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House of Commons

Thursday 22 January 2004

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Call Centres

1. Mr. Bill Wiggin (Leominster) (Con): What assessment she has made of the number of call centre jobs being exported to (a) eastern Europe and (b) Asia. [149731]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): I well understand people's concerns about the offshoring of UK service jobs, whether to eastern Europe or to Asia. To understand better what is happening and how we should respond, I have issued a consultation document on offshoring. I have also commissioned a competitiveness study of UK call centres, and I will host a round-table discussion next month with businesses, trade unions and others concerned about this issue.

Mr. Wiggin : I am grateful for the Secretary of State's answer, but it does not tell us whether she is worried enough about the export of call centre jobs. The Secretary of State for Wales is equally confused. He said that the loss of the jobs would contribute to our prosperity, but the following day he said that he would fight to save every call centre job. Will the right hon. Lady straighten out the right hon. Gentleman when he comes to answer business questions later this morning?

Ms Hewitt: It is the Conservative party that is in a complete muddle on this issue. Just four months ago, the then shadow trade spokesman said:

I am very clear that the loss of any jobs, including call centre jobs, is devastating for the workers concerned, and for their families. That is especially true for communities that were devastated years ago by the loss of manufacturing jobs. However, I am also clear that we can protect people in this country without resorting to the protectionism that the hon. Gentleman seems to want. We will go on growing call centre jobs and other good jobs in our country by competing on quality and skills, not on costs.

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Mr. Martin O'Neill (Ochil) (Lab): Does my right hon. Friend agree that there is concern about the loss of jobs that may need better qualifications than call centre jobs do? Such jobs include the back-office accounting functions that are being transferred out of this country. As a result, there has been a reduction in training for people in those important areas of business, and some companies use that as an excuse for not meeting their responsibilities to continue to train staff.

Ms Hewitt: A growing proportion of call centre jobs are done by people who are well trained, highly skilled and well paid. That is why we are determined to keep our call centre sector competitive. Some companies are undoubtedly moving more of their back-office operations abroad, especially to India, but other companies—both British companies and inward investor firms—are growing their call centre operations here. I have no doubt that those good jobs will continue to grow in the UK. If call centre jobs also grow in India, as they will, that is also good news. Labour Members, at least, want India to become more prosperous, for two reasons: first, that is right for people in India and, secondly, as India grows, it will spend even more on goods and services from this country than the £2.5 billion that it already spends every year.

Mr. James Arbuthnot (North-East Hampshire) (Con): Last month, the Secretary of State said that she looked forward to getting help from the Conservatives, instead of the usual whingeing about red tape. Also last month, however, the British Chambers of Commerce said that additional regulation on business since Labour came to power in 1997 had added £20 billion every year to UK plc's costs. Was the BCC whingeing? Does not the right hon. Lady see the connection between Labour's red tape and jobs leaving Britain?

Ms Hewitt: The hon. Gentleman seems completely ignorant of the fact that there are more people in work in the UK than ever before. Unemployment is falling in every region and nation of the UK. We will go on working—with the chambers of commerce and all the other business organisations—to simplify regulation. That is what we have been doing, which is why the new year survey of European business leaders by the German economic newspaper Handelsblatt ranked the UK as No. 1 for competitiveness. It is also why the review by the Organisation for Economic Co-operation and Development shows that we have almost the lowest administrative costs of any EU country, with fewer regulations for entrepreneurs.

All the surveys confirm that we are doing better than almost any industrialised country. Indeed, British Gas's most recent survey shows that small and medium-sized enterprises are spending less time dealing with red tape. In that respect as well as others, things are getting better than was the case under the Conservatives.

David Taylor (North-West Leicestershire) (Lab/Co-op): New technology creates jobs but newer technology can export those jobs to other firms, countries and continents. Does my right hon. Friend agree that there is every reason for optimism, given this country's tradition of entrepreneurial skills, adaptability and investment? As jobs disappear to other nations and

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continents, successor jobs will use even newer technology, which we are in a strong position to utilise and deploy.

Ms Hewitt: My hon. Friend is right. We will continue to grow good jobs in our country and employ our people by continuing to secure business, to develop better products and services and to move up the value-added chain. My hon. Friend is also right about India. Last year, more than 440 Indian companies invested in Britain, which helped to create jobs here. On the issue of quality, some of my hon. Friends know that Littlewoods recently announced that it is moving its call centre operation back from India to the UK in order to secure its required quality of customer service.

All my hon. Friends, especially those from the north-west, will welcome my publication this morning of the Competition Commission report on the completed acquisition by March UK of GUS's home shopping and home delivery businesses. The Competition Commission has cleared the merger, and I hope that that news reassures call centre workers all over our country.

Malcolm Bruce (Gordon) (LD): Will the Secretary of State acknowledge the concerns about how some companies are handling the outsourcing of jobs and about the lack of consultation with the work forces affected? Given the expansion of trade and investment between eastern Europe and especially India and the UK, does she agree that there are opportunities to reinvest the funds provided by that overseas investment in new technology, and especially in smaller businesses, which are increasing their productivity at a much higher rate than large businesses that are investing abroad? Will she do more to ensure that we train more computer technologists in this country so that we can add value to our computer industry and ensure that we secure the niche at the top end?

Ms Hewitt: I entirely agree with the hon. Gentleman about the need to continue to raise the level of skills in the IT sector as well as across the economy generally. That is why we are making difficult reforms that will allow us to put some £1 billion of additional funding into our universities to raise the quality of teaching for undergraduates. We are expanding modern apprenticeships, investing in basic skills and working hard with the e-skills training body to attract young women as well as young men—and older women and men for that matter—into that expanding sector.

Steel Industry

2. Helen Jackson (Sheffield, Hillsborough) (Lab): If she will make a statement on the future of the steel industry. [149732]

The Minister for Industry and the Regions (Jacqui Smith): Last Thursday, I chaired a steel workshop to discuss key issues affecting the sector and to consider what action may be taken to ensure its future. I am grateful to my hon. Friend, other hon. Members, the industry and trade unions for their contribution to the success of that event. It is clear that the steel industry faces major global challenges, but it is also clear that high technology and growing industries such as

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aerospace and construction require high-value steel products. Working together, we need to ensure that the UK steel industry can respond to the opportunities created by those new demands.

Helen Jackson : I thank my right hon. Friend for that answer, and the workshop was certainly useful. In south Yorkshire, we know that steel is the backbone of engineering and manufacturing as well as of high technology—it is a crucial industry. We know that the big players in the industry must make the shift from contracting to taking advantage of the new world markets through new investment, ideas and skills. What specific support and measures are the Government examining to help the big players make the crucial shift from contraction to future expansion?

Jacqui Smith: My hon. Friend has a good record on ensuring that both the steel industry in south Yorkshire and the Government are focused on practical initiatives to enable the industry to go forward. Support is already in place through the metals industry competitive enterprise scheme, which shares best practice among steel producers. It is important to ensure that the expertise in the National Metals Technology Centre is used to develop high-technology innovative processes, because that will lead to success. In partnership with Yorkshire Forward, we are discussing with my hon. Friend and other hon. Members what more we must do to ensure that key manufacturers in south Yorkshire can work together in the most effective way.

Michael Fabricant (Lichfield) (Con): Of course we need to specialise in the specialised manufacture of steel, but does the Secretary of State agree with the United States Government, who maintain that there is dumping of cheap steel from the far east, and if so, what practical steps is she taking, with the World Trade Organisation, to stop that practice?

Jacqui Smith: The hon. Gentleman makes an important point: what we can most effectively do for our steel manufacturers in terms of international competition is to ensure that we all operate on the basis of fair and free trade. That is why the UK, along with its partners and through the OECD, is working to ensure that we develop multilateral agreements that will reduce trade distortions and provide the fair opportunities that our steel manufacturers deserve.

Alan Howarth (Newport, East) (Lab): Does my right hon. Friend agree that the present trading range of sterling, enabling the UK steel industry to buy in dollar-denominated raw materials advantageously and to export to the eurozone highly competitively, provides a remarkable opportunity for the industry to recover market share at home and abroad? Will she encourage the industry to seize that opportunity, and will she tell the House yet more about the Government's practical plans for working with the UK steel industry to enable it to achieve that end?

Jacqui Smith: My right hon. Friend makes an important point about the current international opportunities for steel manufacturers. I have already outlined some opportunities in respect of the growing

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demand in the UK; for example, Government spending on construction is providing an important opportunity for our UK steel manufacturers. An important outcome of the steel workshop held last Thursday is the strong possibility of our being able to work with representatives from the industry, for example, to consider developing an innovation and growth team, as we have for other key sectors. With the industry, we can identify key factors for innovation and opportunity that will enable the sector to grow. My officials working with the industry are currently looking into how we can take that work forward so that we develop the type of practical initiative for which my right hon. Friend calls.

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