Indian call centres are replacing many UK jobs

But they have rejected the DTI's contention that it is a "myth" to say the sector is in terminal decline.

DTI boss Patricia Hewitt said the UK call centre industry was "thriving" but unions said so-called off-shoring was a "blight" on it that needed addressing.

Earlier this week Norwich Union became the latest firm to cut thousands of UK jobs and export the work to India.

Ms Hewitt on Friday visited a Bristol call centre to see the issues at first hand.

She said the DTI study was aimed at ensuring UK call centres could compete effectively with overseas-based operations.

Crux

Unions have warned that the trend to shift UK call centre jobs abroad will continue.

And the Amicus union argued that the "off-shoring blight" also affected thousands of IT, back office and administrative jobs, as well as call centres.

"We hope this study will get to the crux of the problem without just rubberstamping what the prime minister and other senior cabinet members have been saying that the problem is just a fact of life that we have just got to live with," said Dave Fleming, Amicus national secretary.

Ms Hewitt wants businesses and unions to join in a debate about off-shoring and plans to chair a special seminar in the new year.

"The fact is our service sector is thriving. We lead the world in financial services, accountancy, consultancy and business services," she said.

"Raise our game"

But Ms Hewitt admitted that the decisions of a number of firms to shift their call centre operations abroad had been "painful".

The minister argued firms were setting up new call centres in the UK and were still choosing this country as an attractive place to do business.

She pointed out that the UK already exports goods and services worth �2.5bn a year to India and that as that country's economy grows, trade benefits to Britain will follow.

The UK's response to the threat of competition from abroad should be to "raise our game", Ms Hewitt said, and make sure staff are trained to improve their skills.

Operating costs

Earlier this week the insurance firm Norwich Union told staff it would cut 2,350 jobs in the UK and export the work to India.

Parent firm Aviva said operating costs in India were typically 30-40% lower than in the UK and that the move would also help it provide 24-hour services.

Other recent announcements included proposals by the national rail enquiry service to move 600 jobs to India.