The National Enterprise Board was set up in the United Kingdom in 1975 to implement the Wilson Labour government’s objective of extending public ownership of industry. The plans were outlined in the 1974 White Paper The Regeneration of British Industry and the Industry Act 1975 enacted these measures, establishing the NEB.
By the time that the NEB was set up under the 1975 Industry Act its remit had been modified. Its primary role was now that of providing funds for industrial investment. It also had the specific roles of promoting the rationalization of firms within particular sectors of industry, with stimulating the growth of exports and in assisting the development of small companies. Staff were recruited from a variety of backgrounds from both industry and the City.
It also had the task of dealing with a number of companies which had got into financial difficulty and had already come to the Government for assistance. These were very familiar names – British Leyland, Rolls Royce, Alfred Herbert and Ferranti.
One characteristic of the NEB in its funding of advanced technology activities was that it endeavoured to take a longer term view of the investment and to bring a greater understanding of the technology to its investing and management activities than did the private sector at that time. In essence it set out to fill the ‘equity gap’. Subsequently a number of private sector venture capital and high technology funds were set up (which many of the staff who had previously worked for the NEB joined).
The 1980 Industry Act and new Guidelines restricted the NEB role to a catalytic investment role particularly related to advanced technology and small firms. Throughout its life NEB had also had a regional role. From late 1981 the NEB operated alongside the NRDC under the BTG banner (although its legal status remained unchanged) and in September 1983 the majority of the NEB’s past activity was excluded from the future role of BTG.
One of the first activities of the NEB was the implementation of the Ryder Report, named after the NEB’s new chairman, Lord Ryder, on the future of British Leyland.
After the Conservative Party took power in 1979 under Margaret Thatcher’s leadership, the NEB’s powers began to be eroded. The last Labour-appointed chairman of the NEB was Sir Leslie Murphy, who resigned with his entire board when Sir Keith Joseph (the new industry minister) decided to remove its responsibility for the government’s holding in Rolls-Royce.