What business really wants is cheap workers

The CBI's argument is that Britain is less attractive to invest in than India because it is not poor enough
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The Independent Online

The Confederation of British Industry is, apparently, "deeply worried". A survey of 250 company directors, published to mark the start of the organisation's annual conference, has made this quite clear. Seven out of 10 directors questioned believed that Britain has become a worse country to invest in over the past five years while 60 per cent expected the trend to continue. Most of them expressed the view that the Government has become "less business friendly".

The Government still looks fairly business friendly though. Certainly, at least, it still believes in the personal touch. Yesterday Tony Blair and Patricia Hewitt turned up to address the massed ranks of decision-makers, while today Gordon Brown takes to the lectern.

Despite their eagerness to press the flesh, though, it is not proving to be an easy gig. The conference, so far, has focused on delivering not-so-veiled threats to our esteemed leaders, while listening not in the least to anything they had to say that didn't suit the CBI's programme of demands. Digby Jones, director general of the CBI, pulled no punches: "When top company decision-makers start giving the kind of signals contained in our survey, the Government must sit up, listen and take action. There is widespread concern about the UK's declining competitiveness and this is starting to feed through to investment decisions."

What Mr Jones really means is that no sensible capitalist will be creating any more jobs in Britain unless the Government gives him a jolly nice tax incentive to do it. Be nicer to us, Mr Jones, is saying, or we'll take all of our jobs abroad.

The trend towards moving as many jobs as possible to other, poorer, countries has recently been focused on the large-scale relocation of call centre services from Britain to India, but the survey showed a large number of other jobs had been switched abroad as well. This was mainly to cut costs but also because of a lack of skilled workers in the UK.

The unions, of course, are most upset about it. The Government, however, is more relaxed. Mrs Hewitt, particularly, is so friendly towards business that she went to great lengths to tell the CBI that moving call centres wholesale to India is exactly the right thing to do. Referring to calls from unions asking for government contracts not to be placed with such companies, she spoke of "siren voices". British business, she contended, should be proud of itself for investing in India, where half of the world's poor lives. "I know," she consoled the big guns, "that often it is much easier to see the short-term benefits of protectionism than it is to see the long-term costs to consumers".

She does have a point, though it's a fairly limited and self-serving one. India is an attractive business proposition precisely because it is poor. The CBI's argument, although it would never be couched in such terms, is that Britain is less attractive because it is not poor, and therefore exploitable, enough.

It may suit Mrs Hewitt to flatter British businesspeople as charitable visionaries, but it's doubtful that helping the poor in India is anything other than a convenient fig-leaf for most members of the CBI. Since call centre workers in India are often qualified to degree level, and find wages generous that in Britain would be considered small enough to be illegal, there is a suspicion that Britain's businesses are not moving their operations abroad for entirely ideological reasons.

On the contrary, the call centre controversy is a perfect illustration of the farcical double-bind that the global economy delivers. The same unions that are now demanding action be taken against companies that move their telephone services abroad are the ones which a few years ago were quietly horrified by the genesis of the centres in Britain.

In the mid-to-late Nineties, low wages, appalling conditions and high turnover of staff due to stress and anxiety were bothering industrial activists involved in the development of call centres. Now that conditions have been forced up, the jobs are evaporating, and suddenly call centre work is not a growing menace but a terrible loss. In India, of course, the low wages and appalling conditions have been magically transmogrified into high wages and prestigious conditions, and all at a fraction of the price.

Clearly, it's all relative in the global employment market. Of course, in an unequal world, one man's feast is another's famine. But what is sinister about the liberal globalist view - that opening markets will spread prosperity - is that this is not simply a matter of heaving everybody upwards. It is a matter also of heaving some people down. This is why the trend in globalisation is for countries to become wealthier as they expand their global markets, but for wealth disparity within the countries to become greater.

The appeal to businesses of staffing call centres from India is obvious. But business is not content with offering practical reasons for its decisions, let alone looking honestly at the less charming consequences of its actions. Why admit that you're thinking only of the bottom line, when the top guns of Government will turn up in person to be told that it is their mildly social democratic policies which are driving a desperate business sector to seek the largest profit possible.

British business, when explaining why it is moving so many jobs abroad, is keen to mutter about the "skills gap". But, as ever, British business is less keen when it comes to investing cash in addressing the self-same, much-cited skills gap. (Why should they, you may ask, when government ministers will praise them for simply upping sticks and employing Indian graduates as a response to perceived gaps in our own labour market?)

Defending the Government's ambition to have 50 per cent of school leavers go into higher education, Mr Blair explained: "It is projected that employers' demands for highly skilled workers is set to increase by two million in the next 10 years. Our goal should be more world-class institutions advancing both excellence and opportunity..."

This would seem like just the sort of expansion that British business leaders would be keen to support. But instead they secretly prefer the status quo, which is free higher education for their own children, and mutterings about the skills gap, when they choose to exploit the graduates of other countries by employing them in jobs and under conditions that they would rather die than let their own highly educated children undergo.

The message of the CBI conference, with its whingeing about regulation, taxation, and so on, being the driving concern behind its drift abroad is that Britain's businessmen want to be even richer, while those who work to generate their wealth, should be all the poorer. When even Labour ministers turn up to say that on the contrary, their strategies form part of a crusade against world poverty, we should be very worried indeed.

Globalisation may well spread wealth around the world. But if we are not very careful it will leave poverty in its wake. Those who are losing their jobs to Indian graduates are getting a taste of that now. And the Government is learning that no amount of support for the business community is ever enough for a socially progressive government. In his speech to the CBI, Mr Blair called for a "renewed partnership" with business. Which means cutting taxes and returning to Tory levels of investment in public services, and making Britain more like India.