Sir Richard Branson, the billionaire founder of Virgin Atlantic has provoked a backlash after asking the government for a £500 million bailout to help his airline through the economic impact caused by the coronavirus pandemic.
The plea for financial support, made by the Virgin boss from his privately owned Caribbean island, has been condemned by public figures as an attempt to “milk the system”.
However, Branson’s bid for a government bailout has been backed by airline industry manufacturers and airports, with Airbus and Rolls Royce warning ministers the collapse of Virgin Atlantic could lead to their own demise.
Over Easter weekend Branson’s bailout bid received the support of Manchester Airports Group head Charlie Cornish, who, in a letter to the chancellor Rishi Sunak, said Virgin Atlantic flights “are directly benefitting the economies of Manchester and the surrounding region.”
Cornish said the airline’s “growth in capacity has been essential in allowing Manchester to become one of the best-connected European airports to the US.”
‘Rich billionaires milking the system’
But Labour’s new deputy leader Angela Rayner called out the Virgin boss in a tweet, writing: “Richard flog your private island and pay your staff, we are in unprecedented times here. Now is the time your staff need support after making mountains of cash for the company.”
Rayner’s comments were echoed by a report in the Los Angeles Times, which states: “It’s hard to fathom why [Boris] Johnson would throw Virgin Atlantic a lifeline before its American and British Virgin Islands domiciled shareholders have reached deeper into their own pockets.”
“Rich billionaires milking the system” at a time of national crisis is unacceptable, said Labour’s John McDonnell, the former shadow chancellor, in an interview with the Guardian.
Branson has paid no income tax for 14 years
The backlash to Branson’s plea is fuelled by the fact the business man – whose wealth is calculated by the Bloomberg Billionaire Index to be $5.56 billion (£4.44bn) – has paid no personal income tax in the UK since moving to the British Virgin Islands, 14 years ago.
The 8,000 Virgin Atlantic staff, and thousands of others working for Branson’s group of companies, have been asked to take voluntary redundancy or put on extended leave after the world’s 312th richest person pledged £250m to bolster the Virgin Group during the pandemic.
Conservative MP Richard Fuller warned Branson: “When it comes to looking at the protection of your workers, the time is now, and we will judge you all by your actions.”
Branson founded Virgin Atlantic in 1984 and retains a 51% share of the company, with 49% owned by US airline Delta. In a letter to Virgin employees, the 69-year-old wrote: “I have always viewed Virgin Atlantic as one of my children, born 35 years ago around the same time as [daughter] Holly and [son] Sam”.
Virgin Care sued NHS in 2017
Health secretary Matt Hancock dodged the question as to whether he thought Branson’s Virgin Atlantic was a “worthy recipient” of taxpayer money given Branson’s Virgin Care sued the NHS in 2017 after it failed to win an £82million contract in Surrey.
The case was settled out of court with Branson’s company receiving a £328,000 cash settlement from the NHS and “cashstrapped county council”.
Virgin Care has received more than £2 billion worth of NHS and local authority deals yet “has not paid a penny in corporation tax” since it was founded in 2010”, reported the Mirror earlier this year.
‘Virgin plays a parasitic role in the NHS’
“Virgin continues to play a parasitic role in the NHS, fragmenting services and poaching NHS-trained staff and undermining nearby NHS trusts,” said health campaigner Dr John Lister.
“This is made worse by the fact that the company pays no corporation tax and therefore only takes resources from the public sector while contributing nothing of value.
“The fact the firm is not making a profit suggests its continued involvement with the NHS is either based on ideological opposition to public services or a series of loss leader contracts hoping to force the prices up and cash in later.”