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Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST: My next guest this morning is a man who's had his fair share of success, to put it mildly. His companies range from airlines to weddings, to financial services and mobile phones, and in a survey today there's more news, but let's first of all hear something about him.

DAVID FROST: Thank you very much indeed. Well today, as we mentioned, the Mail on Sunday have got the Rich Report, and Richard, you have rocketed from number five to number four. You're up.

RICHARD BRANSON: Well that's nice to hear anyway.

DAVID FROST: Up, up in the charts, a bullet. Two point three billion you've got here, is that about right?

RICHARD BRANSON: I have no idea. I like to think that any, anything we have we plough into new ventures, so as long as we don't sell those ventures we'll never quite know what it's worth.

DAVID FROST: Do you think that's too high or too low, roughly?

RICHARD BRANSON: I, I suspect it's, I suspect it's, they normally, those things are on the high side so um, but as I say, um, oh - anyway let's

DAVID FROST: Well the other thing was you're a more inspirational figure than Mother Teresa, one report - and Jesus Christ, another report - another poll said.

RICHARD BRANSON: Mm. I think it rather depends who you ask that question of.

DAVID FROST: Yes, if you ask the question of Tom Bower you get a different answer.

RICHARD BRANSON: That's right.

DAVID FROST: Are you suing him or not?

RICHARD BRANSON: Um, I'm not suing him, um, on, on the the thing that we have, have taken issue with was some things that he said about our motives and the lottery and at the time I felt there was a danger it would damage um our bid on the lottery and so uh we asked for an apology and we haven't had it yet.

DAVID FROST: So you'll take action if you don't get it.

RICHARD BRANSON: Yes, I think it's possible but I mean we have taken action and um all I'd like is a simple letter of an apology.

DAVID FROST: And what about the lottery itself? You considered when the verdict came in - the sad verdict from your point of view came in - that you might go for a judicial review or something like that. Why did you decide not to do that? Had you just had enough of it?

RICHARD BRANSON: Basically yes. I think, I think that we felt that if we had gone for a judicial review, although we may have won the judicial review, it would then have gone back to the commissioners who'd handed it over to Camelot and that the process, you know, could have dragged on indefinitely and that ultimately good causes may have suffered. And therefore we felt that, you know, the best thing was to call it a day and move on to other things and possibly, you know, maybe to pose the question to the various parties as they're drawing up their election manifestos, um, do they want to try to reflect in future years uh what the public want, the public overwhelmingly want to see the lottery run with all the profits going to good causes and I suspect they would be wise to consider that, as the Labour Party did in their last election manifesto.

DAVID FROST: But they, they didn't live up to their words in the last manifesto.

RICHARD BRANSON: They made, I think, some major mistakes. I think that having categorically said that they would introduce a lottery where all the profits went to good causes they should have followed through - and maybe they should have said to Camelot, 'Look if you're going to continue, make sure that you hand over all your profits to good causes.' Or, how they should have perhaps appointed somebody who was willing to run it on that basis. I'm sure in retrospect they would like to have done it differently, I mean it did really turn into a terrible mess.

DAVID FROST: And what went wrong, because it was tantalising almost there, wasn't it? Almost yours - what went wrong? Were they pressured do you think?

RICHARD BRANSON: In, in - in July we were a week from, a week from - no sorry a day, an hour, from signing the final contracts which would have meant the People's Lottery would have been running it, and Camelot um won their action to bring them back into the game. And I think, in a sense, the clock ran down. I think the Lottery Commission, I think were, were frightened about change. All their, all their statistics showed that something like a billion pounds extra would have gone to good causes, that our game plan was better, but I think they just, they just were unnerved by the whole process.

DAVID FROST: Would you be tempted either to challenge next time, or have you looked at the possibility of doing a rival lottery - you have looked at it, and decided against it?

RICHARD BRANSON: Well the law, the law at the moment doesn't really enable a rival lottery to be set up and in some ways I think most likely the better way is to have, to have one lottery, and let it be a monopoly, but make sure that in future years all the profits go to good causes, and that, you know, if, if the Government were to encourage competition, I'm sure there would be those people who would get up and compete. I think, I think from our own point of view we'd most likely like to call that an end and move on to other things now.

DAVID FROST: And in terms of other things, the predictions this week on your other vital current issue going on - leaving aside what's happening in the other 169 companies or whatever - but there are predictions this weekend that GNER may hold on to their east coast franchise. Is that what you hear?

RICHARD BRANSON: Well I think it's important for government - if that was the case - I think it's important the government actually inform the contestants in these bids first and that one doesn't read about these things in the press. And so I think, you know, what I'd like to hope, hope, is that, that any rumours like that are unfounded. I mean what we've done with the west coast is we've invested enormously in new equipment and from May every single week a new train arrives, and for the next two years people will start seeing an enormous improvement in, in the performance of the west coast and cross country trains, and it really will be incredibly exciting - the trains are beautiful and we will have delivered all the investment that was said. On the east coast, we've come forward with a very radical plan for the east coast, it's a, it's a brand new line up alongside the current line; it will be trains which will be as fast as the French trains, 220 miles an hour; trains, we'll be able to bring direct services to places like Sunderland that don't have direct services, and I think that we've come up with a radical approach and enormous investment that is needed for the east coast because, you know, capacity is almost at an end on the east coast. And we also believe it will save the taxpayer, you know, a billion or a billion and a half pounds. So we're still hopeful of winning, and we're obviously hopeful that, that the rumours that have appeared in the press over the weekend are not true.

DAVID FROST: The problem, I suppose is, in a way, that you are combating GNER who are one of the most popular of the current rail operators, they're not somebody who has been failing demonstrably.

RICHARD BRANSON: I think that, and what you have to do is look at the state of the west coast versus the east coast. We took over the west coast, which was 30 year old track, 30 year old trains, that was almost completely run, run down and not, not performing. The east coast was ten year old, ten year old, ten year old - sorry ten year old track, ten year old trains - and was really quite a modern railway network, and yet Chris Green and the team at Virgin Trains actually got the performance of the west coast ahead of GNER in the last six months running up to Hatfield. So, so I think that performance-wise, that with, with equipment that was not working, the Virgin team have done extremely well. I think that where Virgin, I think, scores is that, is as far as big investment programmes is something we have experience on and we are delivering on. Whereas I think that GNER have not got that experience.

DAVID FROST: But lots of people say that - and you must worry about it too - that the reputation so far, before May and so on - of Virgin Trains, that it's damaged, to some extent, the Virgin brand. Do you think that's true?

RICHARD BRANSON: It's possible but I, but I think, you know, we saw a vision three years ago that we could transform the rail network in this country, and we saw a vision that we could bring the expertise that we've brought with Virgin Atlantic to trains. Two years from now, which will be five years after we've taken over the west coast and cross country, we will have created the best rail network in Europe here in, here in Britain. And it takes, it takes, it takes time. And I think that most people, I think, realise that Virgin are willing to take risks and that's one of the reasons that the Virgin brand is, is, you know, world known, and world respected, because we do take risks. And we took a risk with it, um, with trains - it's a risk that we, you know, that we will deliver. And I think that when people look back in five years time at, you know, what did, what did Virgin do for this country, I think what we've done - what we will have done for the train network in this country, will be one of the most important things. .

DAVID FROST: Do you think the Blair government has been good for business?

RICHARD BRANSON: I think that, I think that there are occasions where I feel that they ought to be taking bolder, you know, bolder risks. You know, I think, you know obviously it's not, it's nothing to do with business, but I think the lottery was one where, you know, the public wanted something and they, they should have been bolder and they, they should have made sure that they delivered what they'd promised in the election manifesto. If they do not let the vision that we've got for the east coast mainline take place and they, and they, you know, don't really deliver the, the strategy that is needed, I think it will be very sad and I think it will be a great mistake because, you know, if you turn the clock forward ten years, you need the big picture vision, and that's what I think that we can deliver

DAVID FROST: Thank you very much Richard.



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