While in opposition, Tony Benn and his associates developed a radical programme to produce a fundamental 'shift of the balance of power and wealth in favour of working people and their families'. The keystone of this policy was the creation of a National Enterprise Board (NEB), which would hold a substantial level of equity in major manufacturing companies. The government would exercise a greater degree of control over these industries and benefit directly from their success. Companies would engage with the government in compulsory planning agreements through which they would receive public money in return for the negotiation of strategy.
The Labour leadership never fully accepted these proposals. The White Paper of August 1974 entitled 'The Regeneration of British Industry' was unspecific about the precise role of the NEB, although it did specify that planning agreements would be voluntary rather than compulsory. A further White Paper in 1975 moved further away from an interventionist policy and emphasised the importance of the National Economic Development Council as a tripartite negotiating forum. Benn's transfer from the Ministry of Industry to the Ministry of Energy in 1975 signalled a retreat from an interventionist industrial policy.
Nevertheless, in 1975 the National Enterprise Board (NEB) was established through the Industry Act, albeit considerably altered from the original concept. In practice, the NEB continued to support failing companies, of which the car manufacturer British Leyland was a prime example. The British motor industry had suffered badly from foreign competition. By 1970, British Leyland was the sole bulk British manufacturer and was in serious financial trouble by the end of 1974. The Cabinet appointed and accepted the findings of the Ryder Committee into British Leyland. The company went into public ownership in June 1975, absorbing enormous amounts of capital without a return to profitability.
Not all of the NEB's interventions resulted in failure. The electrical engineering company Ferranti was semi-nationalised in 1975, and returned to the public sector as a profitable company in 1980. Labour continued its policy of encouraging regional development. In 1974, Regional Employment Premiums, first established in 1967, were increased. Regional policy was reviewed in a 1976 White Paper. The government encouraged union leaders to sit on company boards, but they were unwilling to cooperate.
In 1977, the Labour government carried out further nationalisations. In the shipbuilding industry it created 'British Shipbuilders', and in the aircraft industry it created British Aerospace.