As Richard Marsden looks across the Wear Gorge (a deep, narrow valley with very steep sides), there are more cranes in Sunderland’s (in the United Kingdom) centre than he has ever seen. His design-build company, BDN, is working quickly to rehabilitate an ancient stable block that is located behind the football stadium in the city.
“Now there’s a bit of a resurgence, I want to be part of that,” Richard Marsden says of Sunderland, as joiners and carpenters fit out bars and a microbrewery ready for the new season, the Guardian reported.
The 140-year-old structure was originally the stables for the horses that were used to transport coal from the mines directly below Sunderland’s Stadium of Light to the railway. Though they were on the other side of the deep river gorge, the stables were only a few hundred metres from Sunderland’s city centre and stood abandoned, roofless, and neglected for many years. Marsden hopes those times are behind him.
This is not an isolated bet. The gorge-top skyline of Sunderland is rapidly changing as the city’s leaders attempt to undo decades of urban centre hollowing out. This is an experiment in both local government intervention and an industrial strategy aimed at revitalising the flagging economy by focusing on eye-catching factories, the United Kingdom’s dominant services sector, and cities.
Government officials in Sunderland are hoping that other regions of the nation can take note of their intervention. Keir Starmer, who is expected to head a Labour government tasked with formulating its industrial and economic policies, may also be keeping a close eye on it if it proves successful.
Given that the party has retracted its plans for green investments earlier 2024, some Labour activists have expressed frustration over what they see as a lack of differences with the Tories. Notwithstanding, there is still a clear choice between the parties in this election, with the Conservatives led by Rishi Sunak dropping all mention of industrial strategy and abandoning their “levelling up” plan to correct regional disparities.
The Nissan model
Already, Sunderland is a shining example of one kind of industrial strategy. Margaret Thatcher was instrumental in convincing the Japanese automakers to establish factories in the UK at the beginning of the 1980s. Nissan selected Sunderland for its plant, bringing with it thousands of jobs that assisted in bridging the employment gap created by the collapse of coal and shipbuilding.
Today, Nissan’s factory is regarded as possibly the best example of British industrial strategy; it helped to establish an automotive supply chain in the northeast and convinced rival Japanese automakers Toyota and Honda to follow it to the United Kingdom.
The Conservative government has followed a similar course under each of its four prime ministers since Brexit, despite Sunak’s seeming distaste for the concept of industrial strategy. Nissan has been convinced to upgrade its factory to produce electric cars by the generous subsidies it has provided. Workers in the factory express their pride, mixed with a hint of relief, at the plant’s involvement in the revolution of electric vehicles.
Nissan is spending hundreds of millions of pounds to make the plant more productive. It will install upgraded car carriers that can support the additional weight of a battery while workers slot in, as well as robot arms that paint cars in an elegant pattern. By far the busiest production line in the United Kingdom, the automated lines are always in motion. Of the 905,000 cars produced in the British mainland in 2023, three-quarters were made in Sunderland.
In addition, the Chinese-Japanese joint venture Envision AESC is constructing two enormous “gigafactories” adjacent to each other in order to supply the automotive sector.
According to Paul Swinney, director of policy and research at the think tank Centre for Cities, Nissan’s introduction to the outskirts of the city in the 1980s was a “good thing because the city was in a pretty bad place when they came in.”
One example of how one inward investment can lead to more is the concentration of Japanese businesses in the surrounding area. But according to Swinney, who is also from Sunderland, luring in a single large corporation is insufficient to keep a city viable. London is home to the Centre for Cities.
In 2016, it became evident that Sunderland was unhappy with its economic situation. Nissan was worried about how Brexit would affect business, which turned Sunderland into a symbol of the tensions that drove the referendum. The world saw pictures of a Vote Leave supporter with her arms raised and borne aloft on referendum night, which verified that.
Labour’s three MPs for Sunderland retained their seats in the 2019 wipeout, in contrast to other areas of the so-called red wall. In the 2016 referendum and again four and a half years prior, voters rejected the status quo, and Kim McGuinness of Labour is aware that her responsibility is to deliver for them. The North East Combined Authority, which connects Northumberland with Durham via Tyne and Wear, elected her as its first mayor recently.
Kim has been a strong supporter of devolution, which she feels has not gone far enough and that Westminster still struggles to give cities like Sunderland priority.
“It’s about determining our own priorities,” she says, citing her prompt action to place public authority over the area’s bus system and the extension of the Tyne and Wear metro to neighbouring Washington.
Despite Nissan’s success, the neighbouring city has not fully benefited from the economic boom experienced by Sunderland and Washington. Many of the factory’s 6,000 employees commute from outside the city, and some even travel long distances to work there.
According to a 2009 Centre for Cities report, Sunderland’s decline in the second half of the 20th century was “particularly comprehensive” due to the city’s reliance on coal mining, shipbuilding, and glass manufacturing. It was also impacted by Newcastle, a nearby city that attracted a lot of the expansion in financial and business services.
McGuinness draws attention to the issue of child poverty in particular, attributing it to government underfunding. Using the government’s multiple deprivation indices, seven of Sunderland’s city wards rank among the 1,000 poorest of all 32,800 wards in England.
People chose to relocate to newly developed greenfield areas outside of the historic centre because it was more convenient to build there compared to repurposing old industrial and residential areas within the town. The local council consequently established Doxford International, an out-of-town business park, which now serves as the site for call centres and administrative offices for companies such as Barclays and EE.
Although there is a sculpture on the premises that pays homage to the city’s shipbuilding history, the overall appearance of the business park, with its vast parking lots and simple office buildings, lacks any distinguishing features that connect it to its specific location.
Reviving the riverside
The new plan for the city is a complete reversal. To improve the appeal of the underutilised riverbank, 1,000 residences will be built next to office buildings and a park on a hillside.
The massive Vaux brewery stood in this exact location before it was demolished in the late 1990s. Although supermarkets were thinking about purchasing it, the council ultimately chose to make it the centre of attention, constructing a new city hall there in 2022.
Chief executive Patrick Melia of the Sunderland City Council says the authority hopes to double both the population and employment in the city centre. There are currently only 1% of people living there. In addition to the small pots of levelling up funding from the central government when available, it has actively courted investments from the private sector.
“We knew we wanted a diversified economy, standing beside a model showing the new city centre as the council imagines it, pointing to the mix of proposed housing, offices and a new eye hospital. The council fought hard to keep Nissan, but we didn’t want to be all in automotive and advanced manufacturing,” Melia said.
A former fire station has been renovated into a restaurant and theatre. Additionally, efforts are being made to connect the developments so that people can stroll from the high street to Keel Square, which is in the middle and is visible from Hays Travel’s headquarters and from there to the new development.
The chief of the North East Chamber of Commerce, John McCabe, is pleased that the emphasis is being placed on luring in jobs in the services sector and that the factories on the outskirts of the city are receiving the most support.
“There’s got to be a place for both. It would be ill-advised to put all of your eggs in one basket. For probably too long we thought, as long as Nissan is there, that’ll be OK,” McCabe said.
Since the Conservatives and Liberal Democrats first formed a coalition in 2010, local governments have faced financially difficult periods of austerity. Amidst fiscal strain, certain councils, particularly Woking in Surrey and Thurrock in Essex, were seduced into insolvency by commercial properties that professed substantial profits, but ultimately served as incomplete symbols of the conceit of nearby politicians.
Melia thinks Sunderland will escape that fate. Firstly, in contrast to some of the calamitous council plans, the riverside plan has received £100 million in funding from Legal and General, a significant endorsement from the largest investment manager in the UK. It was highlighted as an example of the investor supporting the UK economy by an influential former boss of L&G, Nigel Wilson.
A recently constructed footbridge connects the Stadium of Light and the new offices in a direct line across the river. Despite struggling during its seven-year absence from the top flight, which included a disastrous double relegation, Sunderland AFC boasts the ninth-largest football stadium in England. Fans, however, continue to arrive. In 2025, the bridge will land directly next to the Sheepfold Stables, bringing with it what Marsden anticipates will be a constant flow of spectators seeking a place to get a drink during game days. Additionally, though, he wants to draw visitors from outside Sunderland.
Leo Pearlman, the Sunderland-born co-founder of Fulwell 73, is the driving force behind Crown Works Studios, an ambitious plan to create 8,500 film and TV jobs in the northeast, which is another important component of the city’s hopes located a mile up the Wear. That might lead to more economic diversification.
According to Pearlman, it might have a greater effect on Sunderland’s economy than the gigafactories that are being developed close to the Nissan facility.
The £450 million project received planning approval in March from the council. FulwellCain, a joint venture between Fulwell 73 and London investment firm Cain International, is handling the development.
Pearlman wants the government to support the UK’s services sector in the same way that it supports factories, even though the latter greatly outpaces the former in all categories save hard-hat photo opportunities. Envision is building gigafactories nearby, and the project has received hundreds of millions of pounds in grants and loans.
“This is a factory – that’s exactly what it is. The impact that it will have is exponentially bigger than a gigafactory, for example,” Pearlman says of Crown Works Studios.
Small company owners are beginning to notice a shift in the atmosphere. Ian Wright of New World Designs says his clients in sports and fashion advertising “cannot grasp how desperate it was” for the city once the industry left. Wright’s company uses arrays of cameras to create “bullet time” videos reminiscent of the Matrix. Although his adopted city of Sunderland was “derelict” and “dead,” he had come to study there in 1999. He thinks that discontent over local budget cuts and a lack of investment contributed to the Brexit vote.
Wright is reasonably upbeat about Sunderland’s future and the potential media companies that could arise from the success of Crown Works Studios.
“It’s starting to look like a proper city. It’s the first time seeing that many cranes. You can almost see the tide turning. Yet it has got a long way to go,” Ian Wright said.
Even though the factories are impressive, whether or not higher-paying jobs arrive will be the real measure of Sunderland’s success. Nissan provides a noteworthy example once more.
Although there are plenty of well-paying engineering and design jobs in London and Cranfield, Bedfordshire, the majority of manufacturing jobs are found in Sunderland.
“Would (a company) put its high-value stuff as well as its low-value stuff there? If the answer is no, then you haven’t levelled up,” Swinney asked.