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23 Apr, 2020 19:29

Billionaire Branson wants government support in the pandemic downturn – and has resorted to attention-grabbing tactics to get it

Billionaire Branson wants government support in the pandemic downturn – and has resorted to attention-grabbing tactics to get it

Sir Richard Branson is a predator who’d scalp you if dandruff had a going rate. Now the hippie-turned-billionaire – the 565th richest person on earth – is plotting to borrow £500 million of taxpayers’ money from the UK government.

In an effort to win over public opinion and persuade ministers to rubber-stamp the deal, he has offered his privately owned kingdom, the 30-hectare Necker Island, which he bought in 1979, as collateral.

It's part of the British Virgin Islands and the sort of place where a Bond villain would have their lair. Usually those battling 007 are megalomaniacs, infatuated with their own self-importance. Branson has become the real-life equivalent.

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He needs the cash to bail out his airline, Virgin Atlantic – although when we say ‘his,’ it's actually only 51 percent his. The other 49 percent belongs to US carrier Delta.

Branson had the begging bowl out for Virgin Australia this week too, but the Australian government kept its wallet closed, so it slumped into administration. Despite it being his name that’s over the door, Branson owns only 10.42 percent of that airline. So, for him personally, there’s a lot riding on Virgin Atlantic's future.

To see two airlines that he founded go to the wall in a matter of days would be an acute embarrassment to him. But that’s exactly what should happen.

His wealth is estimated at $4.1 billion and even if he says it's all tied up in investments, he could either liquidate or sell them. Or sell the island in the usual fashion, without raising a fuss. Why should the taxpayer be helping out a wealthy, multi-national operator like Branson?

Virgin Atlantic has around 9,000 employees and it would obviously be disastrous for them to lose their jobs – but that still doesn’t make it the responsibility of everyone else to subsidise private companies who can't withstand financial turmoil.

Despite Branson's image as a rock-star tycoon, a maverick among corporate suit-wearing bores, he’s actually scarred by a litany of failures: Virgin Cola, Virgin Vodka, Virgin Clothing, Virgin Cars, Virgin Brides, Virgin Digital.

There’s also another airline project, Virgin Express, which used Brussels as its hub in the late 90s, which didn’t do well either. And while we’re here, what the hell is happening with his space-tourism pipe dream Virgin Galactic, which generates almost no revenue?

Branson has crafted the image of having the Midas touch, and has obviously made some good business decisions that got him to where he is now, but is a man with such a trial-and-error record a reasonable investment in a crisis of the current scale?

In an open letter, he says he doesn’t want “free money” and it would be a commercial loan. But if Britain did write him a £500 million cheque and Virgin Atlantic still went under, or the loan couldn’t be repaid, then the country would get Necker.

Based on pure maths, at its daily rental rate of $102,500, to recoup our money, we'd need to have it occupied for 5,981 days – that’s over 16 years – but, of course, that’s without taking into account any upkeep, insurance or the cost of maintaining 175 staff.

Selling it would be tougher than trying to find a customer for a trap door on a canoe. Even then, any buyer would know the government needed to recoup its money and would hold us hostage over price.

Throw into this mix the fact that British Airways hasn't asked for a penny from taxpayers. Neither has Ryanair. And while easyJet has been given money, it’s a far different proposition from Virgin Atlantic, and is in a much healthier position in terms of assets. It also has cash reserves of up to £2.3 billion to draw on, if needed.

There are plenty of other carriers that fly between the UK and its 30 destinations. There's nothing about Virgin Atlantic that has a material impact on British taxpayers. Someone else will buy its planes and fly them – will any passenger care if they’re not being served their pretzels by Virgin flight attendants in that garish red uniform?

Many large firms have ridden out the Covid-19 crisis so far by dipping into their reserves. The state, meanwhile, should be helping out the little fish, like a local plumber or a self-employed driving instructor. These people aren’t really business owners; they’ve just used some capital to buy themselves a job. To keep them going, and the wheels of everyday life turning, requires only a tiny government commitment.

Dousing the wounds with salt is the added fact that Branson pays no British income tax because he lives on Necker. That’s completely legal and his own affair, but it does take a fair amount of chutzpah to ask those who can’t flee to a tax haven to bail out your failing airline.

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Branson is a master manipulator who uses spectacle to distract from the truth. He once opened a flagship store of his Virgin Megastore chain by abseiling down the building along with Spice Girl Mel C. I happened to interview the singer many years later and she confessed it wasn’t actually her, but she let Richard play out the charade for the cameras with a stunt double. That’s him in a nutshell.

Britain needs to stand firm, let him and his airline go bust. Rip off the Band-aid in one quick motion.

As a final insight, it may appear to be heartfelt and brave to put your family home on the line, given that’s exactly what Necker is. So, if his ploy didn’t work and he lost it, what would poor Richard and his family do? Where would they live?

Oh, wait! He owns another private isle! Moskito Island isn’t far from Necker. It’s where Barack Obama famously learnt how to kitesurf after leaving the White House. 

Branson’s a slippery fish. Let's toss him back in the water. He’ll either sink or swim.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.