Incompetent Labour is fighting one of Britain's best entrepreneurs

Telegraph

a day ago

It is meant to be pushing for 'growth, growth, growth'. In the wake of the rebellion over welfare cuts, and with Chancellor Rachel Reeves reduced to tears last week in the House of Commons as she contemplated the bleak prospects for the British economy, the Government is more desperate than ever to stimulate some kind of expansion.
So why is one of the UK's best entrepreneurs being prevented from setting up a new business?
Sir Richard Branson has this week been stopped from reviving Virgin Trains. In reality, it is only smart entrepreneurs that actually grow the economy – and if the Government doesn't understand this, then there is little chance of getting the country moving again.
Virgin Trains may well stir mixed memories for many readers. From rail privatisation in 1997 up until 2019, it ran the trains on the main West Coast routes, from London to Birmingham, Manchester, Liverpool, and up to Edinburgh and Glasgow.
It brought some much-needed design skills to the carriages, and spruced up the marketing. While the trains were not always on time, it would be hard to argue they were any worse than any of their rivals, and possibly better.
Sir Richard now wants to bring the operation back, with services from London Euston to Liverpool, Birmingham and Preston, adding an extra 5m seats to the routes.
Here's the problem, however. The Office of Rail and Road, the regulator that controls the network, has this week blocked the application.
That decision came after ministers and senior Whitehall officials lobbied against the bid, on the grounds that the service would deprive Labour's new nationalised rail service of crucial ticket revenue.
It was not just Virgin. Other potential operators were blocked as well. The routes will be left with Avanti, which, as it happens, was Britain's worst rail operator in the first quarter of the year, with 60pc of its trains running late, and 6pc cancelled completely.
Seriously? Sure, Sir Richard is a maverick. Not everything he tries works. But he has a great record of building businesses, from the original Virgin record label, to the Virgin Atlantic airline, to the dozens of other businesses he has spun off the main brand over the last 40 years.
Indeed, Virgin increased annual passenger numbers on the West Coast franchise from 8m a year to 42m during its 22 years of operating the route. But no. It turns out that neither the Government nor the regulator like the sound of extra competition, or more choice for passengers.
'Anyone who remembers British Rail would rather forget it,' said Virgin after the decision was announced. 'Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer.'
That is very true. We can probably forget about Virgin's bid to compete with Eurostar in running trains through the Channel Tunnel, and on to destinations across the rest of the Continent.
Even though ludicrously high prices surely demonstrate that service could desperately use some competition, it is now clear the Government does not approve of that sort of thing. Tragically, it probably won't happen, driving people onto cheaper planes instead.
Indeed, we already have a glimpse of what the railway system will look like under Labour.
Now that we have Great British Railways, complete with rail replacement buses on its opening day of service, the Government will be less interested in choice and in customer service.
It will mainly be worried about protecting the state-owned incumbent, and if that means higher fares, and fewer trains, with fewer services on board, then the passengers can lump it.
So long as they are not offered any alternatives – and it doesn't look as if they will be – then their interests don't count. It will be harder and harder for rivals, until eventually we end up with a single state-owned train company, and one dominated by the trade unions. We will be right back in the 1970s.
There is a bigger point at stake here than just one rail operator.
We see very little sign of the company backing the UK's best entrepreneurs. Sir Jim Ratcliffe's Ineos was hit with a huge levy even after it upgraded its plant in Hull to run on hydrogen gas.
Likewise, we have seen very little sign of backing for entrepreneurs such as Sir James Dyson, who recently argued that Labour's 'war on aspiration' was driving talent out of the country, or Sir Tim Martin, the founder of JD Wetherspoon, who is now looking at setting up pubs abroad.
Meanwhile, it is no better among the younger emerging tech start-ups. Guillaume Pousaz, the founder of Checkout, has left for Monaco after losing his non-dom tax status, and Wise, a giant in online finance and payments, has decided to move its listing from London to New York.
The list goes on. There is absolutely no sign that the Government is willing to make any concessions to people who start a business and make a success of it.
What happens to the trains to Preston, and whether there is some extra competition on the route, is not the most crucial issue facing the county. It is what it reveals about the mindset of ministers and regulators that is genuinely worrying.
After all, Branson is one of the great entrepreneurs of the last few decades, a man who has brought his restless energy to sector after sector, built a hugely valuable brand, and proved time and time again that he can make business work for customers. If we are not willing to welcome him back into the rail system, then it is hard to see how it can ever improve.
The blunt truth is this. It is entrepreneurs who create growth, not the Government. Until Labour works that out, the economy will remain trapped permanently in stagnation.