CABINET Minister Peter Hain has claimed Norwich Union shifting jobs to India will be good for the British economy.

York MP Hugh Bayley raised the decision by Aviva, Norwich Union's parent company, to export 2,350 posts overseas, in a House of Commons debate yesterday.

Norwich Union bosses have said it is unlikely that staff in York, where 3,000 are employed, will see their jobs exported to India, though they have given no guarantees.

Mr Bayley called for a Westminster debate on the impact of the "globalisation" of the telecoms industry and how the threat to British jobs can be minimised.

Mr Hain agreed there should be a debate. One is now scheduled for next week,with Mr Bayley planning to attend.

But Mr Hain, the Leader of the Commons, said: "Evidence from the Call Centre Association suggests that companies that outsource part of their work create a big return for this country, in that the surpluses that they obtain enablethem to expand services, create more jobs and contribute to our prosperity.

"It is painful and difficult when such churning takes place, with some jobs displaced and replaced by other, often value-added jobs, but it is not as straightforward as saying that we have lost jobs to another country the return that comes back is important, too."

Meanwhile, Trade Secretary Patricia Hewitt today announced a study into the challenges facing the UK's call centre industry. She challenged the view of unions that the sector is in terminal decline during a visit to a Bristol call centre.

She insisted that despite the headlines the sector is still thriving.

But she acknowledged the decision of some firms to transfer jobs abroad hadbeen painful for individuals and communities, and announced a study into the global challenges facing the industry. Businesses, unions and other parties will be invited to join the debate.

Updated: 10:42 Friday, December 05, 2003