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Mr. Campbell-Savours: Like the right hon. Gentleman, I am leaving the Committee. The role of the Chairman could be reinforced. The Security Service and the SIS should seriously consider the right hon. Gentleman's remarks. There are many occasions on which it is imperative for them to make statements but they cannot do that. They should use the Chairman of our Committee to do it when they can assure us that the information is absolutely correct.

Mr. King: I am grateful to the hon. Gentleman, who knows the occasions on which it has been possible to say

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something. Sometimes, I have been approached to make a statement, which would have been helpful, but we did not have the requisite information. On those occasions, I was not prepared to compromise the integrity or the value of our Committee. One of the valuable roles of the Committee is giving the public confidence in the agencies.

One incident is graven on my heart. An editorial in The Times was widely believed to have been written by me--it was not--after the Mitrokhin investigation. The matter had been blown up out of all proportions in some quarters. We were able to investigate it because we were given access to all the information. We made one or two tough criticisms. I paraphrase the editorial, which said that although the agencies might feel a little bruised about some of our comments, they gained from the exercise because they were seen to be subject to a system of independent scrutiny by independent parliamentarians who had generally given them a good report and paid tribute to them where it was due.

We stated that the retrieval of the Mitrokhin archive was an outstanding achievement. Our praise was qualified by specific criticisms of some of the subsequent handling. However, the praise and criticism encouraged public confidence.

We have evolved a unique oversight system in this country. We take some interest in the systems that other countries operate, and we are especially familiar with the exhaustive American system. We are also familiar with the systems in Germany, France, Italy, Australia, New Zealand, Canada and our other allies. We recently visited Moscow, where oversight of the intelligence agencies is at an early stage. We visited the Duma security committee, several members of which had considerable experience of security arrangements in the former Soviet Union and Russia. Clearly, developments are occurring, and they will lead to increased democratic oversight of the agencies in future. As both Secretaries of State know, there is a genuine willingness in Russia to seek further co-operation with this country on subjects of common concern such as international organised crime.

We do not claim perfection, but we have a unique system. The Executive authorises, the judiciary verifies and our Committee, made up of parliamentarians, oversees. We have developed our role and our operating practices, which are not set out in legislation. There is no point in considering only the three agencies; we must consider the whole intelligence community. There is no point in considering GCHQ without ascertaining out its customers' view of its performance. If the Defence Intelligence Staff of the Ministry of Defence constitute its biggest customer, it is important that it is in our ambit. We regularly have sessions with the Chief of Defence Intelligence and his colleagues.

We are also involved with Customs and Excise and the National Criminal Intelligence Service, which are also of interest to the Select Committee on Home Affairs. Work on serious organised crime is increasingly being co-ordinated.

We have lengthened our reach by appointing an investigator with Government agreement, which was given readily and is appreciated. I pay tribute to John Morrison, the investigator for our Committee, for the work that he already done and that he will continue to do. He has been a valuable addition to the Committee.

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I spoke about the brevity of the legislation and the extraordinarily limited nature of our blueprint. The greatest part of it details the reasons why we should not be given information, and the powers to withhold it from us. I am glad that that is being increasingly ignored for reasons that I mentioned earlier. The heads of the agencies and their colleagues increasingly appreciate that if they want us to have a sensible and full understanding, we need the most comprehensive information. We have tried to secure that build-up of trust, and to ensure at all times the security of the information that we receive. There has hardly been an incident that could lead the agencies justifiably to claim that we had not kept information properly and securely.

Overseeing the agencies' finances is one of our responsibilities. When I was a Minister, there were extraordinary limitations. There was a single intelligence vote, a single line and little proper understanding of the agencies' finances. I would like to claim that we have made a major contribution, ably supported by an arrangement, which was not scheduled in the legislation, with the National Audit Office. Its representatives sit in and advise on our hearings and investigations into the agencies' budgets and finances.

The schedules in our reports are impossible to read because they are full of asterisks. However, they set out the range of financial matters that we cover. All the details are given to the Committee and they are also available to Ministers.

We have taken a great deal of interest in international aspects. If I were to make a comment that is not in our reports--we are currently conducting our annual reviews, which include a review of the agencies' budgets--I would convey to the Secretaries of State a concern felt by the Committee about something that applies not just to the agencies but to every Department in which I have been involved.

The finance function tends to be included in part of the administration of a Department. Someone who is promoted in administration is suddenly told, "You are now the principal finance officer". No one would appoint the chief scientist on the grounds that he was a splendid layman with no scientific experience whatsoever. I think we are entitled to be concerned about the financial qualifications and experience possessed by people who are responsible for financial matters at very senior levels.

That is a firm impression that the Committee has recently formed. I think it important to put it on record because we are dealing with substantial sums of public money, and it is felt that there is on occasion something of a layman's approach to financial issues.

That brings me to the biggest construction project that the intelligence agencies have ever undertaken. The Foreign Secretary referred to it, and we have drawn attention to it. Progress has been pretty mixed so far, as the Foreign Secretary will know: he will be aware of some of the embarrassing events that are mentioned in our report. He will know, for instance, of the extraordinary gyrations in the sums--substantial sums--involved in the costs of the transition to the new building.

We hope, and believe, that project management is much stronger than it was, but we know that the task is still exceptionally challenging. Neither Thames house nor Vauxhall Cross represented the happiest of events in terms of financial control; then the new GCHQ

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accommodation building came over the horizon, dwarfing both those earlier major construction operations in terms of cost and complexity.

The Chairman of the Foreign Affairs Committee unkindly suggested that we had taken no interest in the recruitment processes of the agencies. In fact, we have taken a keen interest. During almost the whole period the Committee has been in existence, we have felt disappointment and regret about the difficulties and concern that can be caused by just one or two disaffected personnel. Such people can cause considerable problems for the agencies--and, I suspect, a considerable amount of work for Secretaries of State. I shall not comment in detail on two specific events, but Members will know that I refer particularly to Messrs Tomlinson and Shayler.

We were greatly concerned by the issue of recruitment, and the challenges and difficulties that would be caused by the appointment of the wrong people.

Mr. Donald Anderson: My remark was not meant to be unkind. I was referring to paragraph 8 of the Intelligence and Security Committee's interim report, published this month, which refers to

Recruitment was not mentioned, which I thought a little surprising in the light of the events involving Shayler, Tomlinson and others.

Mr. King: Sadly, those issues have been with us for a long time, as the right hon. Gentleman will see if he looks at our earlier reports. People who left the agencies some time ago have been causing difficulties, and giving rise to concern, for a long period.

An abiding theme of our considerations has been recruitment, along with the issues of vetting--including review vetting--and general security. Admittedly, there is a sense in which we could take pleasure in that. During our time, there have been some appalling breaches of security; but they have taken place in the United States, not here.

A deadly comment was made by Mr. John Deutsch, who used to be director of the Central Intelligence Agency. He said, "It is a terrible thing to find a spy in your organisation. The only thing worse is not to find a spy in your organisation". We have continually emphasised the importance of establishing the tightest possible vetting and security scrutiny, but we live in a world in which the same pressures exist. According to the newspapers, the Prime Minister recently made representations to President Putin about the amount of Russian espionage activity in the United Kingdom. I do not know whether that is true; but our Committee has expressed concern about the degree of Russian activity in earlier years, and about the number of intelligence officers believed to be operating in this country.

In any event, there is no doubt that we shall be exposed to the same pressures as the United States. The ambitions of Russian intelligence services will be the same here as they are in the United States--in the shape of Mr. Aldrich Ames, Mr. Harold Nicolson and Mr. Hanssen.

We in the Committee have observed the way in which the role of the intelligence and security agencies has changed. The Foreign Secretary mentioned the challenges faced in Sierra Leone and the Balkans. My hon. Friend

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the Member for East Hampshire (Mr. Mates), speaking of military intelligence, said that in the old days of the cold war he hardly needed a map when he had to take part in military exercises on a German plain. When today's forces are put in harm's way, in territories that they have never been near before, high-quality advance intelligence is essential, and the promptness and relevance of such intelligence has certainly increased.

The agencies have an increasing role in dealing with organised crime. In the foreword to our main report, I referred to the Committee's visits to Dover, where we spoke of the fragile nature of our controls. We discussed illegal immigrants, and drugs. We saw something of the arrangements that were in place, and agreed that they were fragile enough anyway and, without intelligence, would be virtually non-existent. We said that before the terrible tragedy involving a container-load of dead Chinese immigrants. The traffic in immigrants was not fully identified until that tragedy, of which we knew nothing, was revealed to the British people. It underlined the scale of the challenge presented to intelligence agencies--that they must try to combat the sophistication and determination of big international gangs.

We also referred--as did the Foreign Secretary, in graphic terms--to the problems of information warfare. It is possible to shut the country down with no need for a bomb: a good computer hacker can often wreak, or at least threaten, far greater damage. I do not want to become involved in an argument about whether the Government coped better with the Anna Kournikova virus than they did with the love bug--that is the sort of language now creeping into our discussions--but as we pointed out, the House of Commons, ancient institution though it may be, was more on the ball with the "love bug", and gave earlier warning, than the great UNIRAS--unified incident reporting and alert scheme--which was supposed to warn every Department. The Committee went to America shortly afterwards and we observed that the slowness of the official system to warn the United States meant that people had got out of bed and switched on their equipment only for the virus to get into it as well before the British warning arrived. I am pleased that when a further major virus attack came, it was dealt with much more promptly.

The role of the intelligence agencies and the continuing importance of their work in the world is recognised and accepted in the Committee. Changes are occurring in international terrorism: there is an on-going threat from and serious concern about breakaway elements in the republican movement and the continuing heavy burden that they represent. The Security Service thus has a role to play in respect of the continuing need to acknowledge the threats posed by foreign intelligence services.

I was interested to read today's announcement that Mr. Sergei Ivanov, who some of us met recently, has become Russian Minister of Defence after being transferred by Mr. Putin from his position as secretary of the National Security Council. He is a former KGB colleague of President Putin's, so the influence of the intelligence community in the new Russian Government is real.

We have discussed the importance of agencies working together on different issues, organised crime in particular, and such developments and changes mean that, although they are separate, they must co-operate more closely. The Government are encouraging that and we also support it. That is one reason why my Committee attaches

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importance to the Ministerial Committee. I know that there is full access and that all the Secretaries of State attach proper importance to the work of the agencies for which they are responsible, but we are looking for more joint, co-operative working.

I am sure that the Foreign Secretary and the Home Secretary would pay tribute to the work of the Security Service, but it is important that the role played by the agencies be fully considered; and we believe that, as a minimum, there should be an annual ministerial meeting chaired by the Prime Minister so that the agencies' work in their combined role as our intelligence community, which plays an increasingly important part in the uncertain and thus more dangerous world in which we live, can be pursued and recognised at the highest level.

I shall leave to my colleagues who want to pick up individual points our concerns about the Official Secrets Acts and the need to ensure that we have relevant protection in place. There are secrets that need to be kept and the Foreign Secretary put it very well: nobody will entrust us with their secrets, which they may risk their lives to give us, if they believe that we are not a trusty and secure home for those secrets.

There is interest in freedom of information and a feeling that there is unnecessary and excessive secrecy. There are good arguments to be made on both sides, but we must not go so far as to say that there is no longer any need for the basic protection of essential secrets. It would be enormously damaging to the security of our nation if it was thought that we no longer regarded any information as secret and put it all in the public domain.

We have had the opportunity, which is given to few, to launch a new function of parliamentarians, set up a new Committee, and build a new relationship with our intelligence and security agencies. I place on record my personal thanks to the Clerks who have served our Committee. When one goes to the United States to meet the House Intelligence Committee, one sees that it has a 30-strong staff. One then meets in the Senate another 30-strong staff, as well as the 30 staffers working for the Congressmen on the Committee and the 30 staffers who serve the Senators. One begins to realise a sense of scale.

I offer my personal gratitude to two individuals, Jonathan Alden, our first Clerk, and Alistair Corbett, who took over from him, and the teams that have worked with them, which are minute compared with those in the United States. I know that the whole Committee will join me in expressing appreciation for the work that they have done.

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