Scottish Affairs Committee: Press Notice

Announcement 09 of Session 2008-09

RBS responds to Committee following evidence session on Banking in Scotland

Gordon Pell has responded to the letter sent by Mr Mohammad Sarwar, Committee Chairman, yesterday (23 March), clarifying evidence he gave to the Committee on Thursday 19 March 2009.

The Committee is grateful to Mr Pell for his swift response in this matter.

The text of Mr Pell’s letter to the Committee is:

Dear Mr Sarwar,

Thank you for your letter of 23 March asking for clarity on our plans for jobs in the UK and Scotland. We have been very honest about the reality that we are under significant pressure to cut costs across our business as are all banks and most of our customers as we face into the worst of the recession. This is a very regrettable but unavoidable reality. We have not set out any overall target for job reductions globally, in the UK or in Scotland. We have an overall target for cost reduction over the next 3 years of £2.5bn. This will be worked through by all of our businesses around the world and the implications for our people will be communicated directly to them and their representatives as we know it. We will announce this in an orderly and appropriate way and have and will continue to fully meet our consultation obligations throughout.

Turning to specific comments I made on 19 March 2009. I was referring to the announcements we have made about UK jobs since the start of the year. We do not yet know the exact impact on Scotland as we have not yet completed the process. It was unfortunate that the confusion arose in the Committee as I was trying to provide a best estimate that job losses may be in the hundreds but I could not be specific because this number will be subject to change as the process continues. For example, we do not know what the take up of voluntary redundancy programmes will be and where the staff that opt for voluntary redundancy are based. In addition, employees will also be seeking redeployment opportunities. It is only when the approaches to mitigating against compulsory redundancies are completed e.g. voluntary redundancy and redeployment that the numbers who leave the organisation as a result of compulsory redundancy will be known including the number for Scotland.

We are trying our best to handle a difficult situation with sensitivity to our people and we have sought to avoid putting numbers out that are not accurate. In response to Committee questioning for a precise Scottish number on the announcements to date, until the process is completed we will not be in a position to give a definitive number for Scotland.

We would appeal to the Committee and its Members to recognise that we are fully aware of our responsibilities on all fronts. We know that we are in a privileged position being able to restructure the company with the support of the taxpayer behind us. We know that we are only in this position because of our central role in society and that with that role come responsibilities we mean to fulfil. Our mission is to restore the company to standalone strength so that we can repay the support of the taxpayer. This imperative will mean a number of difficult decisions have to be taken in particular as they affect jobs.

I tried my best to be as open and as honest with the Committee as I could be and to give straight questions as straight an answer as I could. I regret that this has caused confusion and I hope that this letter sets the record straight.

Please let me know if there is anything more I can do to assist the Committee with its enquiry.

Gordon Pell
Deputy Group Chief Executive


1.   Committee Membership is as follows: Mr Mohammad Sarwar MP (Lab, Glasgow Central) (Chairman),  Alistair Carmichael MP (Lib Dem, Orkney and Shetland), Ms Katy Clark MP (Lab, North Ayrshire and Arran), Mr Ian Davidson MP (Lab/Co-operative, Glasgow South West), Mr Jim Devine MP (Lab, Livingston), Mr Jim McGovern MP (Lab, Dundee West), David Mundell MP (Con, Dumfriesshire, Clydesdale and Tweeddale), Lindsay Roy MP (Lab, Glenrothes), Mr Charles Walker MP (Con, Broxbourne), Mr Ben Wallace MP (Con, Lancaster and Wyre) and Pete Wishart MP (SNP, Perth and North Perthshire).

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