Should we listen to Richard Branson on the deficit?

Richard Branson has called for the deficit to be slashed. But should we listen to a tax avoider and evader?

The Evening Standard is reporting that Richard Branson has given the Conservative’s a “huge boost” by calling for the deficit to be slashed. But in this debate should we be listening to a man reported to be a tax avoider?

Branson says today:

“I believe the UK’s record budget deficit does pose a serious risk to our recovery…

“We are going to have to cut our spending and I agree with the 20 leading economists who said we need to start this year. The next government, whatever party that is, must set out a plan to reduce the bulk of the deficit over a Parliament by cutting wasteful spending and must not put off those tough decisions to next year.”

Not just spending cuts, Mr Branson, greater tax revenues will also help close the deficit – including reducing tax avoidance. But Branson has form.

According to Tom Bower, Branson uses “tax-free offshore trusts” while This is Money have reported that:

“British members of the super-rich who live here can minimise their tax bill through trusts in tax havens such as the Channel Islands or British Virgin Islands. If the assets owned by the trust are not held in the name of the individual and any income or capital gains is not returned to Britain, these are usually beyond the reach of the taxman. Virgin founder Sir Richard Branson uses offshore trusts, as does Formula One billionaire Bernie Ecclestone.”

Indeed, during the debate over a possible takeover of Northern Rock, Vince Cable pointed out Branson’s previous record on tax evasion:

“I don’t want to run the man down. But it has now been pointed out that Mr Branson does have a criminal record for tax evasion. Therefore there is good reason to believe that the people who have to stump up the money for his consortium may well not regard him as a fit and proper person to run a public company – let alone a bank and let alone be responsible for £30bn of public money.”

In any case, Branson’s wisdom on economic policy is questionable. In 2005, he said:

“One way of increasing government spending without increasing the tax burden on the poor would be to abolish income tax altogether in the long term. I really think you would raise more money by a very heavy tax on luxury goods, leaving food, water and medicines tax-free, of course.”

In 2010-11, income tax will bring in £144.7 billion. By comparison, VAT at the restored rate of 17.5 per cent, will contribute 74.2 billion. So how should we make up the shortfall, Mr Branson? 50 per cent rates of VAT on that Virgin Cola?

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40 Responses to “Should we listen to Richard Branson on the deficit?”

  1. uberVU - social comments

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    This post was mentioned on Twitter by leftfootfwd: Should we listen to tax avoider Richard Branson on the deficit?

  2. Mark

    One problem is that Labour have been appointing the likes of Fred Goodwin as their advisors.

    The more saddening aspect is that Richard Branson’s opinion is seen as a worthy endorsement of the Tories and something to attack for Labour. It shows how empty the election campaign is going to be, at times the two main parties only differ in their celebrity endorsements.

  3. Billy Blofeld

    Surely now it is only hard core Labour activists and the ignorant who can’t see how much damage Gordon has inflicted on the country?

  4. Fony Blair

    Playing the man not the ball again.

    Shock horror – successful international company puts money into off shore accounts. If it’s earned abroad why not? And if it isn’t and he’s not breaking the law then why not? If Labour have a problem with it then change the law!! (I also point out MP’s Labout included who flipped homes to AVOID CGT!)

    Also let’s not forget how much tax is paid as a result of Richard Branson….Income tax from employees, VAT from services, airline taxes…I’m sure the list is endless.

    Typical Left Wingers…..not focussing on the big picture (fixing this bloody mess in the country) but rather complaining about a few million here or there off shore from a private company. I bet you lot would rather see succesful companies fail.

    Also the more you tax people the more they look to avoid it….share the burden don’t focus on a few high earners to make yourselves feel better.

    Every time I pop by on this blog it’s just comical!! I do hope none of you ever end up as MP’s voting on economkic policies…..but sadly I fear you are a lot of wannabes who might end up doing just that.

  5. Fony Blair

    Oh and whilst I’m no defender of Virgin I think if you read his autobiography you will find the tax evasion charge came about through importing records and not paying hte VAT on them when he was aged 17 or 18 basically running a mail order business. He has apologised and said it has taught him to follow the law in business from that point forward.

    We all make mistakes eh Will? Spliff anyone??

    If I had a choice between Branson running a bank (he already set up Virgin Money and the award winning one account) and Vince Cable it certainly wouldn’t be Mr Mansion Tax.

    As for you comment on VAT….I’m sure as an economic illiterate you would suggest 50% VAT. As for Income Tax read up on the laffer curve.

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