Sir Richard Branson, founder and chairman of Virgin Group, said on Tuesday the company had lost about a third of its value since last week’s vote to leave the European Union.
Great! Hopefully the Brexit will spell the end of crony capitalists and politically connected billionaires like Branson who made a fortune out of railway privatization monopoly franchises, invested virtually nothing in their networks, creamed off all the profits and left the British public with a disastrous service?
What does Branson mean when he says the UK is heading to a disaster because of the Brexit vote? He and his quick buck company at the expense of the Brits is heading for a long overdue disaster, not the UK.
If Brexit cleans out pseudo businessmen like Branson and makes way for real entrepreneurs offering real services that are competitive world wide, it will be a good thing.
Read the Economist on the railway privatization scam..
“The scandal of rail in Britain is the gulf between the opulence of the rail companies and the oppression of their passengers. Anyone who has had the misfortune to board a train since the network was broken into its four main component parts of track, rolling stock, maintenance and train operators (such as Virgin Rail and First Great Western), and sold in almost 100 pieces in 1995-97, has suffered from shoddy service and reliability.
The network is not about to improve. The promised investment of £27 billion ($43 billion) by Railtrack, which owns the track and the stations, is a sham—almost two-thirds of it is routine maintenance. Unless the incentives in the system change to make investment worthwhile, it will stay a sham.
Yet the industry makes huge amounts of money. From the accounts of the main companies formed from the old British Rail, The Economist has calculated that these components of BR made total profits of £1.1 billion in the year to March 31st 1998 (see table). That equals 19% of the industry’s total revenues, including subsidies.
Britain’s best-known entrepreneur, Richard Branson, an inveterate risk-taker, has a 15-year franchise for the west coast main-line service between London, Manchester and Glasgow, which runs on some of the busiest and most dilapidated track in Britain. Mr Branson’s service became a national joke last October. Virgin trains carrying ministers to the Labour Party conference in Blackpool arrived hours late. The bluff Mr Prescott poured ridicule on Mr Branson at the end of last year’s party conference. Mr Branson was so bewildered that he later publicly admitted that Virgin Rail had “fucked up”. Even when Mr Branson pleads that the fault lies with the service he took over, such excuses do nothing to protect the Virgin brand.”