Billionaire tycoon Richard Branson has criticised the Government for failing to promote economic growth.

The Virgin founder, who backed the Tories in the run-up to the 2010 general election, was one of several senior business figures who told the Observer that the coalition needed a plan to stimulate the economy.

Sir Richard said the Government needed to provide "action to back the rhetoric", boosting support for small and medium-sized businesses and promoting entrepreneurialism to reduce unemployment and boost growth.

"To get that growth, we need to get behind the small and medium-sized businesses that are the engines of any healthy economy," he told the newspaper.

"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."

In February 2010 Sir Richard boosted the Tories by calling for public spending cuts to start that year.

The high-profile entrepreneur said the UK's huge borrowing was a "serious risk" to the UK economy and action could not be put off.

Speaking to the Evening Standard he said: "The next government, whatever party that is, must set out a plan to reduce the bulk of the deficit over a parliament by cutting wasteful spending and must not put off those tough decisions to next year.

"These factors threaten to undermine the confidence of international and UK business, UK consumers and the global financial markets. That could cost jobs and reduce investment in Britain.

"We must send a clear signal that we have the issues in hand and a clear strategy for UK plc."

George Osborne, then shadow chancellor, said at the time that Sir Richard's support was "hugely welcome".

"As Britain's best known entrepreneur, he knows more about creating jobs and building an economic recovery than the entire Labour Cabinet put together," he added.

But Sir Richard told the Observer today that the Government now needed to focus on making it easier to set up a business in the UK by reducing business rates and regulation on small and start-up companies.

He suggested politicians look at policies including a national insurance holiday on hiring people for the first two years and introduce school lessons on "basic business and money-management skills" to create a new generation of business owners.

He was backed by two other leading businessmen.

Sir Martin Sorrell, the chief executive of advertising group WPP , told the Observer that the Government had been "blown off course" and "seem to be looking at the short term too much, which is a problem".

Luke Johnson, a former chairman of Channel 4 and Pizza Express, told the paper that the Government needed to show more "consistency and rational thinking".

PA