Bailed-out Branson takes revenge on open press

UPDATE 15 JANUARY:    Virgin U-turn – Branson says:  “We must not ever be seen to be censoring what our customers read and influencing their freedom of choice, nor must we be seen to be moralising on behalf of others.”

10 JANUARY

SIMON BAIN

The trouble with handing our railways over to obscenely rich narcissists is they start telling us what we should think.  Yes ‘Sir’ Richard Branson is not content with fleecing the taxpayer for a £2billion bail-out on his Virgin East Coast franchise, he is now telling travellers on Virgin West Coast that they can no longer buy the Daily Mail on his trains.  His reason?  The newspaper is “not compatible with the VT brand and our beliefs”.

Funny that. I actually read the Mail every day and was under the impression it was a staunch supporter of the free market capitalism that has created Brankenstein.    Of course, it couldn’t possibly be anything to do with the Mail columnist Sarah Vine suggesting in October that Branson was a bit too hands-on in his touchy-feely style with women. The accompanying 20 photos showed the bearded 67-year-old taking every photoshoot opportunity to apparently grab, squeeze or ogle the participating young females.

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In the new year, the Mail’s city editor Alex Brummer, formerly at the Guardian, dared to call Branson “a boastful billionaire” with no regard for his customers, as he was pictured gleefully ski-ing in Switzerland on the day his passengers were hit with a large increase in rail fares.

And of course the Mail is generally pro-Brexit, while Branson helped fund the Remain campaign. (Though he rails against “protectionism”, apparently unaware that it is a cornerstone of the EU.)

No, according to Virgin Trains this is all about the company’s “beliefs” on certain selected political issues.  Did you know train operating companies had political beliefs?

Will VT now perhaps turn its attention to scrapping wi-fi on its trains?  After all, that would prevent people using Facebook, Google or Amazon, in protest at their tax evasion and world/brain domination?

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Perhaps this virtue signalling by Branson is intended to distract attention from the shambles of the east coast franchise, on which I reported at the time.

There was a hard-fought battle for the East Coast.  The government rejected a bid by UK-based FirstGroup, and a joint bid by Eurostar and Keolis, both majority-owned by the French government. Coalition ministers had suddenly woken up to the fact that most of the rest of the network is now controlled by the French, Dutch or German governments, yet East Coast Trains owned by the UK government had not been allowed to make a bid despite having run the route very successfully, and profitably, for the previous five years.

East Coast

East Coast Trains was created to plug a gap left by National Express, the second private company to walk away from the franchise since it was created on privatisation 25 years ago.  Now there is a third – except that Virgin Trains and partner Stagecoach are being allowed to carry on as if they had not signed a contract to pay the government £3.3billion, promising to increase train capacities while reducing journey times.  Instead of being held to its bargain, Virgin is being bailed out by the taxpayer for the missing revenue it cannot deliver. The route has effectively been part-nationalised, again.  Branson welcomed it as a “practical solution” while shares in partner Stagecoach soared as the City calculated the benefit to its profits.

Virgin absurdly started boasting about new trains on the route back in 2015 – bigging up the Azuma which is scheduled to arrive only this year, paid for not by Virgin but by the government.

azuma

But how did Virgin end up running both the east and west coast routes, two of the three biggest and most lucrative franchises, giving them a monopoly over London-Scottish rail travel?

FirstGroup in 2012 won a 13-year contract to run the west coast route, but was ambushed by Branson, whose teams of lawyers went to court to stop the entire franchising process.  When the dust settled, who should be awarded the big west coast prize but Branson, given a three-year extension (and counting)  to the route it had already controlled since 1997.

When it came to the east coast route, FirstGroup was again in close contention along with the French, but again lost out.

I conducted regular interviews with Tim O’Toole, the American who used to run London Underground before becoming chief executive of FirstGroup, a publicly-listed Scottish company headquartered in Aberdeen. He pointed out that FirstGroup’s rail business was open to public scrutiny, whereas the bids made by Virgin and the French were not.  He suggested that Virgin had over-bid, bankrolled by the deep pockets of Branson’s private empire, creating an unlevel playing-field but also storing up potential trouble for the franchise.

OToole

He was right – but it’s no trouble for the £3billion man whose biggest worry was the wrecking of Necker, his luxury 74-acre private island, last September by Hurricane Maria.

Poor Branson had to hide in his wine cellar.   But now he faces another storm, as defenders of a free and diverse press accuse him of a sick combination of censorship and hypocrisy.

His posturing however is unlikely to convert the growing army of critics of our privately-run railway. Network Rail has already been returned to the public sector. The operating companies have been swallowed by European governments in a land grab.      Branson has been bailed out.   He had better watch out for Hurricane Jeremy.

Simon Bain is the author of ‘Railroaded’ a study of transport policy   (1986 – Faber & Faber)

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