The Defence of the Realm (26 page)

In 1930 Ball was appointed first director of the new Conservative Research Department, becoming a confidant of the future Party leader Neville Chamberlain.
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An in-house history of MI5 later concluded that midway between the wars: ‘The pay was small and the prospects such as to make no appeal except to a small number of officers with private incomes. The work itself was light and no one in authority in the War Office or elsewhere was closely interested.'
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With slender resources and little influence in Whitehall, MI5 made only modest strides in strengthening protective security (later defined as ‘all aspects of security that exist for the protection of classified information viz. personnel, physical, documentary, communications and technical security').
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The first recorded interdepartmental protective-security committee meeting took place on 29 July 1926 under Kell's chairmanship. It was convened as the result of two burglaries in the Cabinet Office, at
least one with the apparent aim of purloining classified documents. The meeting's notions of protective security were limited to recommending elementary security measures such as improved control of access to government buildings and the provision of steel cupboards for housing classified documents. There was no further interdepartmental discussion of protective security until 1938.
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Even in MI5 headquarters, protective security was primitive by today's standards. One former employee later recalled that when she joined the Service from Scotland Yard in 1931:

Security was almost non-existent. No one was vetted on joining. In most cases staff were recruited on the basis of knowing someone already employed, though in my case I came in through St James' Secretarial College which had a good reputation as it supplied Buckingham Palace with secretarial staff. No passes were issued and no one was on the door to let us in. The only instruction we were given on joining was that no one, not even our own families, should be told where we worked or for whom.
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In 1929 MI5 had only thirteen officers (including Kell and Holt-Wilson)
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and two Branches (also known as Divisions):
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A, which was responsible for administration, personnel, records and ‘precautionary measures' (later known as protective security); and B, which conducted ‘investigations and inquiries'. A Branch was headed by Major William A. Phillips, who had joined MI5 in 1917 after being wounded on the Western Front and was awarded an OBE for his work as military control officer for ten ports in the English Channel. Despite his injuries, he continued to list his recreations as shooting, fishing and ‘field sports in general'.
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According to an obituary after his death in 1933 at the age of only fortyseven, ‘His natural urbanity and capacity for making new and retaining old friendships in all circles peculiarly fitted him for his special duties.'
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Two of Phillips's four section heads in A Branch were women (though neither had officer rank): Miss Mary Dicker, who ran the Registry as well as being controller of women staff, some of whom later remembered her as ‘very nice, rather beautiful' and formidable;
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and Miss A. W. Masterton, who in the First World War had become the first female controller of finance in any government department.
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The head of B Branch was the forty-three-year-old Oswald A. ‘Jasper' Harker, who had spent the first fourteen years of his career in the Indian
police, rising to become deputy commissioner at Bombay, before being invalided home in 1919, probably after a tropical illness. One of the attractions for Kell in taking on Harker, initially on loan from the India Office in 1920, at a time of heavy cutbacks, was that, until Harker formally resigned from the Indian police in 1923, he did not require a salary from MI5. On joining MI5 Harker gave his recreations as big-game hunting, riding and fishing.
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Secretarial staff and the Registry tended to find him an intimidating figure. One later recalled Harker as ‘a fearsome character',
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another as ‘rank conscious',
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a third as ‘good looking but not clever'.
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The six officers in Harker's B Division included Jane Sissmore, formerly head of the Registry and MI5's first woman officer. In 1929 she was responsible for Soviet intelligence and the only female staff member with an MBE.
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Sissmore later proved a formidable interrogator.
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Though B Division still lacked an agent-running section, Harker had a three-man Observation section (B4), responsible for shadowing suspects and making ‘confidential' inquiries.
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Its head, John Ottaway MBE, had joined MI5 in 1920 after twenty-nine years in the City of London Police (eleven as detective superintendent). The recreations listed by Ottaway on joining indicated that he came from lower down the social scale than most other officers: cricket and tennis rather than hunting and field sports.
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Admiral Sinclair had told the Secret Service Committee in 1925 that Kell's inability to run directly more than ‘informants' obliged SIS to run agents inside the United Kingdom as well as abroad. In December 1929 Desmond Morton recruited Maxwell Knight and his agents to work for SIS. He reported to Sinclair:

[Knight] makes an excellent impression, is clearly perfectly honest, and at need prepared to do anything, but is at the same time not wild. When required by his previous masters, he and two friends burgled, three nights running, the premises of the local committee of the Communist Party in Scotland, the branch of the Labour Research Department there and the Y[oung] C[ommunist] L[eague] HQ.

With Sinclair's approval, Morton despatched Knight around Britain to investigate Communist and other subversive organizations,
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chiefly to uncover their links with Comintern. Morton reported that ‘with every passing month [Knight] got his agents nearer to the target area.'
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Doubtless aware that MI5, as well as the Special Branch, would believe that SIS was trespassing on its territory, Morton advised Sinclair that Kell and William Phillips should not be informed about Knight's investigations. By the summer of 1930, however, both the Special Branch and MI5 had discovered what SIS was up to. Colonel J. F. C. Carter of SS1 (the Special
Branch section which dealt with Communist subversion) told Morton that he had Knight ‘under observation'; Knight noticed the surveillance and suspected that Carter, a wartime MI5 officer (‘recreations: polo, big game shooting') had also told Phillips: ‘Colonel C[arter] then attempted to frighten M[axwell] K[night] off doing this work for Major Morton or anybody else, by suggesting that he could make his life and that of his agents a misery.' The Secret Service Committee was revived in April 1931 to ‘discuss the difficulties that had arisen in the inter-relation between C's organisation and Scotland Yard'.
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Scotland Yard's position, however, had been fatally compromised by MI5's dramatic discovery that the Special Branch had itself been penetrated by Soviet intelligence. Though there were no prosecutions, two officers were dismissed from Scotland Yard in 1929 after a disciplinary board of inquiry.
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At a meeting of the Secret Service Committee on 22 June 1931, Sir John Anderson, PUS at the Home Office, proposed that SS1 and its responsibilities should be transferred to Kell:

MI5 was already responsible for counter espionage not only for the fighting services but for all government departments, and . . . this was a logical extension of its duties. There would thus be only two organisations dealing with secret service work, C covering foreign countries, and MI5 the Empire.
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The proposal was accepted. It was agreed that SIS should confine itself to operations at least 3 miles away from British territory, and that the domestic agencies should operate only within this limit. On 15 October the lead role in countering Communist ‘subversion' was also moved from the Special Branch to MI5 (henceforth officially known as the Security Service), which acquired Scotland Yard's leading experts on subversion. Scotland Yard had defined subversion somewhat more broadly than MI5 and the integration of the two sets of files therefore took some time. The head of A Branch, William Phillips, noted that a number of the categories in SS1 files were not of interest to the Security Service. Some of those in the SS1 files were, in his view, mere ‘Hot Air Merchants'. He also disagreed with keeping files on Scottish nationalists who, in his view, were currently ‘a perfectly sound constitutional movement, aiming at a strictly limited autonomy, similar to Northern Ireland'. Nor did Phillips think it legitimate to open files, as Scotland Yard had done, on atheists, unemployed marchers, mutinous members of the merchant navy, pacifists or policemen who had received adverse reports.
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If the Prime Minister, Ramsay MacDonald, was informed of the change to the Security Service's role in October 1931, he must have been told
informally since there is no written record of a briefing in any Whitehall file.
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The Security Service ceased to be a section of the War Office and acquired an enhanced but ill-defined status within Whitehall as an interdepartmental intelligence service working for the Home, Foreign, Dominion and Colonial Offices, the service departments, the Committee of Imperial Defence, the Attorney General, the Director of Public Prosecutions and chief officers of police at home and throughout the Empire.
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For at least two years there was some confusion about the 1931 reorganization, stemming partly from the fact that the Security Service was still also known by its old title, MI5, thus appearing to imply that it was still a department of military intelligence (MI). Holt-Wilson noted in 1933 that the War Office Directorate of Military Intelligence was ‘only aware in a vague way' of what had happened two years earlier, and that even MI5 had no accurate written record of the changes. He therefore drew up a memorandum ‘to make it clear that the Security Service was no longer in any sense a part of the Directorate of Military Intelligence'.
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The transfer of SS1 from Scotland Yard brought the Security Service a small but important influx of able staff. The two most senior were Captains Hugh Miller and Guy Liddell. Despite his earlier career as an MI5 officer,
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Miller made less of an impression than Liddell. To younger staff in particular, he seemed an old-fashioned figure. Margot Huggins, who transferred from Scotland Yard at the same time, later recalled that ‘He always worked standing up at one of those Dickensian wooden desks with the lift up lid. Not government issue, of course.'
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Miller died after an accident in 1934. His obituary in
The Times
described him as ‘one of Nature's own gentlemen'. Though within a small circle of devoted friends he revealed ‘a never-failing and keen sense of humour', ‘Captain Miller avoided society, and devoted his spare time to gardening and to the care of his valuable collection of Japanese prints.'
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Guy Liddell, who was Miller's executor as well as a distant relative of Alice Liddell, the model for Lewis Carroll's
Alice in Wonderland,
became deputy head of B Branch (counter-espionage and counter-subversion) under Harker (whom he succeeded as its wartime head). Before the First World War, Liddell had studied in France and Germany, and was fluent in both languages. But for the war, in which he won the Military Cross, he might well have become a professional cellist, and he remained a keen cello player throughout his life,
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arranging musical evenings at his flat in Sloane Street. Liddell was much more popular with staff than the sometimes irascible Harker, never raising his voice or losing his temper. His secretary for many years both at Scotland Yard and at the Security Service later
remembered him as a kind, avuncular, ‘rather dumpy', ‘most unsoldierly' figure, despite his MC (of which he never spoke), with an astute mind and good sense of humour.
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Even Kim Philby later recalled Liddell with affection as ‘an ideal senior officer for a young man to learn from':

He would murmur his thoughts aloud, as if groping his way towards the facts of a case, his face creased in a comfortable, innocent smile. But behind the façade of laziness, his subtle and reflective mind played over a storehouse of photographic memories.
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But Liddell's private life was scarred by an increasingly unhappy marriage to the Honourable Calypso Baring, daughter of the Irish peer Lord Revelstoke, whom he had married in 1926. Had he been a less patient man, his colleague Dick White said later, ‘he must surely have strangled Calypso'. Calypso eventually left for California with their four children; the marriage was dissolved in 1943.
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Liddell was quick to recognize the talent of the Service's Soviet expert, Jane Sissmore, whom he regarded as having ‘a rather privileged position as a court jester'.
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A colleague later recalled:

Jane Siss[more] was a lively soul. One never knew what she would do next. I remember her in my room once, knocking on the door of Liddell's inner sanctum and when told to come in dropping to her knees and shuffling in with hands pressed together in prayer to grant whatever request she had.
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Sissmore's successor as the Security Service's most influential woman in the 1940s and 1950s was to be the redoubtable Milicent Bagot, a classics graduate from Lady Margaret Hall, Oxford, who joined the Service from Scotland Yard as a twenty-four-year-old secretary in 1931 at the same time as Miller and Liddell (and is believed to be the model for John le Carré's character Connie). Like Sissmore, Bagot was to become the Service's leading expert in Soviet Communism and its allies, gradually acquiring an encyclopaedic knowledge which impressed even J. Edgar Hoover. Unlike Sissmore, Bagot was never in danger of being described as a ‘court jester'. She was a powerful personality who did not suffer fools or the ignorant gladly; some found her intimidating. Her main recreation was music; she habitually left the office promptly on Tuesdays to sing in a choir.
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