A union leader will tonight call on businesses to explain why offshoring is best when major companies are opting to stay in the UK – and several more have returned to home shores.

At a conference in London tonight, Roger Lyons, President of the TUC, will point to companies like Legal & General, Royal Bank of Scotland, Royal Sun Alliance, Alliance and Leicester and the Co-op which, he claims, have conducted studies into offshoring but which have opted to stay in the UK.

Mr Lyons also cited multi-national conglomerate GEC, the software company Dell and Australian finance giant Meyers as examples of powerful companies that have returned home from the Indian sub-continent.

Hidden business costs caused by rising labour costs, high levels of staff turnover, problems with power and telecoms infrastructures, plus relocation costs and geopolitical uncertainty, were issues that businesses favouring offshoring must consider.

Mr Lyons said: "The business case for offshoring has not been made. Companies that offshore in pursuit of immediate cost savings without thought to how the economy will look in 10 years time are threatening their own ability to trade successfully.

"Companies are already offshoring from India to China in a race to the bottom. Every decision we make must be based on the best interest of both the UK and Indian economies and not in the bank balance of rapacious offshore providers."

Mr Lyons said that many unions believe that companies were being lulled into offshoring by "aggressive marketing" from offshore providers and consultancy firms.

(gmcg)