Richard Branson, whose support for Tory economic plans was enthusiastically trumpeted by George Osborne in the runup to the last general election, has dramatically turned on the coalition for failing to promote growth. Britain’s most famous business tycoon said ministers’ rhetoric on reinvigorating the economy had not been matched by action. He demanded that the government show more support for small and medium businesses which were “the engines of any healthy economy”. In an outspoken intervention, the founder and chairman of the Virgin Group called for a renewed focus from ministers on bringing unemployment down and promoting the country’s entrepreneurial spirit. Branson told the Observer: “To get that growth, we need to get behind the small and medium-sized businesses that are the engines of any healthy economy. They need investment and finance, and that comes from the big banks. The politicians talk of encouraging lending; we need action to match that rhetoric.” The comments come as Whitehall sources said former investment banker David Laws, who was forced to resign as chief secretary to the Treasury over an expenses scandal two years ago, is now being lined up to come back into the government in an imminent reshuffle to beef up its economic credentials.

As a minister in the Cabinet Office the Liberal Democrat MP would sit in on cabinet meetings and have a “roving role” in government. It is hoped he will be able to drive forward policies to drag Britain’s economy out of the doldrums.