The Defence of the Realm (126 page)

On 10 December the Security Service received intelligence that in early November the Soviet Foreign Trade Bank had attempted to transfer the equivalent of almost US$1.2 million to the NUM via banks in Switzerland and London, but had abandoned the attempt after the Swiss bank began to suspect a Soviet money-laundering operation. The report gave Mrs Thatcher the opportunity a week later to raise the question of Soviet financial support to the NUM, without compromising Oleg Gordievsky, during her talks in London with Mikhail Gorbachev, the Soviet heir apparent.
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Gorbachev ‘claimed to be unaware' that financial support was being given. Subsequent intelligence reports to the Prime Minister indicated that, on the contrary, Gorbachev ‘was among those who authorised payment'.
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By early January 71,000 of the 187,000 miners were back at work. Though Scargill refused to accept defeat and sought further funds from Libya, the end of the strike was now only a matter of time. The miners' return to work in April 1985 was a defining moment in the history of both the Thatcher government and the union movement. It also marked the beginning of the end of counter-subversion as one of the Service's main priorities. The shift in priorities was hastened by the appointment of Sir
Antony Duff as DG just as the strike was ending. At a meeting with Brittan's successor as home secretary, Douglas Hurd, in October 1985 Duff discussed how far counter-subversion could be cut back.
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The main obstacle which Duff had identified to reducing the resources required for counter-subversion was the Security Service's responsibility for vetting, which made it necessary to have comprehensive lists of members of, and people known to be sympathetic to, subversive organizations. F Branch received some 3,000 negative vetting inquiries a day.
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In May 1987 Duff reported to the Home Secretary that, almost certainly for the first time in the Cold War, the threat from subversive groups was assessed as ‘low'. There had, however, been some shift in F Branch work from the declining Communist Party to growing Trotskyite groups, especially the largest of them, Militant Tendency.
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In the short term Militant's growth appeared little affected either by the scathing denunciation of it by the Labour leader, Neil Kinnock, at the 1985 party conference, or by its expulsion from the Party before the June 1987 general election. After a recruitment campaign in the spring of 1986, Militant membership reached about 7,800 (roughly 2,000 more than in 1984).
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At a national conference held on Merseyside, one of its regional strongholds, Militant claimed to have passed the 8,000 mark and to employ 267 full-time workers (as compared with Labour's 180).
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Overtaken by revolutionary enthusiasm, the executive committee convinced itself that Militant Tendency was now poised to ‘prepare ourselves for the future role of leadership of the British revolution and the conquering of power at the earliest opportunity, both nationally and internationally'.
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Despite Militant's expulsion from the Labour Party, three of its members – Dave Nellist, Terry Fields and Pat Wall – were returned as Labour MPs in the June elections, one more than in 1983. All were given a rapturous reception at Militant HQ, which also congratulated itself on the election of a Militant sympathizer, Ronnie Campbell, at Blyth.
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Militant was also confident of its growing ability to penetrate the union movement. In July 1986 a Militant sympathizer, John Macreadie, had been elected general secretary of one of the main civil service unions, the CPSA, with a seat on the TUC General Council (a triumph somewhat marred by allegations of ballot rigging).
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For the past decade, the civil and public service had been assessed as particularly vulnerable to subversive activity. At the end of 1984 approximately 1,800 civil servants and employees of public corporations were identified by the Security Service as having subversive records. The effect of vetting had been to concentrate those judged to be subversives in departments such as the Department of Health
and Social Security, where they had little access to classified information but significant opportunities to cause disruption.
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Duff's report to the Home Secretary in May 1987 on the prospects for subversion, however, was resolutely unalarmist. The threat from Militant and other subversive organizations, as well as from subversive individuals in sensitive areas of public life, was likely to remain low. The DG did, however, forecast that the Trotskyist groups would continue to grow and remain very active.
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Duff's forecast proved too pessimistic. Nineteen-eighty-seven was to be Militant's high water mark. Over the next few years, increasingly impaled on its own ridiculous rhetoric and preposterous policies, the very epitome of the ‘Loony Left' which many mainstream Labour supporters blamed for playing into the hands of the Tories and keeping their own party out of power, Militant saw its appeal and influence dwindle steadily. According to Security Service reports, Ted Grant, the founder of Militant Tendency, came to be derided even within Militant ranks as a ‘Worzel Gummidge' who had ‘lost his marbles'.
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Margaret Thatcher's appetite for intelligence actually increased during her eleven years in office. At a meeting with the new DG, Patrick Walker, in January 1988 she mentioned with approval ‘but some irritation' the President's Daily Brief which Ronald Reagan received from the CIA each day before breakfast. The Prime Minister also seemed annoyed by the fact that, at meetings with Jacques Chirac, the French Prime Minister (later President), ‘Chirac always seems able to come out with some piece of intelligence which she has not received.' Henceforth, it was agreed that the DG should see the Prime Minister every four months.
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What had previously been
ad hoc
and occasional visits by the DG to Number Ten became routine for the first time since the era of Sir Percy Sillitoe. Little of Mrs Thatcher's briefings, however, any longer had to do with subversion, which had been her main intelligence preoccupation when she took office. Walker emphasized to her in January 1988 ‘the low level of the current threat assessment' of subversion. The Prime Minister does not seem to have challenged that assessment.
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8

Counter-Terrorism and Protective Security in the Early 1980s

The Security Service's counter-terrorist responsibilities were sufficiently confusing for Director F to think it necessary in January 1980 to remind the DG, Sir Howard Smith, what they consisted of:

You have responsibilities for the collection of intelligence:

(a) on International Terrorism, its impact on the UK and her interests

(b) in relation to Irish Republican Terrorism:

   (i)  because the DCI is a Security Service officer;

  (ii)  because of our responsibilities for covering the overseas links and source of supply of Irish terrorists;

 (iii)  through our joint effort with SIS in the IJS to collect intelligence particularly in support of the effort to suppress Republican Terrorism in Northern Ireland

(c) on Northern Ireland Protestant extremist and terrorist activities in Great Britain
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Dealing with these diverse responsibilities was made more difficult by the confused division of counter-terrorist responsibilities between F and FX Branches.
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In 1980 Smith reversed the previous priorities of the two branches by making FX the main counter-subversion branch and handing over responsibility for Irish as well as international terrorism to F.
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Illogically, however, Smith decreed that FX remain responsible for all counterterrorist agent-running. Director FX from 1981 to 1984 later acknowledged that, until a further reorganization in 1984 made the Branch's responsibilities solely counter-terrorist, it lacked internal coherence.
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The most straightforward of the Security Service's CT responsibilities was surveillance through a variety of means, in association with local Special Branches, of members and supporters in mainland Britain of Ulster's Loyalist Protestant paramilitaries, most of whom were concentrated in Strathclyde and Merseyside. Neither the UDA nor the UVF had recovered from the long prison sentences passed on some of their leading
British members in 1978–9.
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The Service assessed their general level of activity in the early 1980s as low. It reported to ministers in 1983 that UDA and UVF activities consisted ‘mainly of attempts, frequently unsuccessful, to smuggle arms and explosives to Northern Ireland'.
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PIRA was a much more dangerous opponent outside Northern Ireland than the Loyalist paramilitaries. The Security Service continued to feel hampered in its response to them by the fact that, illogically in its view, the MPSB possessed the lead intelligence role on the British mainland.
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The Service also believed that the Special Branch paid too little attention to long-term investigation. Director FX complained in 1980: ‘Until MPSB's modus operandi changed i.e. until they organised themselves on what we would call a Desk Officer system – involving continuous intelligence study – they would never be able fully to carry out their intelligence, as opposed to police, functions.'
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The Security Service none the less had a larger role to play against PIRA in the 1980s than in the 1970s, partly because of PIRA operations on the continent and arms procurement from abroad – both areas in which the Service had the lead intelligence role. Though the lead intelligence role in Northern Ireland remained with the RUC Special Branch, the position of the DCI as SOSNI's chief intelligence adviser also enhanced the role of the Service. The Irish Joint Section (IJS) Belfast station possessed a combination of human and technical sources (both still classified) which sometimes provided important insights into PIRA policy and operations. Director F, a former DCI, reported to the DG in November 1980:

[IJS] officers are already more directly involved with RUC S[pecial] B[ranch] in producing operational intelligence on all aspects of the security scene in Northern Ireland; and that involvement extends to dealings with SB officers both at RUC HQ and elsewhere in the Province . . . In short [the IJS] is increasingly seen by both Army and the RUC as a significant part of the intelligence gathering organisation in the Province.

. . . The RUC suspicion of the Security Service operations in Northern Ireland apparent some years ago has now gone and the Security Service maintains close contacts with the RUC through two sections, F5 (principally) and F3, which already have an acknowledged responsibility for parts of Irish Republican and Protestant extremism . . .
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The IJS Belfast station was by now wholly funded and mainly staffed by the Security Service.
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There had been a remarkable transformation in the Security Service's view of its role in Northern Ireland since the founding of the IJS eight years earlier. In 1972 the Service had not even been able
to find a credible candidate for the post of DCI, and SIS had taken the lead role in the IJS.
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By 1980, Director F believed that the IJS had outlived its usefulness.
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Though it was not to be wound up for another four years, the Security Service was ready to take sole control of the operations in Northern Ireland which for the past eight years it had shared with SIS.

During the early 1980s ‘international' terrorists, against whom the Security Service retained the lead intelligence role, mounted considerably more attacks in mainland Britain than the Provisionals. Unlike PIRA operations, however, their operations were usually spill-overs from conflicts in other parts of the world, mainly the Middle East, and rarely targeted British interests directly. One of the main problems faced by the Service in confronting international terrorism during the 1980s was the diffuse and often unpredictable nature of the threat. The first major terrorist incident of the decade – an attack on a London embassy – took the Service by surprise. Because of the contingency planning of the 1970s, however, it was far better handled than it would have been less than a decade earlier.

On 30 April 1980 six armed terrorists burst into the Iranian embassy at Prince's Gate in Knightsbridge and seized twenty-six hostages, one of whom was a member of the Metropolitan Police's Diplomatic Protection Group.
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The terrorists, who called themselves the ‘Group of the Martyr' and supported the movement for autonomy in Iranian ‘Arabistan', demanded that ninety-one members of the movement imprisoned by the Khomeini regime (which had taken power in Iran after the fall of the Shah) should be released, that the regime should recognize the ‘legitimate rights of the Iranian peoples', and that a special plane should be provided to carry the terrorists and their hostages to an unspecified Middle East country. If their demands were rejected, they threatened to destroy the Iranian embassy and kill the hostages. According to Margaret Thatcher's memoirs, she and the Home Secretary, Willie Whitelaw, were agreed from the outset on their counterterrorist strategy: ‘We would try patient negotiation; but if any hostages were wounded we would consider an attack on the embassy; and if a hostage were killed we would definitely send in the Special Air Service (SAS).'
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During the eighteen months before the hostage crisis there had been increasing contact between the Security Service and SAS, due in part to the personal friendship between David Sutherland, head of a C Branch section, and Brigadier (later General Sir) Peter de la Billière, the SAS director.
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After the terrorist attack on the Iranian embassy, Security Service officers took part, as usual, in the COBR crisis-management group in the Cabinet Office, chaired by the Home Secretary, which was manned around the clock throughout the hostage crisis.
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COBR was told there was reliable
intelligence that the terrorists had been recruited and trained by the Saddam Hussein regime in Iraq, then at war with Iran.
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Though the regime, unsurprisingly, did not admit responsibility for the operation, the terrorists' demands were publicly supported by the government-controlled Iraqi press.
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