David Cameron has appointed Lord Young as the UK's 'enterprise tsar' to discover if small businesses are getting a good deal from the government.

The Tory peer has been given the task of cutting red tape for small businesses and finding ways to encourage start-ups. In essence, Cameron has said he is looking for "wholesale changes" in attitude.

In a letter to Lord Young, Cameron wrote: "Today, government is institutionally biased against small businesses and enterprise. Despite warm words from ministers and governments of all parties, the obstacles and burdens facing small businesses have multiplied over the years."

Lord Young's first task will be to prepare a "brutally honest" report examining how government departments interact with and affect small businesses.

"I'll be focusing on what barriers government policy have been put in the way of small business development and helping to advise on what can be done to make life easier for businesses to start and grow," the peer said.

His work will also address, among other things, how the state listens to SMEs in shaping and implementing policy and how government communicates with SMEs to provide simple, clear guidance and advice.

Government procurement, access to finance and support for trade and investment will also be addressed.