New Report Shows How To Get Devolution Right and Reindustrialise Britain
With devolution back at the heart of the political debate, a new report demonstrates that targeted deregulation, rather than new, confusing layers of regional bureaucracy, is the best way to reindustrialise Britain.
The Adam Smith Institute has identified five sites in the North East of England, perfect for the creation of a new generation of Enterprise Zones.
Through reduced taxes, fast tracked planning, and cuts to energy bills, these sites can become hubs of manufacturing right here in Britain, countering the narrative of decades of industrial decline.
An Enterprise Zone in the North East would leverage the region's low land costs, industrial heritage and 110,000-strong manufacturing workforce to create a thriving defence industry.
Using these zones for defence manufacturing would also strengthen Britain's national security, leap-frogging many of the planning hurdles and high capital costs that have made home-grown defence so difficult.
Unlike Burnham’s, these plans have been backed by local authority leaders from across the region.
Enterprise Zones, rolled out across left-behind parts of Britain, would boost employment and manufacturing while addressing regional inequality.
With Andy Burnham pledging ‘good growth in every postcode’ in a bid to rebalance the British economy, a new report from the Adam Smith Institute sets out a comprehensive plan to reindustrialise Britain.
The Adam Smith Institute has identified five large, publicly owned sites in the North East of England that it deems suitable for the creation of brand-new defence enterprise zones. These are located at High Hanning, Quarrington Hill, High Pittington, Blaydon Quarry, and Newburn Riverside.
The report aims to recreate the successes of the Nissan Sunderland project, which, at its peak, directly employed 7,000 workers and has invested billions of pounds into the local economy.
These past successes have shown that tax cuts alone are not enough. To encourage lasting growth, zones need three key features: a credible anchor tenant, large plots of cheap, publicly owned land, and rapid planning approvals.
The ASI’s report advocates a range of pro-industry measures inside its proposed enterprise zones. A single governing authority will enforce fast-tracked planning decisions to prevent delays, while investors will receive full factory write-offs, zero-rated business rates, lower employer National Insurance contributions, and discounted power rates in energy-surplus areas.
Each enterprise zone would be served by one large ‘anchor tenant’. A large, multinational defence firm which would kickstart manufacturing and stimulate the growth of supply chains around the site, without displacing existing regional players.
Defence is the ideal anchor sector because it is insulated from low-wage overseas competition, recycles tax relief through procurement, and enjoys strong public backing, with 69% of voters supporting a local defence employer.
The North East is especially well-placed to benefit from such a scheme, combining England’s lowest land prices and employment rates, an existing 110,000-strong manufacturing workforce, and a proud industrial heritage.
The usual objection to such a scheme, that zones merely shuffle activity between regions, overlooks the global reality. Mobile capital chooses between Britain and her competitor nations. China's Special Economic Zones drew in over $1 billion in foreign investment, which was new spending attracted to the country, not redistributed within it.
Beyond creating high-quality regional jobs and strengthening domestic manufacturing, these Enterprise Zones offer a practical blueprint for nationwide economic reform, proving that streamlined planning and targeted tax incentives can revitalise British industry and improve our national security.
Sir Desmond Swayne, Member of Parliament for New Forest West, said:
“For too long, Britain has allowed its sclerotic planning system and sky-high energy costs to stand between us and our own security. We cannot credibly discuss rearmament while the factories that would build our defences are strangled by red tape before a single brick is laid.”
“A fast-tracked defence enterprise zone is exactly the kind of decisive action an increasingly unstable world demands. It would let us build the industrial base this country needs to defend itself, and it would create real, productive jobs for British workers, rather than shipping that capacity and those livelihoods overseas.”
“Our national security and the prosperity of British workers are not competing priorities. They are one and the same. It is time to stop dithering and get Britain building again.”
Kyle Genner, Reform UK Durham County Council Cabinet Member for Neighbourhoods, Environment and Police Relations, said:
“The United Kingdom has been in industrial decline for decades, and nowhere has this been more harshly felt than in County Durham. Our landmark motion to reindustrialise County Durham was the first step in reversing that decline, but it's now time to shift from the ‘what’ to the ‘how’.”
“Any proposal to bring jobs to County Durham must work for the people who live here. That means building upon our great industrial and military heritage, while providing the high-quality, rewarding and long-term job opportunities that those from County Durham deserve.”
“This proposal presents a new blueprint for local regeneration done right. By establishing a targeted Defence Enterprise Zone backed by streamlined fast-track planning and major anchor tenants, we can unlock the economic growth that local people have been missing and restore Country Durham as the beating heart of British industrial strength.”
Cllr. Chris Eynon, Leader of Sunderland City Council, said:
“This is a very innovative idea to help supercharge our manufacturing base along with supporting the UK defence industry within our Region. We need to have a more innovative approach to driving job creation in the North East and such plans as mentioned in the report are the exact type of outside the box approach that can be explored.”
Cllr. Nick Allan, Leader of Gateshead Council, said:
“Gateshead Council are eager to pursue this potential.”
“In establishing a centre of production and excellence for the technological aspect of defence (drones, space, cyber etc.), we can achieve a number of objectives for the borough, including direct employment and business development, attraction and establishment of tertiary suppliers with added employment potential, attraction of other 'high tech' enterprises via the benefits of concentration, pool of skilled labour etc., quality, well paid employment opportunities, stability in the long term - i.e. future proofing the enterprise zones by focusing of innovation and technology which are transferable to other end uses, provision of high-level apprenticeships and development of market led skilling, promoting revenue to the borough, and providing focus for future development.”
“We discussed the potential of the Blaydon Quarry site adjacent to the A695. This has the benefit of being available, not encroaching on green belt and being sufficiently removed from housing whilst having good access to major roads and routes. Indeed, I have asked our economic development team to conduct an initial scoping exercise.”
Mitchell Palmer, Economist at the Adam Smith Institute, said:
“Though fashionable today, place-based policies have a chequered past in Britain. Nonetheless, they offer a unique chance to try out radical tax and deregulation ideas in a sandbox, so they shouldn’t be abandoned.
Our proposal – to focus first on defence manufacturing in the North-East of England – kills three birds with one stone. First, it elevates a struggling region of the country; second, it pilots possible nationwide reform; and, third, it allows Britain to better protect herself.
It is worth immediate consideration by the new PM, Chancellor, and Defence Secretary.”
James Hodgkinson, Research Associate at the Adam Smith Institute, said:
“Modern deterrence is no longer just a matter of budget size. Increasingly, it is down to speed of production. When new technologies evolve in months rather than decades, taking years to approve a factory is a material threat to Britain’s national security. Fast-tracked planning and a genuinely pro-industry approach would give British manufacturers the agility to scale next-generation hardware at the speed modern warfare demands.”
Methodology:
To identify the pilot sites, we built our own database of publicly owned land in the North East, since no single national dataset exists. We combined HM Land Registry's corporate ownership data, the Cabinet Office's central government property register, and HMLR's parcel boundary polygons, geocoding each ownership record and matching it to the parcel it sits within.
We then filtered these parcels against the constraints a large industrial site must meet: minimum size, available electricity grid capacity, and avoidance of protected landscapes and flood zones. The remaining candidates were checked by eye on satellite and topographical imagery to rule out sites that were too remote, poorly connected to the road network, physically unsuitable, or already built on.
–ENDS–
Notes to editors:
The report is available here.
For further comments or to arrange an interview, contact Sebastian Charleton, press@adamsmith.org | 0758 477 8207
The Adam Smith Institute is one of the world’s leading think tanks. It is ranked first in the world among independent think tanks and as the best domestic and international economic policy think tank in the UK by the University of Pennsylvania. Independent, non-profit and non-partisan, the Institute is at the forefront of making the case for free markets and a free society, through education, research, publishing, and media outreach.