UK not to oppose BPO: British minister
Syed Amin Jafri in Hyderabad | January 07, 2004 19:05 IST
British Minister of State for International Trade & Investment and Foreign and Commonwealth Affairs Mike O'Brien on Wednesday said that British companies have the freedom to decide where to locate their operations.
However, the British government shared the concerns of those immediately affected by plans to offshore services work.
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Speaking on 'Trade challenges for Britain and India in the changing world' at the Tenth Partnership Summit of Confederation of Indian Industry, he said: "The media talked about the jobs lost, but the media did say nothing about the number of jobs gained by companies choosing to locate in the United Kingdom."
"Britain as a whole benefits from globalisation and free trade," he remarked.
"We read about back office jobs being relocated to India by British banks and insurers, but not that over one million people are employed in the UK financial services sector and that in 2002 alone another 5,000 jobs in the sector were created by inward investors. We read about some call centres being moved abroad, but we have still have 5,500 call centres in the UK employing around 400,000 workers," he said.
"In Britain, the call centre industry is still growing. Many call centres will remain in Britain because we have quality workforce, a strong infrastructure, support for industry in Europe and central and local government."
"There is a cost in transferring jobs and because Britain has a strong and competitive economy. Indeed, we benefit from offshoring from the United States. And if any Indian business people want to invest in call centres in UK, you would be most welcome," he said.
"Our response to the global trend towards offshoring will not be one of protectionism. We have long held the view that you can not preach free and fair world trade and practice protectionism at home."
"Instead, we shall work to enable and encourage firms in the UK to invest in new technology, workforce skills and to move into advanced high value activities," he said.
He also voiced British's concerns about protectionism in India. "It is important that British service providers in these areas have as easy access to the Indian market as the BPO suppliers have to the British market."
"We look for further increases in the cap on equity investment by British insurers in India. We want an increase in the number of scheduled air services between our two countries, which would simply respond to the genuine demand on both sides," he explained.
The British minister termed as "very productive" the talks he had with Civil Aviation Minister Rajiv Pratap Rudy on Tuesday.
"We agreed to discuss in February the opening up of more routes between Indian and British airports. This is long overdue. Tourists and business people visiting both countries want direct flights," he pointed out.
"We also look for international law firms to be able to advise Indian companies in India on matters of English law and the law of other non-Indian jurisdictions. The Indian legal profession need not fear this. We are not looking to take their trade away from them. Our aim is to advise on mergers and acquisitions and wider aspects of English law," he said.
He also said that in the more traditional area of trade in goods, Britain looked forward to a significant reduction in punitive tariffs on premium goods such as scotch whisky.
"Trade and investment is a two-way street. You benefit and we benefit. But if you put up barriers -- take short-term protectionist stance, we both lose."
"If Britain puts up protectionist barriers on call centres, you lose, but we lose too: our companies will be less competitive and our economy will suffer in the long run," he explained and pointed out that the real route to open markets in goods and services would be the multilateral approach through the World Trade Organisation.
He said an increasingly developed India, with sophisticated companies exporting both products and services abroad, would find that its interests increasingly coincide with those of the developed world.
"India needs more opportunities to grow its economy and develop new markets. Far from fearing globalisation, India is well placed to benefit from the opportunities that it brings," he remarked