British firms are divided on whether Indian call centres cut their costs

TUC president Roger Lyons said several UK firms had looked into "offshoring" before opting to stay in the UK.

This was despite recent moves by the Abbey bank, insurance giant Norwich Union and the rail inquiry service to relocate call centres to India.

Mr Lyons said: "The business case for offshoring has not been made."

Mr Lyons, who is also general secretary of the Amicus union, was due to make his point at a conference in London on Tuesday.

Hidden costs

He is expected to name Legal & General, the Alliance and Leicester and the Co-op as three of the British companies that decided it made business sense not to move parts of their operations abroad.

Every decision we make must be based on the best interest of both the UK and Indian economies TUC president Roger Lyons

He will also point to union and academic research, which he says highlights the hidden business costs caused by problems such as high staff turnover and power problems in overseas call centres.

Mr Lyons said: "Companies that offshore in pursuit of immediate cost savings without thought to how the economy will look in 10 years time are threatening their own ability to trade successfully.

"Companies are already offshoring from India to China in a race to the bottom.