10-12-03

Barrett calls for action on jobs outsourcing

John Barrett, Liberal Democrat MP for Edinburgh West, today told the Government to do more to stem the flow of financial services jobs abroad.

Mr Barrett's debate in Westminster Hall today, entitled "Outsourcing of Financial Services Jobs Abroad" follows the decisions of three financial giants; HSBC, Lloyds TSB and Aviva (Norwich Union) to outsource a combined 7,000 from the UK to India, including job losses in Edinburgh. 

The announcements form part of a trend, which has seen 28% of firms outsourcing more than 50,000 jobs to India over the last two years.  Industry consultant, Troika has warned that 100,000 jobs in the service sector could be moved abroad in the next five years.

In a statement, John Barrett MP said:

"Many of us have raised concerns for some time about the fall in manufacturing in Scotland.  After all, over 16,000 manufacturing jobs have been lost north of the border in the last 12 months alone. 

"In response, the Government has repeatedly told people like me not to worry because of the boom in the services sector, especially the growth in call centres.  However, if we are now seeing a trend in these jobs being moved from Scotland and other parts of the UK to the Asian sub-continent then we could be facing a jobs crisis in just a few years time.

"In many cases, pay costs in India are 40% less than the UK.  We simply cannot compete with these low wages and nor should be try to.  What we can do is learn from the other companies like Standard Life and the Bank of Scotland who have made conscious decisions not to outsource jobs.  We need to work out how and why we lost out competitive advantage and how it can be regained.

"The decision by the Secretary of State for Trade and Industry to set up a study into outsourcing shows the Government is convinced of the problem.  They must make solving it a priority in the New Year."

ENDS

Notes to Editors

1. The UK call centre industry as a whole employs over 790,000 people in over 5,000 call centres. 

2. Almost 4% of the working population in Scotland, approximately 100,000 people work in this sector.

3. The list of companies which have outsourced jobs or who are on the record as considering the option are:

HSBC
Lloyds TSB
Aviva
Powergen
British Airways
British Telecom
Vertex
Thomas Cook
Prudential
Citigroup
JP Morgan
Scottish Widows
National Rail Enquiries
Tesco
Abbey National
Barclays
BskyB
Royal Sun Alliance
Churchill Insurance