Virgin bought Northern Rock at a snip of only £747m. The knighted, mild mannered business man has managed to buy "good bits" of the nationalised bank; namely the its 75 branches with one million customers and their £14billion of mortgages and £16billion of savings - Leaving the taxpayer £400m out of pocket.
It seems like a long time coming for Sir Richard Branson, as three years ago he failed to secure the bank in the midst of the original financial crisis as there was no guarantee that the taxpayer's money could not be repaid, leaving the government with no option but to bail the bank out and subsequently splitting it up in order to facilitate its selling to the private sector in the hope to recoup the taxpayer's money.
One could say that the government did have the option of just letting the bank fail; Lehman Brothers, a juggernaut in comparison to Northern Rock was allowed to fail. But the truth, letting the bank fail would have wiped out billions of pounds from the bank accounts of its hard working customers. So that would mean millions of customers would not have enough disposable income to spend; meaning less items are being sold by shops; less orders are made to factories; less items being needed to be manufactured; less staff needed; redundancies made; resulting in even more people with less disposable income. Our capitalist system is a little bit like running on a pool of custard, as soon as it stops, it will sink.
But Sir Branson's acquisition of the Rock still leaves the taxpayers short four hundred million pounds sterling! Equal to a loss of £13 per taxpayer.
The simple answer is: Tough.
Talking about what's just and what's fair when it comes to this deal is like using the rules of football to complain about a rugby try. The rules of business and capitalism are all about buying low, selling high; reducing cost and increasing sales and profit margins. It's a system that has perfected nature and Darwin's survival of the fittest. What kind of businessman would Sir Branson be if willingly took on parts of Northern Rock that would make him a loss?
As he told the Evening Standard:"We paid twice what a normal bank is worth, that's because it's worth more to us and what we can do with it under the Virgin name. We think we can get it into profit quickly. Hopefully the year after next."
To borrow a colloquial adage from Hip Hop: "Don't hate the player, hate the game"
We have been suckling at the teat of capitalism for decades. It has allowed many of us to live life-styles above our pay packet and it is not built on the foundations of charity and good will to others; but capitalising on any given situation, finding a niche and working out how to make the most money out of it.
This is the game of capitalism that we are all playing and Sir Richard Branson has been playing it very well; this deal surely not being the last. If we ever find ourselves angry at Virgin or Sir Branson, maybe we just need to start thinking of a new game to play.