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Richard Branson addresses criticism in an open letter to Virgin Group employees

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Sir Richard Branson published an open letter to Virgin Group employees yesterday, in part to address some of the criticism he has received – including in our comments – over issues including his liquid (as opposed to asset) wealth and his tax status.

It includes a commitment to raise funds against Necker Island, if possible, to inject into Virgin Group companies.

The timing was unfortunate, as it includes a paragraph on Virgin Australia which slid into administration shortly after publication.

As we covered on Saturday, the UK Government is believed to have rejected Virgin Atlantic’s first bid for a rescue loan on the grounds that it had not sufficiently exhausted the resources of its shareholders (Virgin Group and Delta Air Lines) and that its business plan to repay the money was too optimistic.

I have included extracts below.  The full letter can be found here.

For clarity, the bolding and images were added by me.  Outgoing links have been removed but can be found in the original.

Over the five decades I have been in business, this is the most challenging time we have ever faced. It is hard to find the words to convey what a devastating impact this pandemic continues to have on so many communities, businesses and people around the world. From a business perspective, the damage to many is unprecedented and the length of the disruption remains worryingly unknown.

Together with our Virgin company teams, I am working day and night to look after our people and protect as many jobs as possible. We are operating in many of the hardest hit sectors, including aviation, leisure, hotels and cruises, and we have more than 70,000 people in 35 countries working in Virgin companies. We’re doing all we can to keep those businesses afloat and I am so thankful to all of you who have continued to work so hard in these difficult times. We have already committed a quarter of a billion dollars to help our businesses and protect jobs, and will continue to invest all we can. 

I’ve seen lots of comments about my net worth – but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw. Over the years significant profits have never been taken out of the Virgin Group, instead they have been reinvested in building businesses that create value and opportunities. The challenge right now is that there is no money coming in and lots going out.

My passion has always been creating businesses that improve people’s lives and over the years we have created hundreds of thousands of jobs. Today, the cash we have in the Virgin Group and my personal wealth is being invested across many companies around the world to protect as many jobs as possible, with a big part of that going to Virgin Atlantic.

Much has been said about Virgin Atlantic employees taking a wage reduction for eight weeks, spread across six and a half months. This was a virtually unanimous decision made by Virgin Atlantic employees and their unions who collectively chose to do this to save as many jobs as possible – it was not forced upon them by management.

I am so proud of the Virgin Atlantic teams who continue to deliver critical medical cargo flights to the UK, and the many Virgin Atlantic people who are currently volunteering with the NHS. Their spirit is so heart-warming and inspiring, and I couldn’t be prouder of our amazing people (it deserves saying twice!) I am also deeply moved by the thousands of messages of support from our incredible people at Virgin Atlantic and around the Virgin family. They mean so much to me – thank you all.

Together with the team at Virgin Atlantic, we will do everything we can to keep the airline going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for. This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back (as easyJet will do for the £600m loan the government recently gave them).

The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value. Virgin Atlantic started with one plane 36 years ago. Over those years it has created real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large.

The same is true in Australia, where the brilliant Virgin Australia team is fighting to survive and need support to get through this catastrophic global crisis. We are hopeful that Virgin Australia can emerge stronger than ever, as a more sustainable, financially viable airline. If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies. We all know what that would lead to.

At this time of crisis, we also have thousands of brave frontline employees working for Virgin Care as part of the NHS under extremely challenging circumstances. First and foremost, I want to thank you all for your dedication and resilience. It is humbling to see all the incredible work you are doing providing much needed NHS services, in particular those of you who are helping and giving dignity to people with severe COVID-19 cases. We have invested more than £75m to date into the NHS and have never made a profit. If Virgin Care ever does make a profit, we have committed to reinvest 100 per cent of that back into the NHS.

Much has been written about Virgin Care’s dispute with a commission over a contract a number of years ago. Some will say it was unwise for Virgin Care to do this, but the most important thing is that Virgin Care was never intending to profit from it and 100 per cent of the money awarded went straight back into the NHS.

Virgin Money Giving, our non-profit fundraising platform, has also received criticism for the fees they took when processing a donation to charity. Virgin Money Giving never makes a profit and never will. Virgin Money Giving was founded in 2009 when Virgin Money began sponsoring the London Marathon. At the time, one player dominated the online fundraising industry. In a sector where the entire purpose is to make the most of the money raised for good causes, it operated with a for-profit business model.

Virgin Money wanted to disrupt this market by providing a not-for-profit alternative that challenged the status quo. Virgin Money Giving was able to offer the same service with just a two per cent fee (to cover overhead costs, which Virgin Money are now generously stepping in to cover completely for all charities). Virgin Money Giving has supported more than 1.3 million fundraisers, raising over £800 million for good causes – all without making any profit whatsoever. Tens of millions more have gone directly to good causes due to people donating through Virgin Money Giving rather than for-profit platforms.

There have been comments about my home. Joan and I did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island, which I bought when I was 29 years old, as an uninhabited island on the edges of the BVI. Over time, we built our family home here. The rest of the island is run as a business, which employs 175 people. As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the Group.

I have been honoured to work with all of you over the last five decades building companies and creating competition and choice for consumers across a whole range of industries. Our companies have created hundreds of thousands of jobs and paid hundreds of millions in tax around the world (and will continue to do so). Our companies based in the UK pay tax in the UK, and so forth.

You can read the full version here.

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Comments (215)

  • Fabulous Dahling says:

    To quote a previous poster…..but just dislike of aggressive serial tax avoiders who are grasping at the taxpayer in almost unseemly haste.

    Step forward……… Victoria Beckham multimillionairess utilising the governments 80% scheme, for a vanity project/business that never made a profit.

    • Anna says:

      +1, I eagerly await the daily Piers Morgan savaging these days!

      • Anna says:

        And that footballer who won’t take a 12.5% pay cut.

        • Fabulous Dahling says:

          Arsenal’s Mesut Ozil, poor thing can’t manage on £350,000 a week.

          • mvcvz says:

            But he’s not asking for a loan supported by my taxes.

          • Kim Il Sung says:

            Maybe he could donate a few quid to Branson. There’s only so many Range Rovers you can reasonably buy after all….

        • Almi says:

          Why bash a footballer when Matt slimy Hancock wasn’t willing to take a paycut and follow his own advice on footballers “doing their bit”

          I have seen Ozil do very good charitable work and read news articles written about it secondly if there was three players who refused the 12.5% pay cut why wasn’t the other two names mentioned – he was willing to defer his wages thus saving the club £350k a week that’s 100% the football club would save – where would the 12.5%/100
          % of his wages go? his union the PFA advised all footballers to not take any pay cut whatsoever. half of 12.5% would go to the govt to waste on vanity projects anyway.

      • J says:

        What’s Piers Morgan ever done for Britain? He illegally hacked phones and published fake photos depicting false allegations of British troops abusing Iraqi civilians. But, Branson who’s employed thousands of people and built successful British businesses is a villain according to Anna. Interesting.

  • No lockdown for moi says:

    I think one bon mot we should all bear in mind is: Rules are for the obedience of fools and the guidance of wise men.

    • mr_jetlag says:

      Attributed to one Cpt Douglas Bader, who lost both legs disobeying the Rules. 🙂

  • Terry Curren says:

    Virgin staff are being supported by UK tax payers. Someone will buy the planes and fly them; Branson transfered money to a safe haven. Let nature take its course and Branson lose HIS money; he will learn how his staff feel when faced with such limited financial resources.

    • J says:

      No chance, if Virgin go that’s it. But yes the taxpayer will be supporting a lot of Virgin staff for a very long time if they go.

      • Novice says:

        May I ask why does this matter so much to you, J? As I have only ever noticed your comments regarding Virgin…

        I’m just asking for science…

        • Novice says:

          Btw I mean nothing bad by my comment. I personally have nothing against Virgin or Branson. Us young people see the guy as an inspiration due to his successes.

        • J says:

          I comment on lots of things I use regularly and have experience of such as Virgin, BA, Lufthansa, Ryanair etc. I don’t work for Virgin, nor any close family/friends. I have had many good experiences with Virgin though and many bad experiences with BA.

          • Novice says:

            Fair enough.

            I can understand that then.

            Once in my lifetime (recently) I had the misfortune of using Jet2 and if I were to be asked about them I reckon I’d be passionate about giving my two cents about them. So I understand frustration.

          • J says:

            Really? I’d heard good things about Jet2 for a LCC – can be lucky/unlucky with any though. Whoever it is with let’s hope we can fly again safely sometime soon 🙂

      • Lady London says:

        And as Rob sort of said, we’d be paying through the nose for British Airways flights for up to 10 years after VS disappears if we are lucky.

  • Mikeact says:

    I would imagine that Virgin have numerous lobbyists knocking on Whitehall doors, and undoubtedly a very powerful group. Will they get their way ?

    • J says:

      You think? The government don’t mind tax dodgers but they don’t like liberal remainers. IAG also carry a lot more clout and are very actively campaigning against any form of assistance. From the perspective of public confidence in the UK though they may get save it I hope.

  • TripRep says:

    “Joan and I did not leave Britain for tax reasons”

    Yeah, right that didn’t influence the decision at all.

    Easy to prove it.

    I believe HMRC welcomes donations.

    • Rob says:

      You are missing the totally obvious point. The companies could remain registered in the BVI and he could live anywhere. All of Apple’s non-US businesses funnel into Jersey now. If you were in your 70s would you really live somewhere you didn’t want to live, purely to save a few quid on tax?

      • ash says:

        Why not just register them in the UK then?

        • Rob says:

          Obviously he could. But that wasn’t the question. The question was about why live abroad. And the answer is ‘because he prefers it’, not ‘because of tax’, because he’d get virtually all the tax benefits just by moving the legal entities.

  • TripRep says:

    Virgin miles data point. With the uncertainty I derisked a little over half my balance.

    Sat 28th March
    Transfer to Hilton initiated by txt,

    Early April
    Received email for security checks (keep an eye on your junk folder)

    21st April
    Hilton points arrived.

  • AJA says:

    https://www.forbes.com/sites/willhor…/#2cb0f0a630d2

    Forbes reports “Delta will not be providing Virgin Atlantic any financial assistance. It is Delta expecting cash: Virgin has to pay Delta $200 million related to their joint-venture, the airlines agreed earlier this year.”

    The $200m Virgin Atlantic owes Delta stems from them combining their joint-venture into the larger Delta-Air France-KLM JV, which resulted in a change of performance.

    Ed Bastian Delta CEO apparently also said ““We’re not in a position to be making any financial commitments to any of them,” “They are aware of that.” Delta’s other major investments include Aeromexico and LATAM.

    ” I trust Virgin Atlantic will work through its challenges with the Government and with Richard. If they are required to go through an administration process in the UK, I’m confident they could re-emerge, there is a need for the Virgin brand”