Beyond Freeports
Revitalising Britain with self-governing cities
By Vera Kichanova
The Freeports strategy announced by the previous government attempted to address today’s challenges with yesterday’s recipes, lacked the necessary deregulatory framework and failed to address key issues such as the housing crisis.
This paper proposes an alternative: a new generation of ‘Hong Kong-style’ self-governing cities with broad autonomy to experiment with diverse planning regimes, governance models and investment strategies.
From the City of London to Canary Wharf, Britain is the cradle of urban self-governance. Across the globe, British institutions continue to create urban miracles – consider Hong Kong or the financial hubs in Dubai and Qatar, which adopted English common law and became magnets for investment.
The paper explores historical and contemporary examples of such regions, from the Hanseatic League to emerging charter cities, demonstrating how these models contribute to prosperity and economic revitalisation.
Self-governing regions are on the rise in emerging economies, where they often struggle with the very institutional instability they seek to overcome.
The UK, with its strong institutions of democracy, property rights and rule of law, is well-positioned to lead a new era of self-governing urban development, potentially creating multiple new ‘Hong Kongs’ within its borders.
Healthy competition between such cities would help identify the most effective solutions, which could then be scaled and replicated nationwide.
In a new report for the Institute of Economic Affairs, Economist Vera Kichanova argues that the UK could and should create new self-governing cities like Hong Kong within its borders, to drive growth and prosperity.
Kichanova, a Senior Economist at the Free Cities Foundation, examines examples from across the world where new private and self-governing cities, special economic zones (SEZs) and special administrative regions (SARs) have had huge success in delivering prosperity to their people and the areas in which they are situated.
She criticises the freeports policy of recent years in the UK for being used as a political tool and merely adding another layer of bureaucracy in order to rebalance economies towards certain areas and industries, rather than removing excessive regulation and administration to allow the market to flourish.
Meanwhile, the global context has shifted. The next-generation of special jurisdictions are characterised by wider self-governing autonomy, enhanced role of the private sector and a mixed-use urban strategy that moves beyond the outdated model of single-industry focus. The UK should not ignore these developments.
As of 2020, Hong Kong’s GDP per capita was above $45,000 – more than that of the UK, Canada or Japan, and more than four times as much as that of mainland China. Britain played a vital role in this economic success, so should be able to repeat the feat on its own soil. Its strong institutions of democracy, rule of law and property rights make it fertile ground.
In addition to the direct economic benefits, a self-governing city in the UK could create a liveable community and would unlock opportunities for more regulatory innovation on a local scale, allowing experimentation with policies in contentious areas such as planning. Successes could then be replicated nationwide with a strong evidence base.
While innovations in this field bring benefits across the world today, there are also plenty of historical precedents – including in the UK. The City of London, Canary Wharf, and industrial communities like Bournville have all exhibited aspects of private administrations and special economic zones to beneficial effect.
The success this approach is driving internationally is as widespread as Honduras and South Korea. SARs are used in developing nations to deliver in places the state cannot – there are 15 under development in Africa. However, others that have been founded through land expropriation undermine their own purpose. Special economic zones create prosperity through the respect for property rights and the rule of law, if this is undermined in their founding their success will be limited.
Senior Economist at the Free Cities Foundation and author of ‘Beyond Freeports’ Vera Kichanova said:
“There’s no need to reinvent the wheel — these strategies have already delivered spectacular results elsewhere. The UK has the potential to create its own Hong Kong — perhaps even multiple ones — within its borders. Compared to the achievements seen around the globe, the current freeports model feels uninspired. By leveraging our rich urban heritage, we can develop zones of exceptional economic growth and innovation right here at home.”
Editorial Director at the Institute of Economic Affairs Kristian Niemietz said:
"This is one of those proposals which may sound very radical at first, but it is really just a consistent application of the principles of decentralisation, local self-governance, market-like competition between political jurisdictions, and experimentation with different models of governance. We hope that readers who are interested in these ideas will find value in this paper, even if they do not wish to go quite so far as the author."
Patrik Schumacher, Principal of Zaha Hadid Architects said:
“Vera Kichanova's groundbreaking policy paper on 'Hong Kong-style' self-governing regions is a bold and visionary blueprint for the UK's urban future. As an expert in urban development, Kichanova masterfully highlights how freedom and autonomy can unleash innovation, tackle persistent challenges like the housing crisis, and position Britain as a global leader in urban self-governance. With compelling examples from history and contemporary successes, her proposal offers an inspiring roadmap to transform the UK's cities into thriving, competitive hubs of prosperity.”
Titus Gebel, Founder and President of the Free Cities Foundation, said:
“Vera Kichanova shows in a convincing manner that the UK has missed a chance when designing the Freeports according to a model known since the 1960s. Globally, there are already several thousand competitors with a similar offer. May this excellent article serve as an impetus to reconsider the matter. The UK still has a chance to leapfrog competing special economic zones and create unique economic powerhouses on its own soils.”
About the Author
Vera Kichanova is a Senior Economist at the Free Cities Foundation and a research fellow at the Centre for the Study of Governance and Society at King’s College London. She has advised architects and municipalities across more than twenty countries. Her past roles include working with Zaha Hadid Architects in London, Atlas Network in Ukraine, and serving as an elected municipal councillor in Moscow. She holds a PhD in Political Economy from King’s College London, a Master’s in Public Policy from the University of Oxford, and a BA in Journalism from Moscow State University.