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17 July 2008 : Column 487

Our report shows that there has been a substantial real-terms increase over recent years in the single intelligence account, which funds all the agencies. That is set to continue: according to the 2007 comprehensive spending review, the SIA for this purpose will increase from £1.85 billion in 2008-09 to £2.15 billion in 2010-11. Obviously, those are very large sums of money, but I welcome the increased investment by the Government in this important matter. It is a necessary response to the continuing and pervasive threat posed by international terrorism.

The Security Service has estimated that there are at least 2,000 individuals in the UK who pose a direct threat to our safety and public security because of their support for the al-Qaeda form of terrorism. That figure has increased since 2005, and I expect it to continue to do so. Evidence suggests that attack planning in Europe has increased over the past 12 months and there has been recent media coverage of a number of foiled plots. It is said that the threat will last for at least a generation.

These can be fragmented terror groups that plan random plots, but they are often co-ordinated, sometimes from abroad. They boast sophisticated technical know-how, and they are united in their pursuit of extremist ideological ends that are anathema to basic tenets of our democracy. Their willingness to kill indiscriminately, en masse and without prior warning makes this a more extreme form of terrorism than anything that we have experienced previously. Given that the threat posed by terrorism is an amorphous and changing one that franchises, morphs and spreads, there is a question about the most suitable structures through which our response is to be channelled.

I shall leave that question to one side, though, as it is clear, however one slices it, that this is a serious and sustained threat. It is important that the agencies continue to receive adequate financial support as their work becomes more complex and challenging. They are literally in the business of saving lives.

The unprecedented increase in funding means that it is more appropriate than ever that suitable mechanisms of accountability are in place. We are, after all, dealing with public money. The sensitive nature of the agencies’ work should not, of course, preclude them from being subject to appropriate management and financial disciplines. In any organisation, major increases in resources can lead to inefficiencies and waste rather than value for money and discipline. Expenditure projects that previously did not quite come up to the mark and were found to be below the line can now be dusted off and, relatively speaking, found to be above the line and brought forward.

The annual report that we are discussing notes the Committee’s satisfaction, with some caveats, that public money has been put to the best use and subject to appropriate auditing practices and efficiency targets. However, whether the efficiency targets are appropriate is another question, which again I shall leave to one side for the moment.

By its nature, the ISC is the only body that can take the oversight role. To ensure that money continues to be appropriately and well spent, I think that we need to take an even more hands-on approach in that regard. We need to review constantly, rather than retrospectively, the financial situation within the agencies and how money is spent. We are in discussions about how we do that, but there is obviously no point in closing the stable door. One option, in line with the Government’s proposals
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for reform of the Committee, would be to include a special financial investigator as part of the pool of investigators, and that would strengthen the research capacity of the Committee in that regard.

Mr. Kilfoyle: I am very interested in what my hon. Friend is saying. How does he perceive the interface with the Public Accounts Committee? Is there a role for it in terms of improved accountability, given the increased expenditure of the intelligence services?

Ben Chapman: I think there is scope for liaison. We do, of course, draw on the resources of the National Audit Office in our work of oversight. We need vetted people to help us and there are a limited number of those in the NAO but none, to the best of my knowledge, in the PAC.

The point is also relevant to the more general question of resource allocation and whether funding is sufficient. I suspect that the question about whether the funding is enough is probably unanswerable, but given the gravity of the threat faced by the UK, we must be confident that additional funds are appropriately distributed and targeted. We must be careful to ensure that, in rightly focusing resources on the threat of terrorism, we do not neglect to think carefully how best we can use total funds. For instance, the Committee, and hon. Members earlier in the debate, have expressed concern that the recent recruitment drives launched by the agencies—a significant reason for the increased expenditure—may lead to a dilution in the quality of staff and to grade inflation. Over 2007-08, for example, the Security Service aimed to supplement its existing 3,200-strong work force with an additional 690 officers—an increase of 20 per cent. We obviously should not prize quantity above quality, but again we are assured, and we accept, that the issue is being managed effectively. The report notes the Committee’s concern that while the agencies’ focus on countering the threat of terrorism is both necessary and understandable, it has resulted in a

I want to elaborate on that, not necessarily from a Committee perspective but from a personal and open-source point of view.

The end of the cold war was supposed to mark the end of traditional rivalries between nation states, as we slipped into an era of liberal democratic peace. In many ways 9/11 reinforced that trend, as the more amorphous threat posed by Islamic terrorism came to be seen as the primary threat to our national security. The national security strategy announced in March reflected that in its focus on the dangers posed by terror networks and other non-state actors. It had very little to say on state-led threats. I worry that pooling all our resources into the war on terror may have taken the focus away from more traditional forces of threat.

Over the past year, there has been a growing number of warnings about the extent of covert activity by foreign intelligence organisations in the UK. In his Society of Editors speech last November, the director general of the Security Service said that his agencies had been forced to defend the UK against

There has been a spate of unconfirmed—

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Andrew Mackinlay: The date was 5 November, which I thought was quite significant, because I think there is a case to defend Parliament and parliamentary democracy here. I went into the M15 website the other day, which said,

How was it that I was warned by the Chief Whip not to meet a Russian diplomat? I find that highly unacceptable in a democracy. This is going on, and it is menacing.

Ben Chapman: It is not for me to comment on that, but I am sure that the point has been recorded and will be noted.

There has been a growing number of warnings over the past year about the extent of covert activity by foreign intelligence organisations in the UK. There has been a spate of unconfirmed stories about the hacking of sensitive computer networks in Whitehall Departments, in parliamentary offices and UK businesses. It is said that 30 agents are operating out of the Russian embassy and trade mission in London—the same number as during the cold war. That has been referred to in some respects. Much of that is tied to the increased competition between nation states over resources, whether energy, technology or information. That seems set to define the 21st century.

Despite the changing nature of the security environment since the end of the cold war, it is dangerous to ignore the more conventional threats. The Security Service currently spends only a small percentage of its resources on counter-espionage. The majority of the agency’s resources go into combating terrorism at home and abroad—that is right—but at a time when other countries are increasing the sophistication and reach of their espionage activities, we may need to rethink that division of resources. Our report suggests that

for aspects of intelligence and security work other than counter-terrorism. Of course, I agree with that.

Again speaking from a personal rather than Committee perspective, I want to mention the looming danger posed by cyber threats. I have to say that I defer to no one in my lack of knowledge in that area, but it seems to me that that term broadly describes the intent to defend and attack information and computer networks in cyberspace. The appeal of that form of post-modern, asymmetric warfare is obvious; it is a low-risk strategy, since it is generally difficult to trace the origins of cyber attacks and to apportion blame, but it is high yield in the sense that it gives states or individuals the opportunity to offset the superiority of an adversary’s forces on the conventional battlefield. Smaller players can level the playing field with larger opponents in the cyber arena, because of the relative ease of access to the technology.

Given the dependence on information technology in not just our military systems but the whole infrastructure of modern society, a successful cyber attack could pose a severe threat to national security and economic prosperity. This is a developing issue in inter-state relations, but one that is unlikely to go away in an age when information superiority is paramount. It is vital that this issue is given the requisite attention. At the very least, perhaps we need to think about the allocation of more resources
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from the single intelligence account to counter-espionage, to guard against complacency, particularly in relation to the cyber challenge.

4.47 pm

Mr. George Howarth (Knowsley, North and Sefton, East) (Lab): May I say what a pleasure it is to follow my hon. Friend the Member for Wirral, South (Ben Chapman), particularly his lucid explanation of post-modern, asymmetric warfare? I am sure that the whole House is now far better informed on that subject than we were a few moments ago.

I want to address some of the issues that have been raised variously by my hon. Friends the Members for Thurrock (Andrew Mackinlay), for Liverpool, Walton (Mr. Kilfoyle) and for Walsall, North (Mr. Winnick). In an ideal world, the secrecy involved in the various agencies and the collection of intelligence would not be so wide ranging as it must be in the world in which we live. Therefore, greater openness would be perfectly possible, because a smaller amount of information would need to be dealt with.

As many hon. Members have said, the threat in the post-9/11 world from those who are influenced by Salafi ideology, which was born in Egypt but has been assimilated by groups such as al-Qaeda, is such that we need to have extensive coverage of what is going on in the UK and in countries such as Pakistan and other countries in the middle east and elsewhere.

If we are to deal with a lot of intelligence information that is by its nature secret, it is not possible for it all to be discussed openly or for us to conform with all the democratic requirements that rightly apply to other areas of policy. We are not dealing with the health service or education; the information is of a completely different kind and it has to be dealt with differently.

Mr. Mullin: Nobody is arguing that all the information should be put in the public domain; the argument is that in a democracy the Intelligence and Security Committee should account to Parliament, not to the Prime Minister.

Mr. Howarth: My hon. Friend will forgive me if I say that that is exactly what we are discussing here today. I shall move on. I shall probably answer his substantive point slightly differently in a moment.

My view is that as far as possible everything should be as out in the open as is reasonable. It is appropriate that, through the Green Paper, the Government have considered how we scrutinise and how we can do more things in public. I shall not cover that ground too much, as my right hon. Friend the Member for Derby, South (Margaret Beckett), who chairs our Committee, dealt with it in great detail and in a way that represents the views of most, if not all, of the Committee’s members. Some things we can do in public and some we cannot. The obvious example—the national security strategy—was raised by my right hon. Friend. As that is a public document, it seems reasonable that much of any interview that we have with the heads of the agencies or those responsible for them should be public; I have no problem with that.

My point is that there is a trade-off: the more that we do in public as a Committee, the less we will get to know. I cannot go into detail, for obvious reasons, but
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in one of our recent investigations, for example, we looked at some raw intelligence information. It goes without saying that if, as is sometimes necessary, we have the ability to do that, we cannot suddenly grill someone about that information in public. A big element of what we do has to take place behind closed doors; the right hon. Member for East Hampshire (Mr. Mates) made that point very effectively, so I will not take it any further.

In the three years during which I have been a member of the Committee, we have had the opportunity to talk to the members of other oversight committees from other parts of the world—Spain, South Africa, Australia, Canada and others. I should add that most of the time they come to see us rather than the other way round, in case anyone thinks that we spend all our time travelling around the globe. One of the points that has come out of a lot of the dialogue that we have had with people on other oversight bodies is that they envy the extent to which we can go into greater depth and look at information that they simply would not be allowed to consider. They have often made the point that we are probably more effective because we are more behind closed doors than our equivalents in other parts of the world.

I had intended to say a lot more, but time forbids. I also want to address briefly the review of counter-terrorism strategy; our report refers to that from page 27. I am thinking particularly of the Contest strategy, and, within that, the Prevent strand. One of the great lessons that we learned from the London bombings of three years ago is that some young, and in many cases British-born, Muslims are so alienated—that is probably the wrong word; “detached” is better—from their own predominantly Muslim community and broader British society. There are all sorts of reasons for that, but I do not have time to go into them now. The agencies are well aware of those reasons, and I know that the Secretary of State for Communities and Local Government is also pursuing that agenda.

It is hugely important that we better understand the process that often leads young Muslim men—it is almost exclusively young Muslim men—to move from a point at which they might be considered radical to a point at which they are willing to strap on explosives, go on to the public transport system and kill and maim hundreds of people. At some future time, it could even be thousands of people. There is a very good book on that process by an American academic and former employee of the State Department, Marc Sageman, called “Understanding Terror Networks”. It is important that that kind of open-source information should be taken into account by the agencies as they increasingly try to understand what is going on in our own community.

A further point on the radicalisation and conversion to terror of young Muslims is that we need directly to engage with them. There are some who would be described by them as apostates—for example, Hassan Butt and Ed Husain. Those people have held that ideology and then rejected it, and are now doing a very brave thing in raising these issues, having come to an understanding of how wrong they were. They are writing articles, making speeches and giving lectures on this subject. They and others in the Muslim community who are moderate in their interpretation of Islam must be strongly encouraged. If we are to prevent more and more young Muslim men from becoming terrorists, almost nothing is more important
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than that engagement. I know that the agencies recognise that fact, but I hope that we all recognise that we have a responsibility to engage with those people and to understand their genuine issues and grievances while, at the same time, being firm in pointing out that terror and blowing people up are not acceptable in this country and will never be condoned simply because they take on a religious colour.

4.57 pm

Mr. Gordon Prentice (Pendle) (Lab): I shall take only a couple of minutes. I came here to support my good Friend the Member for Thurrock (Andrew Mackinlay), but I might make one or two other observations, having listened to the debate.

My Friend the Member for Stockton, South (Ms Taylor) talked about the agencies selecting from a smaller pool of people. That was very delphic; I really wondered what she meant by that. I find myself thinking that the report is very disappointing when it comes to staffing and recruitment issues. The right hon. Member for East Hampshire (Mr. Mates) told us that it is not about recruiting the wrong people but about getting enough of the right people, yet there is nothing substantial in the report about recruitment methods or turnover. We know how many people there are in the three agencies. We are told that it is 3,200, and that there has been an explosion in numbers, with another 690 being recruited in 2007-08. Presumably that recruitment will continue into the future, so long as there is this terrorist threat. We also know that there are concerns within the agencies about the civil service retirement age increasing to 65 over the coming years. And that really is about it.

My substantive point is that the staff at GCHQ—in fact, the staff of all the agencies—are civil servants, but they do not have all the rights of civil servants. There is no requirement, for example, to appoint according to merit. That is at the core of the United Kingdom civil service, but GCHQ and the other two agencies could just drag someone off the street and appoint them. GCHQ staff cannot take their concerns to the Office of the Civil Service Commissioners, or any other outside body.

Mr. Mates: The hon. Gentleman is plain wrong about that. In the Committee’s lifetime, a special person has been appointed to whom any member of any of the security services can, in confidence, take any ethical, professional or other concerns, without going through their line management. That has been working extremely well. He ought to get his facts right.

Mr. Prentice: I hear what the right hon. Gentleman says, but I wonder whether that system is sufficient. In 2004, when the Government published a draft Civil Service Bill, in response to the draft Civil Service Bill produced by the Public Administration Committee, it included reference to GCHQ, but in the draft Constitutional Renewal Bill currently before the House, which is being considered by a Joint Committee, GCHQ has disappeared in a puff of smoke. When the first civil service commissioner, Janet Paraskeva, came before the PAC in April, she voiced her concerns about that. I am left wondering why the thousands of staff in the intelligence agencies are the only civil servants not to be covered by the draft Constitutional Renewal Bill. My invitation to the right
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hon. Member from East Hampshire and his colleagues on the Committee is that they should consider the issue, not close their minds to it. He should perhaps ask the Committee to take a view on the subject.

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