LAST month the Royal Bank of Scotland pleaded to be allowed to run itself as a fully commercial business when it announced £785m in bonuses, despite sitting on a debt to UK taxpayers of £20bn.

Yesterday it used basically the same pretext to outsource 250 jobs – 120 of them in its Edinburgh headquarters – to India.

Fight your way through the PR jargon about streamlining, increased efficiency and "our global footprint" and this is what the announcement amounts to: a total of 298 British jobs will be lost, including the non-renewal of 83 temporary contracts.

Even on a strictly business basis, such moves are often questionable. From a political and macro-economic point of view, it is unacceptable in a company that is 82% owned by taxpayers. These jobs are support roles in the bank's finance division. At a time when good quality full-time jobs are desperately needed, these posts are being exported. Even if those made redundant are supported back into work, they will potentially displace others in the jobs market in a year when UK unemployment could top three million, with concomitant costs to the taxpayer. An assurance that customer services jobs will remain in the UK is cold comfort.

Responsible capitalism should be about fairness at both ends of the salary scale and a company that is virtually state-owned should be expected to set an example. Yet, while chief executive Stephen Hester may have waived his bonus, many other did not, not to mention the 350 RBS employees who earned than more £1m last year. Meanwhile, the jobs affected by yesterday's announcement pay as little as £22,500 a year. The deal to rescue RBS was completed in a panic and it remains true that the consequences of letting it go to the wall would have been far worse.

Even so, with hindsight the Labour Government should have imposed ground rules. One should have been a strict limit on bonuses for senior executives. Another should have been a ban on outsourcing jobs to developing countries during a period of rising UK unemployment.

Mr Hester has described his job as equivalent to defusing the biggest time bomb in history. That has involved improving profits and reducing risk. It is getting rid of billions in toxic assets and shrinking the bank's balance sheet by more than a quarter over three years. The object of the exercise has been not only to repay the Treasury but also to end up with a bank that is not too big to fail. These aims cannot be achieved without a major jobs haemorrhage, especially in the investment division. More than 35,000 jobs have gone in all divisions across the world. But there is a difference between cutting RBS down to size and seeking short-term gain by exporting valuable jobs from the UK. Restructuring is a necessary evil. Outsourcing is a moral outrage. David Fleming of the Unite union commented yesterday: "There appears to be a deep hypocrisy in this organisation where the city bankers continue to be patted on the back, while staff are being sacked" Quite.