Hi Simon,
may have got he wrong arm... B&O were twix and between arms and cartridges at the time. I take it this is the thin arm but with the MMC20* type cartridge?
A couple of things (ignore them if you've already done so and they are tooooo obvious just trying to cover bases):
Are the transport screws properly down?
Will the arm lower beyond the record level when you've started playing... switch off the power and carefully manualy lift the arm off the record and see. If not the is a small grub screw in the U shape of the carriage which adjusts the height.
Finally setting the balance is done by (with the cartridge attatched) turning the black cylinder weight until the arm balances... then hold this tight and move the silver part showing the weights to zero. Then set the weight for your cartridge.
Hope that helps
Kevin