after the purchase was complete, the sound of footsteps alerted Caroline and Rob Gold to the fact that they had a late-night visitor to their boat. It was Richard Branson, pale, shaken and extremely distressed, and he was in an appalling state. At first, he could say nothing but ‘Oh no, oh no.’ Only gradually did his story come out.
Rob Gold’s younger sister was married at the time to a man called Andy, who owned a Transit van. Branson had received an order to send some records to Belgium, and had asked Andy to deliver his consignment in his van. Somehow, in the course of the deliveries, the two men had discovered a loophole in the customs procedures at Dover. When you passed the customs post, your papers would be stamped so that you would be able to prove that the records had been exported and thus reclaim the purchase tax you had already paid on them. But there seemed to be no proper arrangements for checking the records, or for making sure that they really had been exported.
Here, surely, was an opportunity for a young businessman. Instead of exporting the records that your documents showed you were carrying, why couldn’t you fill in the paperwork and reclaim the tax as normal, but sell the ‘exported’ records in London and instead take to Belgium some old deleted records, picked up for a song from a company that was about to throw them away anyway? Come to think of it why bother to go to Belgium? The system at Dover seemed to be based entirely on trust; nobody was there to see if you simply drove around the docks and then came back to London without even getting on to the boat. Better still, there was no need even to go to the trouble of buying the old records; to a dozy Dover customs officer, a vanful of record sleeves with nothing in them would do just as well.
As Branson made trip after trip, revelling in the ease with which he was increasing the profits of his mail-order business, he never stopped to consider that the customs men might be less dim-witted than they seemed. But they were. The Transit van had been tailed; and the records he had been selling in London instead of exporting had been marked with an ‘E’ in fluorescent ink. An anonymous tip-off gave Branson a few hours in which to try to hide the evidence. But he was arrested at his houseboat, taken to Dover, and charged with producing fraudulent paperwork under the Customs & Excise Act 1952. The following morning, after a night in the cells, he was committed for trial. His mother, to whom the tearful Branson had relayed the news over the telephone the previous evening, came up by the morning train and offered the family house as surety for his £30,000 bail.
To his enormous relief, Branson discovered over the course of the coming three months that dealing with Her Majesty’s Customs & Excise was almost like a business negotiation. Although the maximum penalty for what he had done was two years’ imprisonment, the investigators seemed to have no special desire to send Branson to gaol. True to their occupations as taxmen, what they wanted instead was money. Before the case came to trial, therefore, Branson and the customs settled their little dispute as follows: he would make an immediate down payment of £15,000, and would then pay taxes, duties and charges to the tune of another £38,000 over the next three years. Given the size of Virgin at the time, these were daunting sums of money to find. But he would have no criminal record, and he was free to go back to his mail-order business.
When they heard the story on the night after Branson’s appearance in court at Dover, Caroline and Rob Gold were sympathetic. But they were hardly surprised. Some weeks earlier, Richard Branson had discovered that Caroline’s father, Francis Rodgers, was a shipping agent who had just set up a containerized freight business. He had approached the older man with a request for advice and for a place to store some records. Caroline was not present at the conversation. But Francis Rodgers left her in no doubt: he had smelt a rat, and wanted nothing at all to do with the scheme. The customs scam was no adolescent mistake, as the investigators might have inferred from Branson’s earnestness and youthful enthusiasm; it was a deliberate and quite knowing attempt to break the law and get away with it.
Luckily for Branson, his neighbours on the canal saw no reason to be judgemental on the matter. More luckily still, the Customs & Excise never found out about Branson’s approach to Francis Rodgers. By the time they had begun to investigate the customs fraud, Caroline Gold had already given up her job to have children. She was no longer an employee of Richard Branson’s, so nobody ever thought to interview her.
‘NIK AND RICHARD,’ Simon Draper would later recall, ‘had no particular feel for the music business. They found themselves in it by accident. They were public-school boys who had dropped out of education.’
While the two budding entrepreneurs did what they were good at – Richard sweet-talking the press and striking daring deals, the more introverted Nik reading his management magazines and trying to think of ways that Virgin could cut costs – they needed some real musical expertise. Steve Lewis, for all his encyclopaedic knowledge of Motown, was at first only a part-timer, he was also still at school. Tony Mellor, a former trade union official, had been in charge of buying stock for the mail-order company and the shops; but he soon disappeared to America, never to be seen again. So there was a vacuum for Draper to step into. After Branson’s brush with the Customs, it had become clear that Branson’s plan to start the record label would have to wait a little. In the meantime, Simon Draper would become the company’s record buyer.
Over the next two years, Draper’s work gave him an invaluable insight into the sort of music that would sell. Although the record shops and the mail-order business were not profitable, they were a goldmine of information about the likely future habits of the record-buying public, for the tastes of the Virgin clientele were more adventurous than those of the average teenager. For instance, the mail-order company received a growing number of requests for records by an obscure German band called Tangerine Dream, which Draper fulfilled by finding out where the records were produced and then buying a job lot of them. So it required no great insight to see that the band might be worth trying to acquire for the new Virgin label. ‘When we signed Tangerine Dream in 1974,’ said Draper, ‘it looked like clever stuff. But we knew it was going to sell.’ It did – by the million.
The great coup of Virgin’s early years came via a different route. While the Manor was preparing for the first formal booking of its recording studio in 1971, an obscure band was allowed to come and rehearse there. During a quiet moment, one of its members produced from his pocket a demo tape that he had made and handed it over to Tom Newman, who was in charge of the studios. This was an occurrence that would become tiresomely familiar to anyone involved in the record business. But Newman listened to the tape, and he liked it; so did the other Virgin people he played it to. A few weeks later, he came back to the guitarist and told him that he should try and get a recording contract.
Simon Draper heard the tape later that year, by which time the young guitarist had been turned down by almost every record company in London, and pronounced it ‘incredible’. He took a copy home to his flat, and played it time and again to anyone who would listen to it. The recording elicited an extraordinary reaction. When Virgin Records was ready to start its label, Draper decided, he would tell Richard to sign up Mike Oldfield.
Oldfield was an unlikely pop star. Son of an Essex doctor, born in Reading, he had an unhappy childhood; his mother drank too much and was prone to roller-coaster changes of mood. By the end of his teens, it was clear that Mike, too, was unable to face life as an independent adult. He was painfully shy, and was as lacking in self-confidence as Richard Branson was full of it. Women were attracted to him, not so much for the physical charms of his underdeveloped body and adolescent beard as for his air of vulnerability and for his bouts of depression from which only constant reassurance and attention could redeem him. Yet Oldfield was by no means an inadequate musician. He had been playing guitar professionally for five years, and had made two albums with the Whole World, Kevin Ayers’s group. He had made the demo tape that
