David Cameron was forced on to the defensive over his economic strategy yesterday, as a senior Tory admitted that criticism of George Osborne, the shadow chancellor, had now become "fashionable".

The Conservative leader focused on small-scale measures to help small businesses, asserting these would be "a lot more powerful" than the government's spending plans. He vowed to oppose any proposals for substantive tax-cutting or spending increases to kick-start the economy, saying the state of the public finances ruled out such measures. "I'd love it if there was some magic wand," Mr Cameron told the BBC.