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24 Oct 2006 : Column 354WH—continued

The hon. Gentleman touched on the effect on the economy. I am concerned about the effects on women, because call centres can offer flexible and part-time
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work. However, there have also been repercussions for their male counterparts, who tend to predominate in backroom business processing. I was also interested to discover that the Department for Trade and Industry has estimated that 200,000 extra jobs will be created in call centres in the next three years, which is somewhat contradictory to the doom and gloom that we have heard about. I shall be interested to hear from the Minister how that will translate in the United Kingdom’s economy.

Mark Williams (Ceredigion) (LD): My hon. Friend knows about the importance of the sector to us in Wales, with 30,000 jobs based in the south-east corner of the country. Does my hon. Friend agree that with the inevitable growth of offshoring, a far more robust regulatory regime is needed? The hon. Member for Norwich, North (Dr. Gibson) agrees, and so do I. My hon. Friend has read the same reports as I have about illegal buying and selling of personal information in India. Does she agree that the fundamental point for consumers is local knowledge and information? When one represents a constituency such as mine, which includes towns with colourful names such as Pontrhydfendigaid and Aberystwyth, and which adjoins constituencies with towns such as Machynlleth, local knowledge that responds to customer need is important.

Mr. Bill Olner (in the Chair): Order. We must return to the speech.

Lorely Burt: I am grateful to my hon. Friend the Member for Ceredigion (Mark Williams) for his informed intervention. The points that he makes are right.

Customer satisfaction and local knowledge are important. Returning to the Norwich Union example, the research that the company undertook before outsourcing its jobs discovered that 51 per cent. of respondents were appalled at the prospect of outsourcing call centres abroad. However, it does not seem to have had any effect on the company’s final decision.

I am particularly concerned about disadvantaged individuals such as people from poorer backgrounds and those, like myself, who suffer from blood pressure problems. I am sorry to say that with call centres in the United Kingdom, including, I am sorry to say sometimes Government call centres, blood pressure can be a real problem. One must be emotionally calm and well psyched up before calling, so that one does not end up—in my case—cross, tearful or both by the end of the call, as a result of frustration at being unable to obtain the information that one needs, or even to get through to the individual whom one needs to speak to, in a reasonable amount of time.

The quality of the information that is given has also been called into question. Call centres are not regulated for their quality of financial advice, as banks are. In The Guardian on 18 October, there was an article about misleading advice given by a call centre on individual voluntary arrangements. The individuals who gave the
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advice stood to benefit from giving that advice. Obviously, the quality of the advice given must be monitored scrupulously.

Telemarketing is a £4 billion industry in the United Kingdom. There is a big challenge for telemarketing companies, because 13 million people are registered with the telephone preference service. If the hon. Gentleman wishes to see me afterwards I shall give him the details of how he can register, but I suspect that he is interested to find out what unsolicited calls he will get. Will the Minister comment on the idea that seems to be gaining ground in the field of telemarketing that, rather than people having to opt out of receiving cold calls, the Government should consider introducing legislation whereby people have to opt in? That would be beneficial for the telemarketing companies, which are fishing in a smaller and smaller pool. If they were fishing in a pool that wanted to be fished, that might benefit both the blood pressure of residents who do not want to receive cold calls and the marketing companies, who would be fishing more productively.

It would not be right for me to finish without mentioning silent calls, which were the subject of a Westminster Hall debate in March. The Government target of 3 per cent. for abandoned calls is welcome, as are the requirements that before a call is ended there must be a recorded message and that the number must be accessible on 1471. The fine has been increased from £5,000 to £50,000 but—it is a very big “but”—regulation will not work unless it is enforced. I am sorry to say that, following the criticisms levelled at Ofcom about the enforcement of rules on silent calls and other such matters, there is little evidence that the situation has improved. I hope that the Minister will be able to reassure me by giving examples of cases in which Ofcom has prosecuted somebody for the iniquitous practices that cause so much distress to local people.

10.3 am

Charles Hendry (Wealden) (Con): I start by congratulating the hon. Member for Norwich, North (Dr. Gibson) on securing this debate and on introducing it in his customary style, which is always a delight to listen to. I doubt that any other Member of the House could bring Amicus, Norwich City football club and Chomsky into a debate on call centres. He always enlivens, entertains and educates us, and I pay tribute to him for raising issues on which every hon. Member and their constituents would agree. None of us have had letters from constituents saying how well call centres work and what a wonderful service they get from them. We get a considerable amount of correspondence, including e-mails, about their failings and the need for them to improve.

As the hon. Gentleman explained, the background to this debate is the decision of Norwich Union to outsource a significant amount of its call centre activity, reducing its work force in that field by some 11 per cent. I understand that it is not happening only in Norwich, although 850 of the 4,000 jobs will be lost there. There will also be reductions in York, Glasgow, Sheffield, Cambridge, Perth, Newcastle, Eastleigh, Stevenage, Bristol, Worthing, Belfast and Birmingham. The list sounds rather like a cross-country train journey with Virgin Trains. A massive number of centres will be affected.

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We understand why Norwich Union felt it necessary to make such changes. I shall come on to issues of good practice shortly, but we recognise the competitiveness of the world in which Norwich Union operates and understand why such decisions have to be made. They are not easy, but for the future viability and vitality of a company, the decision to move offshore must sometimes be made. Norwich Union’s follows similar decisions taken by companies such as Royal & SunAlliance, which announced in June that it would cut 1,500 jobs in its call centres by 2008.

We should consider such announcements against the background of the call centre industry in this country, which has been a significant success story. It contributed £17 billion to the UK economy last year, so it is an extremely large and important contributor to our national wealth. Astonishingly, it is predicted that by 2007, more than 1 million people—4 per cent. of the UK working population—will be employed in call centres. It is important for the industry to realise that we recognise the important contribution that it can make. The Secretary of State for Health, when she was Secretary of State for Trade and Industry, said that we had a “vibrant call centre industry” and that the Government were keen to encourage it.

Much of the debate on outsourcing focuses on India, but we should not lose sight of the fact that it is a global industry. Call centre expertise is being developed in the Czech Republic, Poland, Romania, South Africa and elsewhere. When considering India, we often tend to think that people outsource activity there only because they believe it will be cheaper. If one speaks to the Indian companies involved, one finds out that they do not see that as being their remit at all. They want to be involved in a high-value industry that attracts graduates and highly qualified people, often in working conditions that are much better than can be found in other parts of India. My right hon. Friend the Leader of the Opposition, when he was in India recently, spoke to someone who heads up a major call centre about his global plans. He was told, “Yes, we are investing globally. Our next planned location is in Northern Ireland.” Indian call centre companies are therefore investing back into the United Kingdom. We must not let the debate centre around the idea that outsourcing is just a matter of cheap labour. Companies would lose their customers if they were not able to provide a good-quality service.

There are undoubted problems with the way in which the industry operates in the United Kingdom. It is estimated that call centres in the private sector are working at between 10 per cent. and 35 per cent. below optimum efficiency. Some 55 per cent. of companies operating call centres have reported difficulty in recruiting the right staff, which leads to a high level of staff turnover. It is estimated that 85 per cent. of direct corporate customer communication is via the phone. Most people employed in call centres are between the ages of 18 and 25 and we all recognise, perhaps from our own children, that those are not the people best able to communicate with adults on the telephone. My children will take me to task on that, but a wider range of ages needs to be represented.

The problems are worse in public sector call centres, which are estimated to be under-performing by 50 per cent. In 2005, the Department for Work and Pensions
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announced that there had been 13 million abandoned calls in its call centres. The industry association, the Customer Contact Association, carried out an assignment for the General Social Care Council in 2005 and was able to increase productivity by a staggering 1,500 per cent.—that is fifteenfold—in just 30 days. An assessment of the Royal Mail Group’s contact centres in 2004 indicated an opportunity to save £27 million, out of a total spend of £88 million. As Members of Parliament, we consistently come across Government call centres, be they for tax credits or the Child Support Agency, that are simply not working as well as they should. It is easy to see that there has been under-investment in employees and employee relations, and that the service delivered is not as good as it should be.

There are also other concerns. Too often people find that the location of the call centre is concealed. I received a phone call a few weekends ago. I asked the person where they were calling from and they said, “We’re calling out of Watford.” I said, “That sounds rather strange. Where do you mean? Are you in Watford or just outside it?” He replied, “No, we’re in India”, which I thought took the description ‘out of Watford’ a little further than one would have wished. Perhaps there is a Watford near Delhi, although I have not come across it yet.

When I tried to follow the call up and find out how the company had got my details, I was put through to a number that was unobtainable. I dialled 1471, got through to a recorded message and left a message two or three times, but I have never received a call back about where the company got my details. What people find unacceptable is such deception—that is a fair enough word to use—and people pretending that they are calling from somewhere relatively nearby when they are half way round the globe.

More has to be done to address working conditions. Call centres are sometimes described as the coal mines of the 21st century. If they are to be part of a truly vital industry, we must ensure that working conditions are the best that they can be. Staff turnover across the industry is approximately 30 per cent., which leads to huge training costs and problems keeping people motivated. Paying more attention to the working and employment conditions might help to address those issues. We also hear concerns about staff being required to meet impossible targets, with little time for comfort breaks or any break away from the telephone. There are also health and safety concerns. The time spent working on calls and at computers should be limited to 60 per cent. of a day, although 90 per cent. targets are not uncommon in the sector.

The hon. Members for Norwich, North and for Solihull (Lorely Burt) both raised the issue of silent calls, which we must without doubt do more to address. The hon. Lady referred to a debate from earlier this year. Indeed, a statutory instrument was introduced towards the end last year that addressed some of the issues relating to silent calls. It is extremely disappointing that, despite the issues that were raised then, the commitments that were given by the then Minister, the right hon. Member for Cardiff, South and Penarth (Alun Michael), have simply not been implemented. He said that any abandoned calls must
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carry a recorded message that identifies the source of the call. My understanding is that Ofcom is no longer rigorous in requiring that.

We all asked in that debate what the purpose was of increasing the threshold of the fines by so much if no one had ever been fined at the lower level. We were told that the higher fine was needed to make the legal actions and the work involved worth while. It is now many months since that higher fine was implemented, but as far as I am aware Ofcom has still taken no action against a single person making silent calls.

People feel extremely uneasy when they receive a silent call, particularly older people and women. Silent calls make them anxious, and it is little wonder that, as the hon. Member for Solihull said, some 12 million to 13 million people have registered their numbers with the telephone preference service to ensure that they do not receive unwanted phone calls. However, there are powers available, and we would like to hear from the Minister how the Government can ensure that they use them effectively.

Call centres are a substantial industry, with the potential to become even greater. Call centres are evolving into contact centres, which also provide a range of back-office services, so that more information and support can be given in the course of a call. It is quite possible that the number of call centres in this country will increase by about a half over the next few years. However, if that is to happen, there must be more investment in staff, so that they are better qualified, and working conditions must be improved. Measures must be put in place to reduce the high staff turnover. We must also recognise that without that investment we will not see the high quality of service that we want.

There are two aspects to the issue, one of which is good practice. The hon. Member for Norwich, North referred to the fact that the trade union was not advised of the redundancies until the day they were announced, which is an example of bad practice. There is good practice, which can be implemented through the industry itself, but there are also aspects that need to be addressed through regulation. I have already mentioned silent calls and integrity, whereby people are honest about where they are calling from, but callers should also be clear about where people’s details have been obtained. Invariably, if one asks, “Well where did you get this number from?”, the caller will say, “It’s publicly available”, even if one knows jolly well that it is not a listed telephone number and so is not publicly available. Callers will never say where they get people’s details from. It would be quite appropriate for regulation to be put in place, so that the person receiving the call has an absolute right to know where their information has been passed on from, which would be entirely in keeping with data protection legislation.

Regulation may also be required on the cost of calls. Many of us have no idea whether we are being charged when making a call to a call centre or what the charge rate should be. Call centres should be up front about charges the moment callers are connected, perhaps
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saying, “This call is going to cost a certain amount of money a minute,” so that people are in no doubt how much they are paying.

Finally, I hope that the Minister will be able to deal with some of the international scams. He may have caught a report on the “Today” programme this morning about a call centre operating in Holland that rang people up and encouraged them to buy dubious stocks that were a bad investment or stocks that did not exist. A number of people, particularly older people, have fallen for the operation, but because it operated from Holland it has been extremely difficult for action to be taken against it. We want to know that the Government are taking action on an international scale, as the industry is international.

Above all, however, some of the issues can be addressed by the industry itself. At the end of the day, call centres must recognise what their customers want. Customers will go along with call centres abroad, as long as the calls are handled in a way that is polite and courteous, meets their needs and does not harass them. The industry has huge potential, but it needs to improve its act if it is to achieve that potential.

10.17 am

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): It is a pleasure to see you in the Chair, Mr. Olner, and I congratulate my hon. Friend the Member for Norwich, North (Dr. Gibson) on securing this opportunity to debate the important matter of call centres. I would normally also thank him for the opportunity to address the Chamber, but he has delayed my return to five-a-side football by at least another week after my recent operation, as he said, so I am not very appreciative this morning. However, the issue is important and I am grateful to be here. I am also grateful for the contributions by the hon. Members for Solihull (Lorely Burt) and for Wealden (Charles Hendry).

In the past decade, call centres have become part of daily life, whether we want to pay a bill, make a service appointment or contact the bank. We come across them in a variety of different roles, from direct selling to customer relationship management, and they are used by nearly all commercial and industrial sectors, and by the public sector, to reach their customers.

There are more than 5,000 call centres in the UK, employing nearly 800,000 people. Many of those jobs have been created in areas of high unemployment. According to a recent Office for National Statistics study, in the three years between 2001 and 2004, employment in IT and call centres grew twice as rapidly as overall UK employment. This country’s open and competitive markets, our flexible labour laws, our relatively low costs, our advanced telecommunications infrastructure, and our business and management expertise have encouraged that success. In fact, the UK is the leading location for call centres in Europe.

I appreciate that from time to time callers to a centre experience poor customer service. People who experience a lack of service are quite rightly vocal—I dare say much more so than those who are satisfied with the service—when they make criticisms, but that is human nature, given the point that the hon. Member for Wealden made.

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Bob Spink (Castle Point) (Con): I apologise for arriving late—I was detained on my way here. Does the Minister agree that call centres could and should improve their reputation and acceptability, and that one way of doing so would be for the Government and the industry to encourage more people to sign up to the telephone preference service? That would cut down the number of unsolicited sales calls, which are particularly annoying, thereby boosting customer confidence in such an important sector of our economy.

Jim Fitzpatrick: The hon. Gentleman raises a similar point to that made by the hon. Member for Solihull, who suggested that the polarity should be reversed and that people should volunteer to be called, rather than excluding themselves. I shall come to that later, but there is a method through which people can exclude themselves from being called. The hon. Lady’s analogy of people volunteering to be fished from a pool sounded a bit like turkeys voting for Christmas; I am not sure that anybody is likely to go down that road. Nevertheless, she made a valid point to which I shall return shortly.

Responsible companies recognise the valuable part that their call centres play in growing business and delivering customer satisfaction. Organisations such as the Customer Contact Association are playing their part; it has set its membership ever-higher standards of skills training and quality customer care. The association is piloting for the industry a voluntary kite mark that will assist in raising standards.

As has been mentioned by my hon. Friend the Member for Norwich, North and other contributors, call centres have been criticised for the proliferation of unsolicited direct marketing telephone calls. I can certainly appreciate the nuisance and inconvenience that such calls cause. They are usually made through a computerised calling device that dials the telephone number and automatically connects to a sales agent or provides a recorded message when the call is answered. Although the machines allegedly give efficiency savings to the company, they can be very irritating to those who receive calls—especially when there is no message, as my hon. Friend said.

The Government listened to complaints and took action accordingly. Under the Privacy and Electronic Communications Regulations 2003, no one is allowed to make an unsolicited direct marketing call to a subscriber who has previously notified them that they do not wish to receive such calls or to someone who has been registered with the telephone preference service for at least 28 days. The telephone preference service is an industry-run opt-out scheme, operated by the Direct Marketing Association.

Responsibility for the enforcement of the regulations rests with the Information Commissioner’s office and is drawn from the Data Protection Act 1998. Breaching an enforcement notice is a criminal offence subject to a substantial fine—recently raised from £5,000 to £50,000—in a magistrates court. I have heard the criticism, made by the hon. Member for Wealden, of silent calls. I shall look into his point about Ofcom’s role in monitoring and enforcing the regulations.

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