moves have been made offshore. Earlier this year, Waterford Wedgwood decided to close two factories and move production from Stoke-on-Trent to Asia.

The National Outsourcing Association, which advises companies that want to move abroad, argues the trend is not bad for British workers. "The saving for companies is in the region of 40 per cent for a company and it makes sense to have strong companies because it safeguards jobs in other areas of the business and also protects other companies that might have a relationship with that company," said Nigel Roxburgh, director of the association. Companies and business bodies argue that lower costs mean more profits, which Gordon Brown can use to boost the Exchequer's coffers.

A spokesperson for the Department of Trade and Industry said outsourcing was a purely commercial decision.