UK House to probe job losses to India
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UK House to probe job losses to India

By SiliconIndia   |   Tuesday, 19 August 2003, 07:00 Hrs
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Members of Parliament are to conduct a high-level inquiry into the reasons why thousands of British jobs in the IT sector are being relocated to countries such as India.



LONDON: According to Martin O'Neill, chairman of the Commons Trade and Industry Select Committee, the inquiry would be part of a wider probe 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 plans to create 2,200 new call centre posts in India, while Aviva, the insurance company, plans a 1,000-person call centre and claims processing unit in India.

O'Neill told The Independent that he planned to quiz BT, the telecom giant, over the loss of call centre jobs at a hearing later this year.

"We will be raising the issue of the removal of British jobs to call centres in places like India," he said.

Several unions have protested decisions by some of Britain's best-known companies to move jobs abroad. The unions claim that 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 two million mainly administrative and technology-related jobs by 2008.

There are growing fears the jobs exodus will undermine Britain'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.

But advocates of outsourcing believe it creates wealth for both countries involved.

The Independent reported that at a recent conference Satyabrata Pal, India's deputy high commissioner, said British companies saved money while Indian companies invested in Britain.

There are 75 Indian software houses operating in Britain with 500 million pounds worth of exports every year.

Meanwhile, a leading economist has warned that the IT sector in Wales needs to be constantly upgraded to prevent more jobs from being relocated to India.

Brian Morgan, director of the Small Firms Research Unit at Cardiff Business School, said the only way to do away with the advantage of India's low-cost alternative was to regularly increase the focus on offering callers the best in-depth information, from state-of-the-art facilities.

Morgan said: "Like a lot of our industries, the call centre sector is facing a growing threat from overseas. Very simply, the job can be done much more cheaply in India, where people are prepared to work 12-hour days for a fraction of the wages.

"The only way to counter this threat is for our call centres to move to the high value end of the market, to constantly up-skill and upgrade their workforces."

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