The Defence of the Realm

by Christopher Andrew

  During June and July 1994, there was increasing intelligence and other evidence that the Provisionals were moving slowly towards a ceasefire. When Major returned from his summer holiday on 25 August, the Northern Ireland Office, reflecting the view of the Security Service, confidently forecast that a ceasefire was imminent – though it also predicted accurately that it would fall short of a permanent PIRA renunciation of violence. On 31 August the Provisionals declared a ‘complete cessation of military operations’: ‘We believe that an opportunity to secure a just and lasting settlement has been created . . . A solution will only be found as a result of inclusive negotiations.’ The PIRA ceasefire threatened, if it became permanent, to lead to a drastic decline in counter-terrorist operations and further MI5 staff cutbacks. As the Service’s Annual Report for 1994–95 acknowledged, ‘Pleasure at the ceasefire and the Service’s contribution to it was naturally linked with concern about the implications for job security of the possible eventual demise of one of our core areas of work.’90 Eliza Manningham-Buller, who had succeeded Lander as Director T, was asked by a senior Home Office official ‘how small we could be and remain viable’.91 In September 1994 the Management Board discussed a paper with the gloomy title ‘Viability: What is the minimum size at which the Security Service remains viable?’, and concluded after a worst-case analysis that the irreducible minimum would be a Service of about one-third its current size – between 600 and 735 staff.92 Director H, Stephen Lander, argued that, even if cut back drastically, as had happened between the wars, ‘History shows that the Service can expand effectively from [a] reduced base to meet new threats.’93

  A ‘reduced base’, however, was a highly undesirable option. Lander and Rimington were agreed that, if the PIRA ceasefire held and there was a substantial decline in counter-terrorism, the Service was faced with two stark choices:

  (1) Do nothing and accept significant reduction in size of Service; or

  (2) Move towards acquisition of new work, e.g. in Organized Crime, by one of two routes:

  • ‘Big Bang’ (immediate and overt bid for an expanded role)

  • Incremental, undisclosed approach

  The Board decided in favour of the incremental approach. The Service should expand its role by ‘developing creatively work at existing boundaries, and by lending “packages” of Service skills/techniques to police and other agencies’. So far as possible, however, this had to remain for the time being a secret strategy – even so far as most of the Service was concerned. Lander’s speaking notes (agreed with the DG) for briefing the Senior Management Group (SMG) concluded: ‘Service’s strategy will become visible in part through pushing out at edges – but it will fail if complete intentions are revealed prematurely – therefore essential that SMG does not disclose this agenda to any other staff at this stage.’94

  The most dramatic proposal for a changed role considered by the Security Service management was for amalgamation with SIS. Though neither the Service nor SIS had any enthusiasm for amalgamation, both gave it detailed consideration in 1994 chiefly because they anticipated that the issue might be raised by the newly founded Intelligence and Security Committee (ISC). Both Services decided against it. In arguing the case against amalgamation, the Security Service, probably for the first time, defined its own work culture:

  The Security Service’s culture is based largely in its traditional role of operating as a relatively small, politically independent national institution secretly defending Britain against covert, hostile adversaries. This, perhaps especially the element of operational secrecy (which mostly remains) and its small size, has given rise to a familial or club atmosphere and a generally considerate management style. Management operates more commonly by consensus than by edict, historically somewhat inclined to paternalism. The Service is a compassionate employer. In general, staff are committed, loyal and enjoy a strong sense of identity as members of an organisation they perceive as special. They identify with the Service’s protective/defensive role. Staff have high standards of honesty and integrity. Core staff are team players. About half are women. There are strong traditions of intellectual horsepower and analytical ability. Operational capability against hard targets and close engagement with Whitehall have more recently become significant factors in the Service’s culture. The Service has tended to undersell itself in Government.

  The Security Service review recognized that SIS had traditionally been better at selling itself to government: ‘Staff value the respect SIS commands in Whitehall and in the international intelligence community.’ SIS also had a different work culture:

  SIS has a culture that attaches greatest importance to individual achievement in operational work. Officers are required to be independent self-starters to operate effectively in small overseas stations in potentially, or actually, hostile environments. Whereas Security Service G[eneral] I[ntelligence] D[uties] officers tend to be team players, SIS I[ntelligence] B[ranch] officers are more likely to have a ‘fighter pilot’ mentality . . . Officers tend to be assertive and self-confident.95

  To the relief of the Service, the pressure from the ISC for amalgamation with SIS which had prompted the review did not materialize. The remaining MI5–SIS joint sections96 became victims of the budget cuts and were dissolved.

  During 1995 the Management Board continued to plan a cautious expansion of the Service’s areas of work as a strategy for protecting it from further cutbacks. Of the four main areas discussed by the Board at intervals over the previous few years, there was no enthusiasm for operations to defend the UK’s ‘economic well-being’ or to counter the threat from animal-rights extremists. The threat to the UK’s economic well-being was judged to lack the ‘hostile, strategic, intention’ which would justify the Service’s involvement, while animal-rights activists, despite having ‘the potential to cause grave damage to people and property’, were ‘small in number and lacking in coordination’.97 The two favoured areas for expansion were counter-proliferation and support for the police against serious organized crime (especially drug-trafficking). A small counter-proliferation unit, K10B, had been set up in 1991, though it did not become self-standing until 1994.98 SIS and GCHQ, however, had more important counterproliferation roles and the Service was disinclined to devote major resources to it. The main discussion in 1995 focused on operations against serious organized crime. ‘This’, Stephen Lander recalls, ‘had the support of Ministers, who had been won over by our work against PIRA. We could demonstrate an unusual combination of analytical skills and operational ability, plus high quality of staff.’99 The 1989 Security Service Act was amended in 1996 to allow the Security Service to act in support of the police in serious crime investigations.

  PIRA’s sudden and dramatic announcement of the end of its ceasefire on 9 February 1996 largely removed the Service’s fears of further cutbacks in its budget. Two months later Director H, Stephen Lander, succeeded Rimington as DG. Lander had been a pupil at Bishop’s Stortford College, which had previously produced both one of the Security Service’s most distinguished DGs, Sir Dick White, and its best-known maverick, Peter Wright. Aged forty-eight at the time of his appointment, Lander was the youngest DG since White (who had been forty-six) and the only DG appointed from within the Service who had not previously been DDG. He was also the first (and so far the only) DG with a PhD. After taking a BA in history at Queens’ College, Cambridge, he had written a dissertation on the diocese of Chichester during the English Reformation which won him, against stiff competition, a post-doctoral post at the Institute of Historical Research at London University. In 1975, however, having decided against an academic career, Lander joined the Security Service.

  When Stella Rimington became DG in 1992, though impressed with Lander’s work against PIRA as Director T for the past two years, she did not yet think of him as her likely successor.100 By 1995 she had changed her mind. It was clear to Sir Richard Wilson, then PUS at the Home Office (later cabinet secretary), that Lander, whom she took with her to
meetings at the Home Office ‘to bring him along’, was now her preferred candidate.101 Before such meetings, however, she tried to spruce him up: though visibly ambitious, Lander struck Eliza Manningham-Buller as ‘a man completely without personal vanity’ who paid little attention to his appearance.102 Rimington saw all the directors individually and asked them their view on the succession. Lander mentioned one of the DDGs – whereupon, he recalls, Rimington ‘made a face’. Some weeks later, to his surprise, she told him he was the best candidate and that most of the Board would support him, though he would have to go on ‘some bloody course’ to learn more about top management.103 In 1996, unlike 1992, there was a formal selection process with interviews of shortlisted candidates by a panel of senior mandarins, chaired by the cabinet secretary, Sir Robin Butler. Though the other candidates included one of the DDGs and two senior outsiders, Lander was the unanimous choice of the panel. Lander probably owed his reputation chiefly to his record as Director T at a critical time in counter-PIRA operations. He struck Sir Richard Wilson as ‘knowing Northern Ireland like the back of his hand’. As both PUS at the Home Office and later as cabinet secretary, Wilson found Lander ‘straightforward, with a nice line in slightly witty understatement but not an ounce of show business – very easy to deal with’.104

  At Rimington’s final meeting with the Home Secretary before retirement, on 20 March 1996, she replied, when asked for ‘any last thoughts’, that ‘In her view, the Service was probably quite significantly short of the staff it needed to be able to cover effectively all the tasks it now had.’105 With more money in the 1996 bargaining round, the Service began to grow slightly once more, but it was not until after 9/11 that it returned to, and then surpassed, its size at the end of the Cold War.106 Though the Service’s work against serious organized crime started only in October 1996, demand for its assistance quickly began to outstrip the resources available. In the financial year 1997/8, the first full year of the Service’s anti-crime operations, its intelligence helped in the recovery of over 50 kilos of heroin and in bringing about sixty-five arrests – chief among them that of Paul Ferris,107 described by BBC Scotland as ‘former king of the Glasgow underworld’ and on the cover of his own memoirs as ‘Glasgow’s most feared gangster’ with a ‘capacity for extreme violence’. Strathclyde police told the Service that they ‘had been pursuing Ferris for many years without result’.108 Investigation by the Service revealed that he was also involved in a London criminal network. On 23 May 1997 Ferris was caught redhanded in London. In the boot of his car police found three MAC-10 sub-machine guns capable of firing 1,200 rounds a minute, two sawn-off shotguns, a Thompson sub-machine gun, handguns, silencers and ammunition.109 Lander wrote to Sir Richard Wilson, then PUS at the Home Office: ‘I have been encouraged by the smooth running of this operation, and by its overall success . . . I understand the police are delighted with our contribution. More of the same to come I hope.’110

  During the trial, A4 surveillance reports were read out in court and were not challenged by the defence.111 Ferris claims in his memoirs that before his arrest, ‘For two years I’d been watched by MI5 in what they called Operation Shillelagh.’112 In reality, the Service had become involved only in December 1996, five months before his arrest, at the request of the Strathclyde police, who said that Ferris had made himself ‘untouchable’.113 In January 1998 Ferris, who had no previous convictions, was given a jail term of ten years for trafficking in guns and explosives.114 Operation SHILLELAGH was the first serious organized crime case in which the Service’s involvement became public knowledge. About threequarters of Service crime investigations were drugs-related, including associated money-laundering, with police and public-service corruption accounting for another 10 per cent. By July 1999 the Service had successfully completed about half of the sixty investigations requested since October 1996 by law-enforcement bodies and was devoting about 8 per cent of its resources to them. With demand for its assistance increasing, it expected that figure to rise to over 10 per cent115 – an expectation which was to be undermined by 9/11. Because of the increasing priority of counter-terrorism, the Service’s involvement in anti-crime operations was to last less than a decade.116

  A Security Service Staff Attitude Survey in February 1997, the first since 1993,117 indicated that the cutbacks and changes of the mid-1990s had taken some toll on morale. The morale of about 25 per cent of the Service was judged to be high (or very high), that of about 50 per cent to be ‘moderate’, and that of about 25 per cent to be low (or very low). Those who felt morale had declined in recent years were almost twice as numerous as those who felt it had risen.118 Among reasons given were:

  • ‘Constant change as we have had over the last five years is not good for morale.’

  • ‘Recent changes have improved efficiency but at the expense of the camaraderie which used to be the Service’s main asset.’119

  By the spring of 1997, for the first time in its history, the Service had decided to begin advertising openly for recruits – mainly in the belief that this was now the best way of attracting high-quality staff. To minimize political controversy, however, it was decided to delay the advertising campaign until after the general election of 1 May which ended in a landslide victory for Labour under Tony Blair.120 The first advertisement for jobs in the Security Service was placed in the Guardian on 21 May 1997 by the advertising agency Austin Knight, which had earlier devised anonymous recruiting campaigns for the Service.121 It was headed ‘intelligence. Use it to create waves and prevent repercussions’ and carried a striking image of the ripples in a pool caused by drops of intelligence.122 Lander personally amended the copy to correct the grammar.123 The response to the advertisement exceeded all expectations: 12,000 telephone calls to Austin Knight on the first day, around 20,000 by the end of the week, and a final total of well over 30,000 – more than double the number who had responded to the previous record-breaking campaign of Austin Knight’s parent company to recruit two British astronauts.124 The DG’s Newsletter reported that ‘The overwhelming majority of the media coverage was positive in tone and generally supportive of the Service (if occasionally frivolous). This would not have been the case a few years ago, when media reports about the Service were almost invariably ill informed and hostile.’ On this occasion, despite many applications from ‘high quality candidates’,125 only four were recruited.126 Advertising campaigns, however, quickly became central to Service recruitment. ‘Both the ease of recruitment and the motivation and quality of our recruits’, wrote Lander five years later, ‘have improved greatly as a result.’127

  The advertising campaign had the additional advantage of extending the Service’s openness policy – as did the decision in 1997 to begin releasing its early files to the Public Record Office. Some of the favourable publicity generated by the Service’s public recruitment campaign and other aspects of its openness programme was undone as a result of the allegations made by David Shayler, a disaffected officer who left in October 1996 after an undistinguished career lasting less than five years.128 Sir Richard Wilson found both Lander and Eliza Manningham-Buller, who became DDG in 1997, ‘desperately upset’ by what they regarded as Shayler’s treachery: ‘It really got to them.’129 The dilemma, Lander reported, was that:

  While his allegations of Service impropriety and incompetence do not stand up to close scrutiny . . . it has not been possible for the Service to put the public record straight for fear of undermining the legal actions in train and also of compounding the damage to sources and methods already caused by his revelations.130

  Among Shayler’s claims taken up by some of the media were that SIS had told him it had been involved in a plot to assassinate Qaddafi; that, but for MI5 incompetence, PIRA’s hugely destructive 1994 bomb attack on the NatWest Tower in Bishopsgate131 could have been prevented; that MI5 was involved in the attempted blackmail of a Libyan student who was secretly filmed having sex and taking drugs; and that Peter Mandelson MP had been suspected of bein
g a Soviet ‘sleeper’ and his phone had been bugged.132 In Lander’s view, the injunction obtained by the Attorney General against the publication of information derived from Shayler by the Mail on Sunday in August 1997133 ‘stopped the media feeding frenzy in its tracks’. After the injunction had stemmed the flow of information, the Service was ‘able to put the record straight to ministers privately as new allegations seeped out’.134 In Sir Richard Wilson’s view, the fear of the Service leadership that the Shayler affair might turn ministers against them was exaggerated; neither they nor Whitehall regarded it as more than a minor irritant.135 After seeking refuge in France for three years (four months of which were spent in jail after the issue of an extradition warrant), Shayler returned to Britain in 2000 and was sentenced to six months’ imprisonment on official secrets charges.