Prime Minister Andy Burnham has rejected a call for a moratorium on new data centres after a Labour MP raised concerns about the growing concentration of projects within one of the Government’s flagship AI Growth Zones.

Ian Lavery, MP for Blyth and Ashington, told Parliament that three ‘vast’ data centres are proposed around Sleekburn and Cambois in Northumberland, arguing that they would occupy scarce industrial land that could otherwise support industries creating more local jobs.

He asked Burnham to support a moratorium “until regulation catches up” and proposed a critical national infrastructure levy so communities hosting major developments could receive a greater share of the economic benefits.

Burnham rejected the moratorium, although his answer left some room for his position to change.

“At this point, I will not go as far as a moratorium,” he said, adding that communities should see the benefits of AI and data centre investment.

Burnham argued that a data centre “can be the magnet that clusters in other investment over time” and pointed to the Government’s AI Growth Zone policy, under which English local authorities will be able to retain growth in business rates generated within designated areas.

Pressure grows inside North East AI Growth Zone

This is the first time the Prime Minister has heard direct opposition to data centre development within one of its flagship AI Growth Zones. These zones were meant to ensure that development of new data centre infrastructure was sustainable, with ample land and power availability. 

The North East Growth Zone, which is partially inside Lavery’s constituency, contains Cambois. That’s expected to be one of the larger developments in the zone – with Blackstone-owned QTS having already begun site preparation work on a £10 billion data centre campus at the former Blyth Power Station site. If fully developed, the project would provide around 720MW across 10 data centre halls.

QTS’ social value pledge includes targets for 1,200 construction jobs and 400 operational roles, alongside apprenticeships, local recruitment and supply-chain investment.

But while QTS was the flagship developer at the announcement of the AI Growth Zone, it’s no longer the only developer targeting the area.  An outline application in June proposes another data centre campus at West Sleekburn, with up to 356,500 sqm of floorspace. A separate proposal at Factory Road in Cambois entered the early planning process in August, although a full planning application has yet to be submitted.

That means the debate in Northumberland is shifting from whether one major data centre should be developed to how much digital infrastructure the area should ultimately accommodate.

Lavery has previously been strongly supportive of the QTS investment. In October 2025, he described the £10 billion project as “great news” and welcomed the inclusion of his constituency within an AI Growth Zone. As recently as May, he said he wanted the QTS development to proceed as soon as possible, while stressing that local people should benefit from the investment.

His position on further development has since hardened. On September 7, two days before challenging Burnham at PMQs, Lavery signed an early day motion calling for a national moratorium on new AI data centres while their environmental, public-health and infrastructure impacts are assessed. The motion, tabled by Labour MP Richard Burgon, currently has 24 signatures.

The Government, meanwhile, has much bigger ambitions for the area. When the North East AI Growth Zone was announced last year, it said the initiative could attract up to £30 billion of private investment and create more than 5,000 jobs.

Those jobs are expected to extend beyond data centre operations into construction, data engineering, AI research and other parts of the technology ecosystem.

Government backs local revenues over development restrictions

Burnham’s answer suggests the Government intends to address concerns over local benefits through the structure of AI Growth Zones rather than by restricting development.

Under current policy, local authorities in England will retain 100% of business rate growth within AI Growth Zones for 25 years. New retention zones are due to take effect from April 2027 in areas without equivalent existing arrangements.

Once sites are complete, the Government estimates the additional retained revenue could amount to around £5 million to £10 million per site each year.

The business-rate measure sits alongside other commitments intended to turn Growth Zones into wider economic clusters, including skills and AI-adoption funding. Lavery’s proposed critical national infrastructure levy is not part of the current AI Growth Zone policy.

Political pressure over data centre development has nevertheless been increasing. Earlier this month, the Green Party called for a moratorium on most new UK data centres, alongside tighter environmental requirements and greater community involvement in planning decisions. The Government rejected that proposal, arguing that stopping development would damage jobs and national security.

That isn’t stopping further momentum in Scotland towards a moratorium, which could deal a blow to one of the UK Government’s other flagship AI Growth Zone in Lanarkshire. While the SNP-led Government has yet to move towards a full-on moratorium, it is keeping a closer eye on the sector as it grows throughout the country.