What should the UK govt do about Branson & Virgin Atlantic?

[ossie]

I
Report on the potential impact on Crawley below. I'm slightly biased as my daughter works for BA but if they are bailed out with loans I'd like to see some decent strings attached.

Yes, it's a point I made earlier, not so much strings, but the taxpayer getting good value for money.

Agree. The tax payer needs to win on this. Both airlines generally treat their staff like cannon fodder. Both are furloughing staff, that money needs to be reclaimed for starters.

[Oldjohnw]

Branson is in the middle of case during the NHS over a contract he lost. People like him impoverish the institution. He already sued the Dept of Transport. He lives in a tax haven. We need to reduce air travel not maintain the status quo. His train company took millions from the Treasury.

[carpetcleaner]

I don't see why companies shouldn't be helped using taxpayers money if they hit difficult times just as individuals are.

[Bonefishblues]

Branson is in the middle of case during the NHS over a contract he lost. People like him impoverish the institution. He already sued the Dept of Transport. He lives in a tax haven. We need to reduce air travel not maintain the status quo. His train company took millions from the Treasury.

NHS paid 2.4bn in compensation for negligence in 2018/19. It's doing just fine on its own without Branson's assistance, I think.

[PH]

Branson is in the middle of case during the NHS over a contract he lost.

Would the case they're in the middle of be the one settled in 2017? Or is there another one?

[Oldjohnw]

Branson is in the middle of case during the NHS over a contract he lost.

Would the case they're in the middle of be the one settled in 2017? Or is there another one?

You're probably right. I'm just not up to date. I was writing from memory, clearly imperfect. The principle remains: he does not stick up for the NHS.

[irc]

No Dosh from me! All air travel should be funded by the passengers who take advantage of the service. I don't use them, so why should I have to pay for them?

Better increase rail fares then so the users of the service pay the cost.

Arguably a one off 500M is better value than annual rail subsidies. For many journeys within the uk subsidised rail is more expensive than unsubsidised air.


I,d be inclined to refuse the subsidy on the basis that they are not a UK company. If you register a company elsewhere for tax advantages then ask that country for a loan .

If Virgin go bust the gap in the market will be filled by other operators if the demand is there

In any case if the govt is serious about going zero carbon then air travel will need to be reduced. So why spend money stopping some of that reduction happening?

[Oldjohnw]

Branson is not alone in this. (Sir) Philip Green has paid billions in dividends to himself /wife which avoid the tax system as he is resident in Monaco. He still wants help

Trump's hotel business wants rent relief for the hotel in New York. The federal government, which Trump heads, is the landlord.

[reohn2]

When the rich guys are all piddling in the same pot they'll look after each other,the tax payer will of course bear the brunt and queue at food banks when the economy goes mammary glands skyward pointing,whilst the rich remain rich.
These people point fingers at trade unions for looking after their member's interests whilst paying little tax and living the the life of riley in their tax havens and private islands!

[peetee]

I suspect they will receive government handouts to ‘secure the future of the employees’. Does this ever work? I know of people who lost their jobs in the steel industry in the 80’s. Soon after their pensions disappeared too. They were completely without government help from start to finish while the steel corporation received many more government props and years later another pension scandal hit many of the remaining workforce.
Life’s not fair.

[reohn2]

......Life’s not fair.

It's not you're right,but it's a lot less fair when dealing with neoliberalist capitalist barstewards,that's for sure!

[pete75]

The point is Branson is wealthy enough to bail out the company himself.

I understand that. Do you understand the way business structure work? That a limited company is in law a separate entity from it's directors. The UK government has told VA to go and raise the finance elsewhere, if they fail to do that and return it will have to be judged on the business criteria rather than the personal.
Al's case that it isn't a vital British business and should look after itself is valid, though I'd be surprised if it could legally be treated any different to another in similar circumstances. I don't particularly care if an airline goes bust, I don't fly and I think we'd all be better off with less of it. I do care how my friends at RR will cope if the orders dry up.

Yes but you don't.Directors are not a separate entity to a limited liability company. They are very much part of it's structure, have legally laid down functions and can be banned from holding any company directorships if they mishandle the company in certain ways. It's shareholders who are a separate entity.

The point is that Branson himself was asking for government aid for Virgin when he himself could provide that aid.

[mercalia]

in case people here werent able to read the article, Branson only wants a commercial type loan that he will pay back. But I still think there should string attached.

The latest Guardian article clearly dont like Branson -



Motorboating enthusiast Richard Branson is playing a particularly idiosyncratic game of Monopoly. He would like to mortgage his private Caribbean island. In return, you, the taxpayer, have to buy him Mayfair and Park Lane, all the greens, all the yellows, all the reds, and stick a hotel on every one of them. Also, if Richard lands on Super Tax or Income Tax he doesn’t pay them. And if he gets the Community Chest saying “pay hospital fees”, he refuses and sues the hospital. The only bright side is that he no longer operates out of any of the stations.

according to the article Bransons collateral, Necker Island, is worthless.

a good rant to start the week?


https://www.theguardian.com/commentisfree/2020/apr/21/richard-branson-bailout?

[PH]

Yes but you don't.Directors are not a separate entity to a limited liability company.

I can't really be bothered arguing with you yet again, it just goes on and on...
This is from the government website, of course directors have legal responsibilities, that does not have any effect on what I said.

Having 'limited liability' status means the company is an entity in its own right.

https://companieshouse.blog.gov.uk/2018 ... d-company/

[slowster]

Virgin Atlantic is owned by Delta Airlines, a USA based company which presumably pays tax on its profits to the US Govt., and by Virgin Group Holdings Ltd, which is registered in the British Virgin Islands. Richard Branson and his family hold a £2.7 billion stake in this offshore, tax-free, tax haven company.

Any US airlines like Delta Airlines which need to be bailed out during the current crisis will presumably seek such money from the US government, and they should allocate such money as needed to pay for their share of supporting jointly owned subsidiaries like Virgin Atlantic. Virgin Holdings Ltd's proportionate share of money to support Virgin Atlantic should likewise come from the government of the country where it is registered and pays tax. If Branson chooses to domicile Virgin Holdings Ltd in the BVI to avoid paying tax on its profits, and as a result the BVI government has simply never received the sort of tax revenues that would make it wealthy enough to turn around now and offer a bailout to Virgin Holdings Ltd, that is Branson's problem.

The fact that the continued trading and existence of Virgin Atlantic is in the interest of the UK, because of
- the wages it pays UK based employees and the income tax they pay
- the purchases it makes from Rolls Royce and the money it pays to other parts of of the UK economy
- the competition it provides to BA and others which helps to discourage over charging
is a seperate matter.

If the UK government steps in now to help Virgin Atlantic because of those factors, it should do on terms most favourable to the UK and UK taxpayers. The suggestion that Branson just wants a 'commercial type loan' is disingenuous, because evidently he cannot get such a loan on the terms he wants from any commercial provider, and so instead he wants a cheap loan from from the UK Govt. and taxpayer. The UK Govt. should instead drive a hard bargain and only offer a loan or cash for equity on terms most favourable to us. The UK owes no favours to a non-UK registered business domiciled - like Branson himself - in a tax haven.

In extremis if Virgin Atlantic were to go bust, the UK Govt. should be able to buy it very cheaply from the administrator/liquidator and continue to run the business until the airline industry returned to normal times and the airline could be sold at a healthy profit.