Richard Branson calls for boost to small businesses

Sir Richard endorsed the Tories in February 2010

Sir Richard Branson has urged the government to promote economic growth by supporting small businesses.

The tycoon said it should consider reducing business rates and easing regulations hampering growth.

The government needed to encourage banks to lend to businesses, <link> <caption>Sir Richard told the Observer. </caption> <url href="http://www.guardian.co.uk/politics/2012/may/26/richard-branson-coalition-invest-businesses" platform="highweb"/> </link>

He said the government could consider policies such as a National Insurance holiday on hiring people for the first two years.

His criticism of government strategy was backed by two other leading businessmen - Sir Martin Sorrell, the chief executive of advertising group WPP and Luke Johnson, a former chairman of Channel 4 and Pizza Express.

Sir Richard said that to foster 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."

'No strategy'

Sir Richard added: "We need to encourage more entrepreneurship from the next generation - and focus on giving them the basic business and money-management skills as part of the schools curriculum."

Speaking to BBC Radio 4's The World This Weekend, meanwhile, Sir Richard also called on the government to "bring more flexibility into the workplace".

He said thousands of people who worked full-time "would love the opportunity of job-sharing or going part-time".

"But the companies won't let them because it costs more money to allow people to do that," he added.

"But if you took a little bit of the money from the dole and compensated the companies then I think hundreds of thousands more jobs could be created overnight."

Sir Richard endorsed the Tories in February 2010 by calling for public spending cuts to start that year, saying the UK's huge borrowing was a threat to the economy.

At the time, George Osborne, then shadow chancellor, said 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.

Sir Martin, who endorsed the Conservatives at the last general election, said the government "has no strategy".

"The government seem to have been blown off course by events, which is understandable, but they seem to be looking at the short term too much, which is a problem. Vince Cable [the business secretary] was right when he said what we need is a plan."

Mr Johnson added that the government's austerity plan was failing and called for "consistency and rational thinking".

"The latest quarterly figures on government expenditure show they haven't been cutting spending at all, so the programme of austerity is a bit of a myth to date."