Business chief urges tax-free zone on M62

David Frost, director general of the British Chambers of Commerce, said the initiative would help to tackle the North-South divide and create a "counterweight" to London's economic dominance.

Under his plan, a huge enterprise zone would be created, encouraging new businesses to set up by offering tax breaks and relaxed regulation for up to 10 years.

Planning procedures would also be significantly speeded up to allow firms to set up and expand quickly.

Mr Frost: "Bluntly speaking in large parts of the Midlands and the North there are not enough businesses, there is not enough substantive business base.

"What we somehow need is a counterweight to London – but a counterweight at a time when there is no public money.

"So why don't we consider taking the M62 corridor and turning it into a giant enterprise zone for a period of five to 10 years where you have no business rates, no business taxes, reduced levels of legislation including planning and employment law and just allow that entrepreneurial spirit to absolutely run riot?"

Mr Frost's proposal came at a fringe meeting at the Liberal Democrat conference.