How to Cut National Debt By 60% And Restore the UK’s Strength
As the Iran war flushes out Britain’s political and military weakness, Sovereignty Without Illusion, published by the Adam Smith Institute (ASI) in partnership with the Institute for Free Trade (IFT) and the Henry Jackson Society (HJS), shows how the UK can reclaim its status as an independent power.
By liberalising the Green Belt, monetising state assets and restructuring public sector pensions, the UK could unlock over £1.7 trillion in tax receipts, boosting growth and independence.
This would finance the reinforcement of Britain’s hard power, enabling the country to obtain surveillance and logistics under its own control, add to drone and anti-drone capacity, double the size of the army and build out the naval fleet.
It would also enable policymakers to cut the national debt by over 60%, securing Britain’s fiscal sovereignty by making it less dependent on capital markets.
Our politicians have squandered the freedom from the EU’s straitjacket provided by Brexit. They should now push Mutual Recognition Agreements (MRAs) to promote Britain’s trade sovereignty more broadly.
Withdrawing from the European Convention on Human Rights (ECHR) and the UN Refugee Convention would restore sovereignty on borders and the machinery of government, while pulling out of the COP process would do the same for energy.
This report shows how the UK can finally break the cycle of managed decline by leveraging its post-Brexit freedoms to rebuild its military, secure its borders and reclaim its status as a truly independent global power.
The Adam Smith Institute (ASI), in partnership with the Institute for Free Trade (IFT) and the Henry Jackson Society (HJS), has published Sovereignty Without Illusion, a comprehensive blueprint for using Brexit freedoms to resolve Britain’s political and military vulnerabilities. The report argues that as the war in Iran flushes out the UK's strategic weaknesses, the nation must stop outsourcing its authority to international bodies and instead move to make Britain a solvent, independent, and dominant global power once again.
At the core of the report's domestic agenda is a radical proposal to shrink the public balance sheet and restore personal independence. By liberating the value locked up in suburban land, specifically the London Green Belt, alongside privatising stagnant public assets and reforming off-balance sheet pension obligations, the UK could generate over £1.7 trillion in government receipts. This monumental windfall would allow policymakers to reduce the national debt by over 60%, transforming the UK from a debt-distressed nation into a global financial fortress that is no longer beholden to the volatile pressures of international bond markets.
The report highlights that British politicians have, to date, squandered the freedom from the EU’s regulatory straitjacket. To rectify this, the authors propose abandoning decade-long treaty negotiations in favour of Mutual Recognition Agreements (MRAs). By unilaterally recognising the standards of reliable partners, the UK can instantly slash trade barriers. This shift would make the UK the most attractive place in the world to do business, offering a stark alternative to the rising protectionism seen in the EU and the USA.
To remain a global broker, the report argues that Britain must reinforce its hard power. Using the solvency generated from fiscal reforms, the UK should boost defence spending to 5% of GDP to finance a total overhaul of national security. This means doubling the size of the Army, building out the naval fleet, and securing independent surveillance and logistics. A significant portion of this funding would be dedicated to establishing world-leading drone and anti-drone capacities, ensuring the UK can defend its interests in an increasingly unstable world order.
Finally, the report advocates for a total repatriation of the machinery of government. This includes withdrawing from the European Convention on Human Rights (ECHR) and the 1951 Refugee Convention, both of which have evolved into parallel legal systems that undermine Parliamentary sovereignty. By returning crucial national security and border decisions to British representatives rather than foreign judges, the UK restores its common law traditions. Additionally, pulling out of the COP process would allow the UK to reclaim sovereignty over its own energy security and industrial policy.
By executing this reset, the UK transforms from a vulnerable rule-taker into a global rule-maker. Freed from the shackles of international bureaucracy, the UK can secure its seat at the global top table through genuine strength and solvency.
Commenting, Rt Hon Brandon Lewis, Chairman of the Henry Jackson Society, said:
“Britain has the assets, the talent and the opportunity to be a leading global power - but too often we have lacked the urgency to act. Unlocking this level of economic potential would not just reduce debt, it would restore our ability to defend ourselves and shape events on the world stage.”
Miles Saltiel, Senior Fellow at the Adam Smith Institute, said:
“At this moment of national and international uncertainty, the UK can take a lead, but only if it restores control over its own energy, fiscal, security and trade destiny.”
ENDS
Notes to editors:
Sovereignty Without Illusion is a collaborative report published by the Adam Smith Institute, the Institute for Free Trade, and the Henry Jackson Society. It is available here.
Miles Saltiel is a Senior Fellow of the Adam Smith Institute. He read PPE at Oxford and wrote his MA dissertation on Japanese business and government at Sussex. His early career was in tech corporate finance and recoveries. He subsequently moved into investment banking, joining the WestLB Group as Head of Equity Research, Emerging Markets, before leading London-based Tech Research, where he was voted one of the UK’s top fifty in the New Economy, and becoming the group’s senior tech investment banker.
Robert Armstrong is Director of the Institute for Free Trade,where he serves as author, researcher and manager of the secretariat, responsible for papers on environmental economics, public economics and international trade policy. He is also a Senior Advisor to the New Lines Institute for Strategy and Policy in Washington DC. He was formerly a staffer in the European Parliament in Brussels and Strasbourg, responsible for administrative and organisational affairs as well as constituency case-working and political events. He read PPE at Hertford College, Oxford.
Dr Theo Zenou is a Visiting Fellow of the Australian National University, having recently left his role as a Research Fellow at the Henry Jackson Society. He completed his PhD in history at Cambridge University, where he also taught undergraduates. He was formerly a Theodore Sorensen Fellow at the John F. Kennedy Presidential Library and a Visiting Researcher at Boston University. Prior to his doctorate, he worked in television and studied film and history at the Universities of Westminster and Edinburgh.
For any further details on the methodology, or to arrange an interview, please contact press@adamsmith.org / +44 7584778207
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