The Adam Smith Institute (ASI) is calling for a new generation of “oven-ready defence factories” to be built across the North of England so the UK can manufacture weapons in an emergency. The think tank warns that Britain's military supply chains are “dangerously exposed” and that the defence industry is held back by “sky-high capital costs, the highest energy prices in Europe and excessive red tape”.
Enterprise zones proposed for North East
The ASI wants low-tax “enterprise zones” created in the North East on publicly-owned land, with fast-tracked planning permission for factories. This would return “high-skilled, high-paid jobs to one of Britain's most deprived regions”. The think tank stresses the need to boost capacity, stating: “In a conflict with Russia, Britain's supply of drone capabilities would last our armed forces just one week.”
Leaders in local government from across the region have strongly welcomed the proposals. James Hodgkinson of the ASI said: “When new technologies evolve in months rather than decades, taking years to approve a factory is a material threat to Britain's national security.”
Energy costs and anchor tenants
The think tank warns that a major defence manufacturer would spend more than £200 million on electricity in the UK but only £40 million in the United States. It says tackling energy costs is “essential to any plan to improve the viability of British industry”.
The ASI proposes each enterprise zone would be served by one large “anchor tenant” – a large, multinational defence firm – to “kickstart manufacturing and stimulate the growth of supply chains around the site”.
Local leaders respond
Chris Eynon, the 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.”
Nick Allan, the leader of Gateshead Council, said his council is “eager” to pursue the potential of the proposals and he has asked the economic development team to conduct an “initial scoping exercise”. Kyle Genner, a cabinet member at Durham County Council, added: “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 County Durham as the beating heart of British industrial strength.”
Political and official reaction
Conservative MP Sir Desmond Swayne, who served as a Territorial Army major in Iraq, 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… 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.”
A Ministry of Defence spokesperson said: “Through the Defence Industrial Strategy we're improving the resilience of our industrial base, including by launching Defence Growth Deals, which bring together government, local authorities and industry to unlock innovation, create skilled jobs and grow defence manufacturing, including boosting SMEs. We are also investing in sovereign production capacity, including through six new energetics and munitions factories and a new uncrewed systems centre, helping deliver a stronger, more resilient defence industrial base that can support our national security for the long term.”
