Five publicly owned sites across the North East have been earmarked as prime candidates for North East defence enterprise zones, according to a new report from the Adam Smith Institute setting out a comprehensive plan to reindustrialise Britain.
The sites at Blaydon Quarry, Newburn Riverside, High Hanning, Quarrington Hill and High Pittington are described as ‘perfect’ for a new generation of Enterprise Zones. The Adam Smith Institute (ASI) argues that repurposing them for defence manufacturing would strengthen Britain’s national security while directly tackling the region’s economic challenges.
What the North East defence enterprise zones would look like
Each zone would be anchored by one large multinational defence firm. The idea is that a major anchor tenant kickstarts manufacturing and stimulates supply chains around the site, without displacing existing regional players.
The ASI makes the case plainly: ‘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 think tank also points to the region’s fundamentals. The North East combines England’s lowest land prices and employment rates with an existing 110,000-strong manufacturing workforce and what the ASI calls ‘a proud industrial heritage’.
The five sites were selected on the basis of size, to provide enough space for industries and supply chains to grow. The ASI used the March 2026 release of Commercial and Corporate Ownership Data, which contains approximately 4.38 million title records, as part of identifying suitable publicly owned land for the scheme.
Within each zone, a single governing authority would enforce fast-tracked planning decisions. Investors would receive full factory write-offs, zero-rated business rates, lower employer National Insurance contributions and discounted power rates in energy-surplus areas.
Nissan Sunderland as the blueprint
The report points to the Nissan Sunderland project as the model to replicate. At its peak, that project directly employed 7,000 workers and has invested billions of pounds into the local economy. The ASI wants defence manufacturing to do the same.
Mitchell Palmer, Economist at the Adam Smith Institute, said: ‘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.’
Local leaders back the proposals
Council leaders across the region have responded positively. Cllr Nick Allan, leader of Gateshead Council, said his team has already been asked to conduct an initial scoping exercise on the Blaydon Quarry site. He cited its proximity to the A695, its availability, the fact it does not encroach on green belt land, and its distance from housing as key advantages.
Allan set out an ambitious list of potential gains: direct employment, business development, attraction of tertiary suppliers, high-tech enterprise concentration, high-level apprenticeships and long-term revenue for the borough.
Cllr Chris Eynon, leader of Sunderland City Council, called the proposals ‘a very innovative idea to help supercharge our manufacturing base along with supporting the UK defence industry within our region.’
Kyle Genner, Reform UK Durham County Council Cabinet Member for Neighbourhoods, Environment and Police Relations, also backed the plan. He said County Durham has ‘harshly felt’ decades of industrial decline and described the proposal as ‘a new blueprint for local regeneration done right’, arguing it could ‘restore County Durham as the beating heart of British industrial strength.’
The report is now with central government for consideration. Palmer’s call for the Prime Minister, Chancellor and Defence Secretary to act on the North East defence enterprise zones proposal gives ministers a clear timeline pressure: the region is ready, the sites are identified, and local leaders are already scoping the ground.