MPs PROBE RBS OVER UK JOBS SWITCHED TO INDIA
Bank’s hiring spree after axing 30,000 British workers
THE Royal Bank of Scotland is to be investigated by MPs over claims it is ‘betraying’ UK taxpayers by sending hundreds of vital jobs overseas.
The troubled bank – saved from collapse in 2008 by a £45 billion taxpayerfunded bailout – has embarked upon a massive recruitment drive in India.
Hundreds are being hired as business analysts, IT workers, project managers and software designers. The same jobs could easily be done in the UK but RBS, which announced major cost-cutting this year, can pay Indian staff a fraction of the salary of a British worker.
A slick recruitment advertisement for
potential foreign staff shows smiling employees in high-tech offices finding time to play table tennis, pool and chess.
But The Scottish Mail on Sunday can reveal that MPs on the Treasury Select Committee are to grill the bank’s senior executives in the coming weeks – and demand they justify what has been branded a ‘betrayal’.
It comes after the axing of 30,000 British jobs – with nearly 450 of them lost in June alone.
Last night, politicians and union leaders accused RBS of turning its back on the people who saved the bank, and labelled its ‘offshoring’ of UK jobs ‘inexcusable’ and a ‘scandal’.
Scottish Conservative finance spokesman Murdo Fraser said: ‘RBS was bailed out by the very UK taxpayers it now seems to be turning its back on. Moving operations to the other side of the world where wages are a fraction of what they are here is inexcusable.
‘Jobs right across the UK will be lost as a result of this move and RBS should think again. It needs to remember who came to the rescue when times were tough.’
Unite national officer Rob MacGregor said: ‘The expansion in India has been achieved accumulatively over the past decade and we believe it will continue aggressively and by stealth.
‘It is a national scandal and we have made it clear to the bank, but there is no end in sight.
‘If there is an opportunity to offshore work, RBS will do it with determination – and they are unapologetic about this. They are moving work that can be done in the UK overseas at a time when we need to keep jobs in this country.
‘It is difficult for us to reconcile this with their stated ambition, which is to be the number one bank for trust, service and advocacy.’
An investigation by The Scottish Mail on Sunday today reveals the sheer scale of the ‘outsourcing’ being done by RBS to save money.
Although the firm does not operate as a bank in India – and has no branches and no significant number of customers there – it has embarked upon a huge recruitment campaign.
Jobs website Indeed has had 800 RBS jobs listed over the past four months. The company’s own website alone last week cited nearly 200 IT, human resources and programming posts in Mumbai, Chennai and Gurgaon – more than 4,000 miles from Edinburgh, where the bank has had its official headquarters for almost 300 years.
Last Friday, there were 197 RBS roles advertised on the Indian job website Naukri, and in the past three days 51 new positions were posted on Indeed.
Online promotional material aimed at potential recruits states the bank is ‘committed to making RBS India a great place to work which is truly inclusive, with the right work-life balance’.
Wages in India are a fraction of those paid in the UK. An analyst in Britain earns around £42,000 a year, compared with £8,700 in India. Similarly, a project manager in the UK is paid an average of £68,000, while the same role in India carries a salary of only £29,000.
Last night, Labour MP John Mann, a member of the Treasury Select Committee in the last Parliament, said: ‘It is appalling that they are repaying the taxpayer by shifting jobs abroad. People will be angry. Workers here are perfectly capable of doing these roles.
‘The public image of RBS will not withstand it. They are closing branches, too, and it will ultimately become harder to see bank staff unless they get their house in order. We will end up with a bank employing more people in India than in the UK. It will backfire.’
Mr Mann added: ‘Cutting corners is what got them in this mess in the first place – they were the biggest banking disaster during the banking crisis by a considerable degree.
‘If they continue this way, they will lose customers and their business will deteriorate. I don’t know why it has been allowed to carry out such bad behaviour. Everyone knows someone who has been disappointed by RBS.’
The Royal Bank of Scotland was founded in Edinburgh in 1727. It went on to become the world’s largest bank after a brief period of aggressive expansion under Fred Goodwin, chief executive between 2000 and 2008.
But during the credit crunch in 2008, after a consortium led by RBS took over Dutch bank ABN Amro for £49 billion, the bank was driven to the brink of collapse. It received a £45 billion bailout from the UK Government, meaning taxpayers effectively controlled a 72 per cent stake in the company.
RBS has since closed hundreds of branches across the UK and cut more than 30,000 jobs. Nearly 450 positions were slashed in June alone, and Unite reported last month that RBS is planning to axe 880 more positions by 2020 – 40 per cent of permanent IT staff in London and 65 per cent of contractors.
Meanwhile, hundreds of jobs are being created in India – adding to the 12,000 staff already working there, according to Unite figures. The bank is also actively recruiting in Poland, and Unite says it has around 1,500 workers in Warsaw. It is encouraging people to join its ‘Poland Talent Network’, a pool of potential staff. At the end of last week, 41 new jobs were on the bank’s website.
Last night, RBS said it was under pressure to reduce costs. A spokesman said: ‘As RBS moves towards becoming a simpler, smaller, UK-focused bank, we continue to look at our structures to ensure they are a good fit for our business and that we have the right activity in the right locations. This has led to a small number of roles moving from the UK to our hubs in Poland and India.’