Matt Hancock has refused to say whether or not Virgin Atlantic deserves a bailout from British taxpayers because of the coronavirus crisis.
The health secretary dodged the question when asked if the government is preparing to take equity shares on taxpayers’ behalf from the stricken airline, the majority of which is owned by billionaire Sir Richard Branson.
During the government’s daily COVID-19 briefing on Sunday, he was asked via video link by Financial Times journalist Jim Pickard if Branson’s Virgin Atlantic was a “worthy recipient” of taxpayer help given that Virgin Care previously sued the NHS.
In 2017, Virgin Care took legal action against NHS England and Surrey County Council after it failed in its bid to be awarded an £82m children’s community services contract across Surrey.
The case was settled out of court, with Virgin Care receiving a £328,000 payout, Surrey Live reported, resulting in criticism from politicians.
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Virgin responded by saying it has invested millions in its partnerships with the NHS.
Sir Richard’s Virgin Group owns 51% of Virgin Atlantic – the rest is held by US airline Delta.
According to the Financial Times, Virgin Atlantic is seeking a £500m bailout package of commercial loans and guarantees in an effort to survive the impact of the coronavirus pandemic.
The bailout is reportedly supported by Airbus, Rolls-Royce and Heathrow Airport.
Sky News reported that Branson has already ploughed $100m (£80m) into Virgin Atlantic from his Virgin Group in response to the crisis.
There have also been reports the government is considering a tax equity bailout to save large companies during the coronavirus pandemic.
This would mean the government buying shares in a company using taxpayers’ money.
Labour MP John McDonnell criticised Hancock’s refusal to answer the question, accusing him of “passing the buck”.
Jim Pickard asks perfectly straightforward question whether the Government is going to subsidise tax exile Richard Branson’s company, Hancock refuses to answer, passes the buck to Sunak, who isn’t present. This is why we need Parliament in operation online to hold gvt to account. https://t.co/v8uVRFD3LB— John McDonnell MP (@johnmcdonnellMP) April 5, 2020
A spokeswoman for the Virgin Group told Yahoo News UK: “Neither Virgin, nor Richard, have taken a penny out of the NHS, nor do we intend to.
“All monies received by Virgin Care have been reinvested back into paying for delivering services, including the salaries of doctors, nurses and allied health professionals, as well as being invested in transformation projects to improve the NHS.
“Virgin Group has invested more than £75m into Virgin Care, has not been paid any dividends and has pledged to reinvest any potential future dividends back into the business.”
Virgin Atlantic was criticised last month after it said it would ask staff to take eight weeks’ unpaid leave because of the coronavirus crisis.
A spokeswoman for the airline told Yahoo News UK: “We’re incredibly grateful to our people who took unprecedented collective action to support Virgin Atlantic in this time of crisis, opting into voluntary severance, sabbatical or unpaid leave spread across six months.
“Over 99% of our people chose one of these options to help the company preserve cash and protect jobs. Those who chose to take unpaid leave are now on furlough and are able to benefit from the chancellor’s Coronavirus Job Retention Scheme.”
Last week, a special Virgin Atlantic charter from Shanghai, China, delivered 350,000 items of medical supplies, including personal protective equipment such as masks and aprons, to the NHS.