Aditya Chakrabortty claims that Virgin operates in businesses "sheltered from too much competition, pulls subsidies out of taxpayers and then cashes out" and has relied on this to be successful (I once called Richard Branson a carpetbagger. The truth is, he is even more subsidy-hungry than I thought, 11 June).
In fact, we have always worked in competitive industries, battling with larger rivals and with no subsidies. Neither is Virgin Money a "frontman for the serious money of America or Dubai": we remain its largest shareholder, with almost 50% of the equity.
Chakrabortty claims "the only way Branson and the vast majority of train barons make their profits is through handouts from the taxpayer". This misrepresents why subsidies were paid in the early years of the west coast franchise, when it was heavily loss-making and costing the taxpayer a fortune. The subsidies were calculated by government to cover losses in those early years and ensure a regular service could be maintained while the track was repaired and before we could start turning around the franchise.
From 1997 until 2004, Virgin Rail's shareholders took no dividend. Instead we worked to create a reliable service, in spite of the collapse of Railtrack and huge delays in the infrastructure work, which severely slowed the turnaround.
Chakrabortty confuses with his claims of "the service's upgrade (worth around £9bn, and paid for by the public), and the fleet of Pendolino trains (again, largely subsidised by the government)". Of the £9bn spent on the line, only £2bn was for upgrade work. The remaining £7bn was spent to renew a railway that had no investment since the 1960s and needed to be made safe. Contrary to the claim that the Pendolinos were subsidised and "most of the improvements were subbed by taxpayers", the train fleet has been 100% privately financed and we pay Angel Trains and Alstom more than £200m each year to lease and maintain one of the most modern fleets in Europe.
We now carry 31 million customers a year, compared to just 13 million when we took over the franchise in 1997. This has created great benefits for the Midlands, north-west and Scotland as well as government. In the last five years, premium payments to government have been some £500m, in contrast to Chakrabortty's claim we have only paid agreed amounts in the last two years.
For over 15 years we and our partners have created a franchise so successful that last year's bids for the west coast were offering premium payments to government of more than £5bn. This is a big turnaround from the liability we inherited and in that time we and our partners have taken total dividends of £499m, while the government and the taxpayer have seen a rise in revenues and a massive increase in assets values.
It is wrong to claim that with "new rolling stock, a more frequent service and a superfast line that whisked passengers from London to Manchester in just two hours … the company couldn't help but pull in the customers". We introduced the new rolling stock, and helped to deliver the more frequent service and "the super-fast line". Most were sceptical about our plan, dubbing it "mission impossible".
Network Rail has cut the overall track access charges from £3bn to around £1.5bn a year, but these are set by the government, and the west coast charges reflect a reduction in costs after the renewal and upgrade work and other efficiencies it has made.
Chakrabortty says: "Private companies who don't make a profit can simply walk away, dumping their service back in public hands." By contrast we have stuck with the task despite the dreadful performance by Railtrack. Thanks to the hard work of our 3,000 staff, we have transformed this once-failing franchise into the success it is and proved the doubters wrong.
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