Bill Midgley column

Nov 4 2003 By Bill Midgley, The Journal

Amidst the understandable anger about the loss of almost 1,000 jobs in our call centre industry in the North-East, one point seems to have been overlooked.

That is that businesses exist to make a profit, and that many will do that by outsourcing (to use the modern jargon) jobs or the provision of services to the cheapest source possible.

This is perhaps particularly common when decisions are made 280 miles from the North-East, where the impact of such lost jobs is neither felt nor acknowledged.

Call centres a few short years ago were seen as the new way forward for our region, although it has to be said that there were many who at that time had concerns that they were not a firm base on which to build a regional economy.

Neither should we lose sight of the reason why these jobs came to our region in particular. The Office of National Statistics has produced yet another sheaf of information indicating what we probably already knew in any event, in that the North-East continues to be at the bottom of the earnings ladder, with average earnings in the region of £393 per week.

If low wages and the availability of labour were the incentives for such new jobs in the past, then there is perhaps an inevitability that as other labour markets opened up around the world the jobs would move on.

The loss of jobs on this scale will be felt by the entire business community, and no-one should feel complacent.

That is 1,000 fewer salary earners in the region, less money into our regional economy, a reduced purchasing power, which will certainly cascade through the service industry over the coming months.

It may be that the establishment of call centres was seen as no more than a temporary expediency whilst the region developed a more sustainable economic policy. That would certainly be acceptable if there was any indication that such a policy was emerging.

Short-term creation of jobs satisfies the "tick the box" mentality, which keeps government departments and agencies happy.

The real solution to our regional economic problems will take half a generation to resolve and requires investment, the provision of skills and the entrepreneurial flair that the region used to demonstrate.

Much of that is down to education, not merely academic success, but on how we survive in an ever more competitive world market place.

That is a world that will fight fiercely for our jobs and our future.