Richard Branson has faced criticism after calling for a bailout for Virgin. With a personal wealth of $5.2 billion, and a permenant residency in a tax haven, many have challenged the fairness of giving the firm taxpayer money. Indeed, the shareholders of Virgin have profited greatly from the company over the years, and it only seems fair that those who have benefited during good times, should carry the company through the bad times. Indeed, we must consider what else this money could be used for: coronavirus tests, PPE for healthcare staff, bailing out smaller businesses who lack wealthy shareholders, and welfare payments for those unable to work due to the crisis. Bailouts for billionaires do not seem top of the list.
Where bailouts are needed, they must be used in a way to protect jobs and livelihoods. During the 2008 financial crisis, the public were shocked to find that bailouts for banks were being used to pay bonuses to wealthy executives. It is essential that any bailouts must come with strict conditions that direct funds where they are most needed, not to top up executives’ coffers.
The government has done the right thing by introducing grants to cover 80% of the wages of those unable to work during the crisis. Whereas bailouts might give companies the choice over paying workers or directing money elsewhere, this scheme ensures that people’s jobs are top of the agenda. This seems all too necessary when one observes how some companies have responded, such as Virgin, football clubs and Phillip Green’s fashion empire Arcadia, furloughing staff and asking them to take unpaid leave. Large companies frequently cannot be trusted to prioritise its employees, which means any government assistance must be attached to conditions which force companies to behave as they ought.
Bailouts are necessary to preserve people’s livelihoods through the crisis. But when it comes to companies with wealthy, tax evasive shareholders, perhaps the tax-payers’ pounds can be better spent elsewhere. The very ability for billionaires like Branson to come to exist shows severe flaws in how our society is organised, but the least he can do is dip into the pocket that has benefited from the company all these years to preserve its survival now.
Image: Emily Dowdle via CreativeCommons