The Defence of the Realm (141 page)

The exaggerated levels of British official secrecy made it easy for Turnbull to ridicule the government case. Though the existence of ASIS, the Australian foreign intelligence service, was officially admitted, like most other intelligence services around the world, the Thatcher government, like its predecessors, refused to acknowledge the existence of SIS. Armstrong was therefore bound to stick to that position. When reminded by Turnbull that he had admitted that Sir Dick White had been Chief of SIS, he was forced to give the surreal reply that, while acknowledging the existence of SIS when White was at the head of it, he could not admit that it had any prior or subsequent existence. Though Armstrong handled most of his impossible brief skilfully, he was caught out in one minor evasion which was seized on by the media as well as Turnbull. Armstrong acknowledged that, when writing to the publisher of
Their Trade is Treachery
in March 1981 asking for a pre-publication copy, he had failed to mention that he already had a copy from a confidential source. Since he had felt bound to protect his source, he could scarcely have done otherwise. In reply to a question from Turnbull, Armstrong denied that he had lied in his letter to the publisher, but acknowledged (quoting Edmund Burke) that he had been ‘economical with the truth' – a memorable phrase which the media made instantly infamous as evidence of deception at the heart of Whitehall. The Australian cabinet secretary, Michael Codd, in evidence at the trial, offered support for the British case by testifying that, if
Spycatcher
were to be published in Australia, the intelligence agencies of Britain and other friendly countries would be unwilling to exchange secret intelligence with Australia. Codd's evident unfamiliarity with the details of the Wright case, however, made his support somewhat counter-productive. True to form, Turnbull dismissed Codd's evidence as ‘codswallop'. Mr Justice Powell avoided puns but was equally unflattering, describing parts of the cabinet secretary's testimony as ‘complete and utter moonshine', ‘ridiculous' and ‘totally without foundation'.
⁴⁰

A cartoon by Nicholas Garland shows the
Spycatcher
affair leading to shipwreck for the Thatcher government. The cabinet secretary, Sir Robert Armstrong, who had been sent to Australia to give evidence in the
Spycatcher
trial, is already overboard (
Independent
, 26 November 1986).

The government, unsurprisingly, lost its case in the New South Wales Supreme Court. It continued, however, for well over a year to try to maintain and enforce injunctions forbidding publication of extracts from
Spycatcher
by the British media – even at a time when the book was top of the best-seller list in the United States. The Labour MP David Winnick asked the Attorney General whether Wright had yet ‘expressed his gratitude to the British government for helping to boost the sales and publicity of his book'.
⁴¹
The government case for a permanent injunction was successively rejected in the High Court, then by a majority in the Court of Appeal, and finally, in the summer of 1988, by a majority in the House of Lords. The Law Lords accepted the government argument that the book constituted a serious breach of confidentiality but concluded that, since it had already been published abroad, publication in Britain would cause no further damage to national security. The European Court of Human Rights later found that continuing the injunction against publication in Britain even after
Spycatcher
had been published in the United States contravened Article 10 of the Human Rights Convention.
⁴²

The argument that Wright had compromised national security by breaking his undertaking ‘never to disclose anything I knew as a result of my employment' was well founded. The government's decision ‘to pursue the book through every possible legal channel, whether there was any hope of success or not'
⁴³
was not. The affair did lasting damage to the Service's reputation, chiefly perhaps in reviving the conspiracy theory of the Wilson plot.
⁴⁴
Mr Justice Powell appeared to take Wright's unreliable evidence at face value, declaring in his summing up: ‘Mr Wright went to see Sir Michael Hanley and told him [about the plot], and there was some dressed up little enquiry that got nowhere. Michael Hanley took a degree of delight in its getting nowhere.'
⁴⁵
Never before or since has the Security Service suffered the level of public ridicule provoked by the long-drawn-out
Spycatcher
saga. Some of the ridicule came from unexpected quarters. Possibly the most surprising was Edward Heath, who told the Commons that there were officers in MI5 ‘whose whole philosophy was ridiculous nonsense. If some of them were on the tube and saw someone reading the
Daily Mirror
, they would say, “Get after him, that is dangerous. We must find out where he bought it.”'
⁴⁶
Few if any MPs were aware that during Heath's term as prime minister the main pressure for increased surveillance of trade
union militants had come not from the Security Service but from his government.
⁴⁷

The public embarrassments of the Peter Wright affair left most members of the Security Service with the conviction that things could not go on as before. The Master of the Rolls, Sir John Donaldson, said, when giving judgment in an action against newspapers which had published
Spycatcher
extracts, ‘It may be that the time has come when Parliament should regularise the position of the Security Service.' The Service agreed. Its Annual Report for 1987–8 concluded that ‘There is complete acceptance among staff of the desirability of legislation for the Security Service.'
⁴⁸
Ministers took longer to convince. The main credit for convincing the government and senior civil servants of the need for the Security Service Act belongs to Sir Tony Duff. As the Home Secretary, Douglas Hurd, hitherto opposed to legislation, later acknowledged, Duff persuaded him over lunch on 8 January 1987 that ‘the time had passed when the Security Service could successfully operate on the basis that it did not exist. The pretence had worn threadbare, making it increasingly difficult to recruit and train men and women of quality for the Service.'

Duff then thought it would take another two years to win over the Prime Minister and the cabinet secretary. In fact, Sir Robert Armstrong was on side by April, probably as a result of the Leander case as well as his own experience in the New South Wales Supreme Court, but both he and the Foreign Secretary, Sir Geoffrey Howe, believed another year would be required to persuade Mrs Thatcher. In July, however, she agreed to the drafting of a Security Service Bill, though without any commitment that she would accept it. In April 1988 she finally agreed to the draft Bill. Hurd was convinced that Duff's advocacy was crucial: ‘He was one of those good-looking, grand-mannered officials who could exercise great influence over her once they had gained her trust . . .'
⁴⁹

Also influential in changing the government's mind was the case pending before
the European Court of Human Rights brought by two former officers of the National Council for Civil Liberties, Harriet Harman and Patricia Hewitt. In support of their case Cathy Massiter swore an affidavit that the Security Service held files containing personal details on both which, they claimed, infringed their human rights. The case was especially sensitive because Harman and Hewitt were rising Labour politicians.
⁵⁰
Harman was elected as Labour MP for Peckham in 1982; Hewitt joined the staff of the Leader of the Opposition, Neil Kinnock, in 1983. Both later became cabinet ministers under Tony Blair. The Security Service realized that, because of the lack of the statutory basis for its actions which the European Court in the Leander case had held to be essential, Harman and Hewitt were likely to win their case (as they eventually did).
⁵¹

The Queen's Speech of 22 November 1988 announced that ‘A Bill will be introduced to put the Security Service on a statutory basis under the Secretary of State.'
⁵²
The Security Service Act of 1989 at last placed MI5 on a statutory footing, elegantly sidestepping the contentious issue of the previous legal basis for the Service's operations by the use of the brilliantly equivocal formula ‘There shall continue to be a Security Service.' The Service remained under the authority of the Home Secretary. Its tasking also remained quite different to that of SIS and GCHQ. A 1993 briefing for the Queen informed Her Majesty: ‘Unlike the intelligence collection agencies (SIS and GCHQ) which respond solely to outside tasking, the Security Service is required under the Act to assess threats to national security and to deploy its resources accordingly.'
⁵³
The definition of the role of the Service, unlike the 1952 Maxwell Fyfe Directive, referred specifically to the threat from terrorism and the need to safeguard Britain's economic well-being:

The function of the Service shall be the protection of national security and, in particular, its protection against threats from espionage, terrorism and sabotage, from the activities of agents of foreign powers and from actions intended to overthrow or undermine parliamentary democracy by political, industrial or violent means.

It shall also be the function of the Service to safeguard the economic well-being of the United Kingdom against threats posed by the actions or intentions of persons outside the British Islands [the UK, Channel Islands and Isle of Man].

To the statutory authority under HOWs for letter-opening and telephonetapping established by the 1985 Interception of Communications Act, the Security Service Act added the authority, also under HOWs, for ‘entry on or interference with property'. The Director General had a duty ‘to ensure that no information is obtained or disclosed by the Service, except in so far as is necessary for the proper discharge of its functions'. The Act established a tribunal of experienced lawyers to deal with most complaints against the Service save those concerning ‘interference with property', which were referred to the Security Service Commissioner. Over the next few years none of the complaints to the Tribunal and the Commissioner was upheld.
⁵⁴

With the sensational publicity provoked by the
Spycatcher
affair now largely abated, the Security Service Act attracted less public interest and parliamentary attention than the government had anticipated. During the
passage of the Act there were never more than forty-two MPs in the Chamber. Passions in the poorly attended debates ran less strongly than during the passage of the Interception of Communications Bill four years earlier. Even the authorization for ‘entry on or interference with property', which had been thought too contentious to include in the 1985 Act, failed to generate major controversy.
⁵⁵
Within Whitehall, however, the Act was recognized as a turning point in the history of the British intelligence community and was celebrated by a party at Gower Street attended by both Margaret Thatcher and the Lord Chancellor, Lord Mackay. The Prime Minister spent much of her time at the party denouncing media sensationalism over the previous few years.
⁵⁶

The Act left behind unfinished business. All Britain's main intelligence allies now had oversight committees in or associated with their parliaments. In Australia the Director General of ASIO, Alan Wrigley, welcomed the foundation of the Joint Parliamentary ASIO Committee and the office of inspector general of intelligence and security in 1987 as a means of restoring public confidence in ASIO. The lack of public confidence in the Thatcher government's response to the Cathy Massiter and Peter Wright revelations had shown a similar need for an all-party oversight committee in Britain. In 1988 a private conference at Ditchley Park attended by senior politicians from the three major parties and retired Whitehall mandarins (serving mandarins were forbidden to attend) agreed on the desirability of a British oversight committee. The Thatcher government, however, was not yet ready to follow the example of its intelligence allies.
⁵⁷

Section F

After the Cold War

1

The Transformation of the Security Service

What made the greatest impression on many, perhaps most, MI5 staff in the final months of 1989 was not the secret intelligence to which they had access but the images on television news of the fall of the Berlin Wall and the rapid, unexpectedly peaceful collapse of the Communist one-party regimes of Eastern and Central Europe. The Security Service, like all Western governments and intelligence agencies, was caught off guard. The end of the Cold War, the collapse of the Soviet Bloc and the disintegration of the Soviet Union transformed the priorities of the Security Service. It reported to the Home Secretary that ‘between 1989 and 1991, the already declining subversive threat reached a new low and the espionage threat from some countries (with the notable exception of Russia) all but disappeared.'
¹
In the early 1990s the Service became for the first time in its history primarily a counter-terrorist rather than a counter-espionage agency. It could not complete the transition, however, until it gained the lead intelligence role against the main current terrorist threat, PIRA's mainland campaign.