(THE GUARDIAN) – Sir Richard Branson has said he will put his private Caribbean island up as collateral in his attempt to persuade the UK government to save his Virgin Atlantic airline from going bust.
Branson, who is the UK’s seventh richest person with an estimated £4.7bn fortune and lives on Necker Island in the tax-free British Virgin Islands, on Monday promised in a public blogpost that he would “raise as much money against the island as possible to save as many jobs as possible”.
Branson, 69, made the pledge as he desperately tried to convince the government to give his airline a £500m bailout to help it through the “devastating impact this pandemic continues to have”.
“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it,” Branson said in a public blogpost on Monday. “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.”
The billionaire has faced mounting criticism for pleading for taxpayers’ cash, rather than using his own fortune to rescue the airline. Branson founded Virgin Atlantic in 1984 and retains a 51% stake alongside the US airline Delta with 49%.
The former shadow chancellor John McDonnell told the Guardian it was unacceptable that “rich billionaires [were] milking the system” at a time of national crisis.
Branson’s fresh plea for taxpayer support comes after the government reportedly rejected Virgin Atlantic’s proposal for a £500m bailout. The Financial Times reported on Friday night that the airline’s initial bid had been rejected and that the airline had been told to explore other ways to raise cash before seeking a state bailout.
Branson said he was pleading for a taxpayer loan, not a handout. “This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back.”
He dismissed the idea that he should consider tapping into his vast personal wealth rather seeking government support.
“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,” he said.
He has pledged to inject $250m (£197m) into Virgin Group, his empire, which stretches from planes and trains to health clubs and spaceships and employs about 70,000 people. The pledge – of which $100m is thought to be earmarked for the airline – is 5% of his fortune.
Branson is the 268th richest person in the world with an estimated $5.9bn paper fortune, according to the Bloomberg billionaires index.
His plea for government cash has prompted a substantial backlash, with many pointing out that the entrepreneur has paid the exchequer no personal income tax since moving to the tax-free British Virgin Islands 14 years ago.
On Monday, Branson said he and his wife Joan “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island”.
“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.”