Don’t be fooled by his West Coast Main Line pleas, Richard Branson is no people’s capitalist

(GETTY IMAGES)

Sir Richard Branson has long been Britain’s favourite capitalist. Unlike the fat cat tycoons of left-wing caricatures, sat atop their shiny towers counting wads of cash, Branson is considered one of a new breed of entrepreneurs that emerged at the turn of the century. Usually engaged in some sort of philanthropic work in the developing world, these touchy-feely industrialists presented the public with a softer side of commerce as they “tore off their ties, threw open their shirt necks and fretted about their employees’ spiritual well-being,” as Terry Eagleton puts it.

Nor does his popularity appear to have abated with the passage of time. An e-Petition was launched by a completely unconnected party calling for the award of the £5.5 billion West Coast franchise to FirstGroup to be reconsidered. It has attracted 160,000 signatures, which Branson has pointed to as evidence of “the strong British instinct for fairness, common sense and democracy”.

Despite his vast fortune (estimated at £3.4bn by the 2012 Sunday Times Rich List), if the petition is anything to go by Branson maintains an almost impenetrable aura of the everyman David fighting the corporate Goliath. In a 2011 poll by the Aspire Global Network (AGN), Branson was voted the leader most people said they would most like to work for. Elsewhere he’s even been voted the people’s ideal choice for the next Prime Minister.

Considering some of the causes he has previously championed, the longevity of the cult of Branson is as baffling as it is impressive. The privatisation of the rail network was one of the most disastrous sell-offs of public assets during John Major’s government, yet Branson, unlike the majority of the British people, has done extremely well out of it. Virgin Rail has in the past depended heavily on state money and been the subject of a large number of passenger complaints. The pre-tax profits for Virgin Rail Group Holdings Ltd in 2011 were £102.7 million, with profits per employee reaching a staggering £33,713. Those who believe in a classless alliance between the exploited and the exploiters may also be disappointed with Virgin’s record on workers’ rights. In April, Branson pleaded with employees at his Virgin America Airlines not to vote in favour of joining the Transport Workers Union (TWU) after staff had filed a petition with the National Mediation Board (NMB) for representation with the union. According to TWU organising director Frank MacCann, while flying Virgin can be enjoyable for passengers, flight attendants have a “very different experience”. “Work rules are inconsistently enforced, promises regarding rest, vacation and benefits are often broken, and discipline for minor violations can be unnecessarily harsh and inconsistently applied,” McCann said.

“Flight attendants realise that the only way they can improve their working conditions is to form a union,” he added.

It is a little known fact that Branson’s first company started amid a purchase-tax fraud that landed him a night in prison in 1971. Only last year we also learned of plans by Branson to move a slice of his business to Switzerland to reduce his company’s tax bill. According to Virgin, the move was undertaken to “accelerate [Virgin’s] expansion” and “develop the Virgin brand internationally”. It isn’t hard to discern why large corporations make announcements about their tax affairs in language like this. They are often trying either to conceal something from their workers or sell something to the rest of us. In this case Virgin appeared to prefer gobbledygook to an admission that they wanted to reduce their payments to the UK exchequer. Depriving the treasury of funds – funds that pay, amongst other things, for the treatment of terminally ill children– is hardly something to boast about, after all. That isn’t to say the bar was set particularly high to begin with or anything. Commenting on Virgin’s historical tax record before the move was announced, Richard Murphy from Tax Research said: “I didn’t think Virgin paid any tax here, let’s be blunt about it. It’s been remarkably poor at doing so.”

What is it then that accounts for Branson’s enduring popularity? In trying to understand the hype it’s worth remembering a remark once made by Mark Twain: if you give a man a reputation as an early riser, that man can sleep till noon. In recession-hit Britain people also need reassurance: reassurance against a backdrop of collapsing financial scenery that it isn’t all just one big racket. Through sheer force of personality Branson gives us this, while at the same time managing to convince people that the interests of billionaires and workers are one and the same. Branson has that all-important X-factor, too; and the ability to glide seamlessly through the world of celebrity is one of the most valuable assets a modern politician or captain of industry can possess. It’s how Princess Diana became the “people’s princess” despite leaving her entire estate to her own super-rich family. It’s how Tony Blair was able to turn up at Labour conferences year after year, mouth a few platitudes and all would be forgiven. It may also explain how it was that Sir Richard Branson came to be anointed as the exemplary peoples’ capitalist. The main objection his admirers face is a substantial one, however: peoples’ capitalists, like unicorns, do not really exist.

Follow James on Twitter: @Obligedtooffend

EDIT 31/08/2012: This article previously stated that it was Richard Branson who set up the e-Petition urging Government to reconsider its decision on the West Coast Mainline bid. It has since been brought to our attention that this was not the case and we were happy to amend the text accordingly.

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• trottitout

  Ha ha ha. Doesn’t stop you reading it though. Or are you just shilling for the British Virgin?

• http://twitter.com/rsmck rsmck

  John – you may have seen more of the bid than I have been able to ( not for want of trying – I’ve asked First, Virgin and DfT directly ) however it has been widely reported (not just by Virgin) that the premiums are loaded towards the end.

  I am aware First did not take up the option for the 3 years, and that they have the right to exit the contract at this stage, however it does suggest they aren’t very committed to the franchise and by doing so they do avoid paying rather a lot.

  With respect to complaints I don’t feel you can lump them all together – the ORR figures (which I’m assuming you’re referring to) don’t differentiate about the nature of complaints and other independent reports (Which, Passenger Focus etc) along with my own experiences rate Virgin much higher than First.

  If the only ‘information’ the public have had is that from Virgin, then why aren’t First doing anything to attempt to defend their position ? Why, with so much public opposition have they not published their own statements.

  I am not totally uncritical of Virgin’s statements – I have publically criticised several of their points in their ‘50 reasons to sign the petition’ for example as some of them were by no means exclusive to Virgin.

  Virgin PR, whilst spun in Virgin’s favour obviously, is not factually inaccurate and even the DfT admitted the virgin bid was ‘more deliverable’ and ‘carried a lower risk’ – and as a rail passenger and tax payer that sounds better to me than the potential of a higher bid premium over 13 years.

  It’s my opinion – not that of Virgin – and I’m glad it’s shared by 165,000+ people. Also if the claims were true that people were just blindly signing the petition as ‘followers’ or ‘fans’ of Richard Branson then we wouldn’t be seeing the huge numbers of signatures along the route of the WCML, but a more even spread across the country I’d expect.

• http://www.facebook.com/andrew.euan Andrew Euan

  ”
  funds that pay, amongst other things, for the treatment of terminally ill children” – I can’t believe you actually wrote that; ever thought of applying for a job with The Sun? Branson has injected more than almost any of us ever will in any of our lives into our society. But rather than take issue with people who take money from the system unfairly, why not attack this man for trying to make his company that bit more profitable on the international stage legally? Terrible article.

• tcook1943

  At Flores in the Azores Sir Richard Branson lied,

• Silicon

  The share thing was a no loss situation for Branson. The shares go up, he sells them & reaps the PR benefit (as happened). The shares go down? Easy: it’s a standard share buyback, increased dividends for the remaining shareholders & Virgin have paid themselves. Nefariously? Short your own shares so you make a profit if they go down. Impossible to lose in this situation.

• http://www.facebook.com/profile.php?id=100001368155919 Mysterio Monkie

  I don’t think the article is wrong, but don’t underestimate how bad First Groups reputation is in regards to rail. I’m willing to bet that a considerable number of signatures on the petition are from Suffolk. First were kicked off a relatively small route for complete incompetence….how many times has that ever happened? Actually forcibly removed because it was so bad.

  Virgin have run that line well. I use their service on a regular basis as well as most of the others…..they are the best. Ego driven or not, Branson is completely correct to oppose First Group being given the most important over ground rail line in the country. They are ok with buses, but Trains are a completely different business. I don’t care if they give it to Branson or not, just don’t give it to First.

• http://www.facebook.com/profile.php?id=100001368155919 Mysterio Monkie

  Excellent post. I use that service as well on a regular basis, Virgin provide an excellent service.

  First have a terrible reputation for rail, they were kicked off their contract early in Suffolk for incompetence. I commute regularly to Birmingham and Liverpool and indeed have used their Great Western “service” and had to avoid it like the plague. You can guarantee two things will happen with First 1. You will never be on time with a First run train. 2. The reasons are always bizarre…..”Forgetting to provide a train” is my favourite….that can happen 3-7 times a week.

  The only reason First are getting anywhere near that contract is that someone has taken a bribe, end of