National Enterprise Board facts for kids

The National Enterprise Board (NEB) was a special group set up by the United Kingdom government in 1975. It was created by the Labour government, led by Harold Wilson, to help the government get more involved in the country's industries and economy. Later, in 1981, the Conservative government, led by Margaret Thatcher, combined the NEB with another group called the National Research Development Corporation (NRDC). Together, they formed the British Technology Group.

Why the NEB Was Created

The idea for the National Enterprise Board came from an economist named Stuart Holland and a politician named Tony Benn in the early 1970s. They looked at a successful Italian group called the Istituto per la Ricostruzione Industriale (IRI), which had helped rebuild Italy's economy after World War II.

The original plan for the NEB was to give the government more control over the economy. It would do this by buying parts of the UK's main manufacturing companies. These companies would then work with the government to meet certain economic goals. Even though the Labour Party didn't fully agree with all these ideas, they were mentioned in their plans for the general elections in February and October 1974.

The Labour Party's plan for the October 1974 election said they wanted the NEB to:

• Manage companies that the public owned.
• Buy parts of profitable manufacturing companies to increase public ownership.
• Encourage new investments.
• Create jobs, especially in areas with high unemployment.
• Help workers have a say in their companies.
• Make industries more efficient.
• Increase exports (selling goods to other countries) and reduce imports (buying goods from other countries).
• Stop private companies from becoming too powerful.
• Prevent important British industries from being taken over by foreign companies in a way that wasn't good for the UK.

They also planned for the government to make "Planning Agreements" with important companies. This was to make sure company plans matched the country's needs. If the government gave money to a company, it would get a share of that company's ownership.

How the NEB Worked

The plans for the NEB were officially announced in a government document called a White Paper in 1974. Then, the Industry Act 1975 made these plans into law and officially created the NEB.

The NEB's main job was to own a significant part of major manufacturing companies. However, the final version of the NEB was not as strong as first planned. For example, the planning agreements with companies became voluntary instead of required. The NEB bought shares in several companies, including British Leyland, Rolls-Royce, Alfred Herbert, Sinclair Radionics, and Ferranti.

What the NEB Did

In reality, the NEB often ended up helping companies that were struggling financially. Sometimes this worked well, and sometimes it didn't. The NEB also tried to help grow Britain's new electronics and computer industries.

One of the NEB's first big tasks was to create the Ryder Report. This report, named after the NEB's first chairman, Lord Ryder, looked into the future of the car company British Leyland.

In 1975, the NEB helped the electronics company Ferranti, which was having problems. The NEB bought 65% of the company, which meant the government effectively owned it. By 1980, Ferranti was doing well again and was sold back to private owners.

In 1977, the NEB also saved Sinclair Radionics from going bankrupt. It gave the company a loan and took control by buying 73% of its shares.

The NEB also helped set up a company called Inmos in 1978. Inmos focused on developing memory and microprocessor chips.

The End of the NEB

When the Conservative Party, led by Margaret Thatcher, came to power in 1979, the NEB's influence began to shrink. The last chairman appointed by the Labour government, Sir Leslie Murphy, resigned along with his whole board. This happened when the new industry minister, Sir Keith Joseph, decided to take away the NEB's responsibility for the government's shares in Rolls-Royce.

The next chairman was Sir Arthur Knight. He was okay with the NEB losing some companies, but he strongly supported the Inmos microchip project. However, he eventually became unhappy with the government's actions and resigned in November 1980. New laws in 1980 limited the NEB's role. It was now mainly meant to invest in advanced technology and small businesses, both nationally and regionally.

Sir Arthur Knight was replaced by his deputy, Sir John King. Sir John King then worked quickly to close down most of the NEB's remaining activities.

In 1981, under the leadership of Sir Frederick Wood, the NEB was combined with the National Research Development Corporation (NRDC). Together, they became the British Technology Group (BTG).

In 1992, the BTG was sold to private companies. In 1995, it was listed on the London stock exchange as BTG plc. It became a leading company that helped turn new ideas and inventions from research groups and companies around the world into real products.

Leaders of the NEB

• 1975–1977: Lord Ryder
• 1977–1979: Sir Leslie Murphy
• 1979–1980: Sir Arthur Knight
• 1980–1981: Sir John King
• 1981: Sir Frederick Wood

See also

• National Research Development Corporation
• Minister of Technology
• Alvey