Page last updated at 10:58 GMT, Saturday, 21 February 2009

Branson opposes wider bail-outs


Branson on banks and bail-out plans

Virgin Group boss Sir Richard Branson has backed state bail-outs for failing banks but said similar rescues should not be offered to other industries.

He said the government should make sure banks kept small businesses afloat to prevent the recession having a "horrendous knock-on effect".

But "companies need to stand on their own two feet, and the weak ones need to go to the wall", Sir Richard said.

He said the downturn could be the worst in Virgin Atlantic's 25 years.

Sir Richard told BBC News that there had been four major downturns in the airline's lifetime, adding: "I suspect this is the worst downturn that we have seen."

"Britain is one of the worst-affected countries in the world," he said.

"I think that the government are right in trying to make sure that the banks are secure.

"And they have got to actually go even further to make sure that those banks keep middle-sized and small companies afloat, so that it [the recession] doesn't have a horrendous knock-on effect.

"I think they are doing the best to do that."

The government has pumped billions of pounds into failing UK banks.

Sir Richard Branson
Up to 600 Virgin Atlantic jobs are at risk due to the recession
But Sir Richard said he did not think there should be similar rescues for other industries.

"I don't think they [the government] should go further.

"I think other companies need to stand on their own two feet, and the weak ones need to go to the wall."

US President Barack Obama had made a mistake by bailing out more than banks, Sir Richard said.

He said that billions of dollars issued to US carmakers could have funded a revolution in the industry, setting up electric car producers.

"If they are going to spend that sort of money, do it to try to tackle climate change and start afresh."

F1 role

Sir Richard also suggested Virgin could be interested in a role in Formula One motor racing.

The UK-based Honda team, put up for sale in December, has said the Virgin Group is one of several potential buyers.

"If we are in discussions I wouldn't be allowed to say it because there would be some kind of clause which would prohibit me talking about it," Sir Richard said.

"I love Grand Prix," he added.

"I think if Bernie Ecclestone can make it more cost-effective for the likes of Virgin brand to come into that sport, and if he can champion clean motor car racing - which is possible to do by making sure all the cars run on clean fuels - then at some stage we might be interested in getting involved."

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