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Flying the flag for British business

Submitted by on 23 Nov 2010 – 12:23

By Sir Richard Branson, Chairman of Virgin Group

Imagine a British business that turns over £2 billion pounds and employs over 7,500 people. A business whose supply chain stretches across the UK, including manufacturers at the forefront of ground-breaking technological developments. A business committed to reducing its environmental impact and providing jobs for highly-skilled engineers and operational staff. A business that receives no public money and pays for the infrastructure it uses. An exporter that generates a third of its revenue from overseas sales and carries over 200,000 tonnes of cargo around the world. You don’t need much imagination because that business is Virgin Atlantic.

We don’t just contribute to the economy through the tax we pay, the employment we provide, and the supply chain we support. By serving the world’s established and emerging business markets (including New York, Tokyo, Shanghai, Delhi and Accra) we increase business connectivity, facilitating international trade and foreign investment. We also sustain inbound tourism – an industry worth £16.5bn annually – by bringing over 750,000 tourists to the UK each year.

The Government seeks a private sector recovery and wants to make it clear that Britain is open for business. Virgin Atlantic is helping to make that happen.

As a competitive private business in an industry that doesn’t receive government subsidies, we did not ask for public spending when the economy was booming. We are certainly not calling for any special favours now. The Government should use these straitened times as an opportunity to re-appraise the way it looks at our industry. Virgin Atlantic and our British competitors are revenue raisers for the UK. We are the engines and catalysts of the economic recovery. We may fly planes, but we are businesses first and airlines second. I want the Government to treat us as great British exporters and businesses.

It’s no secret that Virgin Atlantic likes to compete. It’s in our DNA. We don’t just compete with the likes of BA; we operate in a truly international marketplace. The results of competition over the last twenty six years have been greater consumer choice, lower prices and a significantly improved passenger experience. We’re used to being the underdog, but the Government should now concentrate its efforts on creating a more level playing field to allow fair competition to thrive.

If I were running transport policy the first area I would concentrate on is regulation. We operate, understandably, in a heavily regulated environment. We don’t quibble with much of the regulation, but we do care that different countries impose very different regimes. For example, we spent tens of millions meeting our obligations as an EU airline under European regulation 261 during the recent volcanic ash shutdown. However in contrast, our US, Gulf and other international rivals were under no such obligation to compensate their stranded passengers and this is just one example of the competitive distortions created by an uneven regulatory framework.

Secondly, taxation is a huge issue that cannot be ignored. The Government is rightly reducing corporation tax to ensure Britain is internationally competitive, but the very same rationale applies to air passenger taxes. The UK taxes passengers more than any other country in the G20 and the EU. Furthermore, I am very concerned that by taxing transfer passengers for the first time and creating strong incentives to fly long-haul via a Continental hub, replacing Air Passenger Duty with a Per Plane Duty would damage our ability to compete with our international rivals.

I believe in British business. We have the people, the skills and the innovation to compete internationally and deliver the private sector recovery. It’s the Government’s role to let us get on with the job.