Ministers have “pinched” £300m of funding from small businesses at the same time as vowing to support the sector and bring the banks into line, the Tories claimed on Thursday.

Lord Mandelson, the business secretary, on Thursday pledged he was “on the side of the entrepreneur and always will be”. In a speech to a regeneration conference in Manchester, Lord Mandelson marked his “return to the department I love” by hailing the role of the regional development agencies. “Without them, the regional economies would be defenceless in the face of the [global economic] storm,” he asserted.