View from City Road: A shipyard destined to sink

The fate of shipbuilding on Tyneside has been in the balance for years. Another few weeks, while Swan Hunter breathes its last, won't make a difference. Perhaps it is time to accept that the yard is doomed to close.

Indeed, once that emotional link with the past has been severed, it will be easier to shift the focus to rebuilding the region. Swan Hunter may have had a great history and a skilled workforce, and its great days are commemorated in many wonderful grainy photographs in the archives. But the same can be said of Rosyth and Devonport. Nostalgia is no reason to keep open a shipyard.

It is harsh on those who have lost jobs, but there are simply too many shipyards chasing too few orders. Cuts in European Union subsidies and government spending made it inevitable that someone would draw the short straw.

New orders coming to European shipyards are plummeting. European yards are typically 20 per cent more expensive than their main competitors, Korea and Japan.

Swan Hunter's tender for the vital Sir Bedivere refit contract was pounds 10m above that of the winner, Rosyth, a large gap given that the size of the order was only pounds 40m. That says something about the yard's productivity.

Furthermore, companies have not exactly been queuing up to buy Swan Hunter. Only CMN, the French group, is prepared to buy it and then with guaranteed work for only about two years.

Rival British shipbuilders were not interested in Swan Hunter because it was outdated, the inevitable result of a long period of under-investment.

Like Corby or Consett, once dependent on single industries, Tyneside is being re-built around a diversified economy. The closure of Swan Hunter should be seen as part of that transition. The Government should help to soften the blow, but was right not to bail out a sinking ship.