IAIN Duncan Smith has appointed controversial businesswoman Michelle Mone to lead a government review into encouraging the unemployed to set up new businesses.

Mone, who grew up in Glasgow’s East End and set up the Ultimo lingerie brand, was recently appointed by David Cameron to the Tory benches in the House of Lords.

The lingerie tycoon, who also sells diet pills, is thought to be worth £38 million and will not be paid for the work, which Duncan Smith hopes will help make Britain a nation of shopkeepers once more.

The Work and Pensions Secretary said: “Entrepreneurship can play an important role in supporting economic growth and creating jobs in our most disadvantaged communities.

“However, people living in those areas face a range of additional barriers they need to overcome in starting and growing businesses.

“I am delighted Michelle has agreed to lead this review. There’s no-one I can think of that’s better qualified to help young entrepreneurs from deprived backgrounds to turn a good idea into a flourishing business.

“We used to be known as a nation of shopkeepers. I want Michelle to report back to me on how we can encourage people of all backgrounds to take up this entrepreneurial spirit.”

Mone, who runs a mentoring programme that costs up to £10,000 a time, said: “My philosophy is that it does not matter where you are from, what education you have, or if you are from an affluent background or not, you can make it if you work hard, set your goals and never give up. I’ll be travelling across the UK to talk to and listen to people and groups from all backgrounds. I want to learn about the barriers they are facing and what changes are needed.

“A truly modern and successful economy needs to be able to unleash the entrepreneurial energy or skills of everyone in society.

“It cannot tolerate a situation where people are held back from achieving dreams of working for themselves and creating jobs for others simply because of where they are from or because they are a lone parent.”

The Department for Work and Pensions said the review will look at obstacles faced by people in disadvantaged areas, including benefit claimants, women, young and disabled people and ex-offenders, and make recommendations next year.

An SNP spokesman gave the review a cautious welcome: “We support efforts to help people from disadvantaged backgrounds — but this latest effort from the Tories is fatally undermined by their cynical attacks on the poorest in society through their savage welfare cuts, while Michelle Mone’s peerage simply highlights all that is wrong with the House of Lords as David Cameron stuffs it with unelected cronies.”

Colin Borland, the Federation of Small Businesses’ head of external affairs in Scotland, said: “It is good to see a Scottish female entrepreneur with real experience of the highs and lows of business life being drafted in to see how we can help more people from all sorts of backgrounds become their own boss.”

Mone is no longer day-to-day boss of Ultimo, the lingerie company she set up, although she still sits on the board and owns 20% of the company.