When Richard Marsden looks across the Wear gorge to the centre of Sunderland, he has never seen so many cranes. His design and build firm, BDN, is rushing to renovate an old stable block in the shadow of the city’s football stadium.
“Now there’s a bit of a resurgence, I want to be part of that,” he says of Sunderland, as joiners and carpenters fit out bars and a microbrewery ready for the new season.
The 140-year-old building was once the stables for horses used to take coal to the railway from the mines directly beneath what is now Sunderland’s Stadium of Light. For years the stables stood derelict, roofless and neglected, only a few hundred metres from Sunderland’s city centre – albeit on the other side of the deep river gorge. Marsden is hoping those days are over.
His bet is not a one-off. Sunderland’s gorge-top skyline is changing rapidly as the city’s leaders try to reverse decades of hollowing out of the city centre. It is an experiment in local government intervention, and also in a form of industrial strategy that looks to cities and the UK’s dominant services economy as well as eyecatching factories as a way of reviving the sluggish economy.
Sunderland’s leaders are hoping that the intervention can serve as an example for other parts of the country. If it succeeds, it could also be watched with interest by Keir Starmer, who, polls suggest, will lead a Labour government working out its approach to industrial and economic strategy.
Some Labour activists have expressed frustration over what they describe as a lack of difference with the Tories, particularly after the party backtracked earlier this year on green investment plans. But the election still offers a clear choice between the parties, with the Conservatives under Rishi Sunak excising any reference to industrial strategy, and going cold on the “levelling up” agenda to address regional imbalances.
The Nissan model
Sunderland is already a beacon for one type of industrial strategy. In the early 1980s Margaret Thatcher played a key role in persuading Japan’s carmakers to build factories in the UK. Nissan chose Sunderland for its plant, bringing thousands of jobs that helped to fill the gap left by the decline of shipbuilding and coal mining.
Nissan’s factory is now seen as arguably the most successful example of British industrial strategy, spurring an automotive supply chain in the north-east and persuading rival Japanese carmakers Toyota and Honda to follow it to the UK.
The Conservative government under its four prime ministers since Brexit – including Sunak, despite his apparent aversion to the idea of industrial strategy – has pursued a similar approach. It has delivered juicy subsidies to Nissan to persuade it to upgrade its factory to produce electric cars. In the factory, workers talk of their pride – tinged with relief – that the plant will be part of the electric vehicle revolution.
Nissan is investing hundreds of millions of pounds to increase the productivity of the plant, with robot arms that wave an elegant pattern to cover car bodies with paint, and upgraded car carriers able to hold the extra weight of a battery as workers slot fittings in. The automated lines move constantly on by far the UK’s busiest production line: of the 905,000 cars made in Britain in 2023, a third were produced in Sunderland.
The battery maker AESC, a part Chinese-owned, Japan-headquartered manufacturer, is also building two giant “gigafactories” next door to supply the car industry.
Paul Swinney, director of policy and research at Centre for Cities, a thinktank, says Nissan’s arrival on the edge of town in the 1980s was a “good thing because the city was in a pretty bad place when they came in”.
The cluster of Japanese companies in the surrounding area is evidence of how one inward investment can lead to more. But attracting one big company is not enough to sustain a city, says Swinney, who also happens to be from Sunderland. (Centre for Cities is based in London.)
“The key thing about Nissan is that Sunderland is still in need of being levelled up 40 years on from Nissan coming in,” says Swinney. “It hasn’t really shifted things. We’re still in the same problems.”
Clear evidence of discontent with Sunderland’s economic lot came in 2016. Concerns over Brexit disruption to Nissan made Sunderland a symbol of the tensions at the heart of the referendum. That was confirmed when images of a Vote Leave supporter borne aloft with her arms raised on referendum night were shown around the world.
Unlike in some parts of the so-called red wall, Labour’s three MPs for Sunderland held on to their seats in the 2019 wipeout.
Labour’s Kim McGuinness knows that her job is to deliver for voters who rejected the status quo in the 2016 referendum, and again four and a half years ago. She was elected last month as the first mayor of the North East Combined Authority, which stretches from Northumberland to Durham, via Tyne and Wear.
She is a keen proponent of devolution, which she believes has not gone far enough, leaving cities such as Sunderland struggling for attention from Westminster.
“It’s about determining our own priorities,” she says, such as her immediate move to take the region’s bus network under public control, and extending the Tyne and Wear metro to nearby Washington.
While Nissan, which sits between Sunderland proper and Washington, has been a success, its nearest city been unable to fully capitalise on that economic boom. Many of the 6,000 workers at the factory commute from outside the city – in some cases they live far away.
Sunderland’s decline in the second half of the last century was “particularly comprehensive”, according to a 2009 Centre for Cities report, because of a reliance on coal mining, shipbuilding and glass manufacture (the city hosts the National Glass Centre). It also suffered from the larger gravitational pull of Newcastle, its close neighbour, which won much of the growth in financial and business services.
McGuinness highlights the challenge of child poverty in particular, which she blames on underinvestment by government. Seven of Sunderland’s city wards are among the 1,000 poorest of England’s 32,800 wards, according to the government’s indices of multiple deprivation.
People moved out, as it was easier to build on greenfield land outside the historic centre rather than brownfield land in the middle of town left by departing industry and older housing. The council built an out-of-town business park, Doxford International, to host call centres and back offices for the likes of Barclays bank and the mobile network EE. The business park has a sculpture referring to the city’s shipbuilding past, but in truth the expanses of car parks and utilitarian offices could be anywhere.
Reviving the riverside
The city’s new plan is a 180-degree reversal. It will put 1,000 homes right by the River Wear, alongside office developments, plus a hillside park to make the underused riverside more attractive.
The site itself was formerly the giant Vaux brewery, until that was knocked down in the late 1990s. Supermarkets considered buying it, but the council eventually decided to make it a central focus, opening a new city hall there in 2022.
Patrick Melia, Sunderland city council’s chief executive, says the authority wants to double the population and number of jobs in the city centre. (Only 1% of the population lives there now.) It has aggressively courted private sector investments, as well as the limited pots of levelling up money from central government where they have been available.
“We knew we wanted a diversified economy,” he says, 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 fights hard to keep Nissan, but “we didn’t want to be all in automotive and advanced manufacturing,” he says.
Usually a Marks & Spencer closing down is a bad sign for a city centre’s prospects, but in Sunderland Melia says the council is planning to knock down the ageing building and replace it with the second phase of offices.
It has revived an old fire station as a theatre and restaurant, and is also seeking to link the developments for pedestrians, who will be able to walk easily from the high street to central Keel Square – overlooked by the headquarters of Hays Travel – and across to the new development.
John McCabe, head of the North East Chamber of Commerce, welcomes the focus on attracting services jobs, as well as the support for the factories on the city’s edge that garners the most attention.
“There’s got to be a place for both,” says McCabe. “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.’”
Local authorities have been through cash-straitened times of austerity since the Conservatives first took power in coalition with the Liberal Democrats in 2010. Under financial pressure, some councils – notably Woking in Surrey and Thurrock in Essex – were lured into bankruptcy by commercial property that promised high returns but ended up as unfinished monuments to local politicians’ hubris.
Melia is confident that Sunderland will avoid that fate. For one thing, unlike some of the disastrous council schemes, the riverside plan has attracted £100m in funding from Legal & General, a major stamp of approval from the UK’s biggest investment manager. Nigel Wilson, L&G’s influential former boss, cited it as an example of the investor backing the UK economy.
A new footbridge links the new offices directly in a straight line across the river to the Stadium of Light. Sunderland AFC has the ninth-largest football stadium in England, even if it has faltered during seven years out of the top flight (including a disastrous double relegation). But the fans keep coming. The bridge will make landfall right by the Sheepfold Stables in 2025, providing what Marsden hopes will be a steady stream of punters looking for somewhere to have a drink on match days. But he also hopes to attract people from outside Sunderland.
Another key part of the city’s hopes is a mile up the Wear, where Leo Pearlman, the Sunderland-born co-founder of the production company Fulwell 73, is behind Crown Works Studios, an ambitious plan to create 8,500 film and TV jobs in the north-east. That could diversify the economy further.
Pearlman says it could have a bigger impact on the Sunderland economy than the gigafactories being built next to the Nissan plant.
The council granted the £450m project planning approval in March. The development is being carried out by FulwellCain, a joint venture between Fulwell 73 and Cain International, a London investment firm.
Pearlman wants government to think of support for the UK’s services economy (which far outstrips British manufacturing on every measure apart from hard-hat photo opportunities) in the same way as it does for factories. The nearby gigafactories being built by AESC have garnered grants and loans worth hundreds of millions of pounds.
Pearlman says of Crown Works Studios: “This is a factory – that’s exactly what it is. The impact that it will have is exponentially bigger than a gigafactory, for example.”
Small business owners are starting to feel a difference in the mood. Ian Wright, whose New World Designs uses arrays of cameras to make Matrix-style “bullet time” videos, says his sports and fashion advertising clients “can’t grasp how desperate it was” for the city once industry left. He arrived in Sunderland in 1999 to study, but his adopted city was “derelict” and “dead”. Resentment about the lack of investment and local budget cuts fed the Brexit vote, he believes.
Wright is relatively optimistic about Sunderland’s future, and the media businesses that could come if Crown Works Studios succeeds.
“It’s starting to look like a proper city,” he says. “It’s the first time seeing that many cranes. You can almost see the tide turning.” Yet he cautions that “it’s got a long way to go”.
The true test of Sunderland’s success will not be the factories, however impressive they are, but whether higher-paying jobs come. Nissan again offers a salient example. It provides good manufacturing jobs in Sunderland, but many of the best-paid engineering and design roles are in London or Cranfield, Bedfordshire.
“Would [a company] put its high-value stuff as well as its low-value stuff there?” asks Swinney. “If the answer is ‘no’, then you haven’t levelled up.”
• This article was amended on 10 June 2024 to reflect the fact that the battery maker Envision AESC has rebranded as AESC and it is not a joint venture.
