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7 May 2009 : Column 416

When we were discussing the issue, someone from outside the Committee whom we had invited to join our discussions said, “Of course, you could always rehearse it with the heads of the security services.” Does any Member think that that would wash with our friends in the media for more than two seconds—that they would believe it was not a carefully staged exchange before we closed the doors and threw everyone out? In my view, it would be thoroughly counter-productive. We will try to find a way, but I cannot tell the hon. Member for Thurrock or anyone else whether we will succeed. It is not that we do not want to do this; it is just that there are some real practical difficulties, although if we can overcome them we will.

The next issue to discuss is where we are going. I am trying to demonstrate to the House that we have made some progress. Things are changing all the time, although, being a bit of a cynic, I must add that it may be a case of “Plus ça change, plus c'est la même chose.”

The objection was raised—by, I think, the hon. Member for Thurrock—that the Prime Minister had hand-picked the Committee, and that we were the Prime Minister’s puppets. Well, as one of the present Chairman’s predecessors said rather tersely when that was put to her by a journalist, “Some of us were hand-sacked by the Prime Minister as well.” There are two sides to every coin.

What happened, I believe, was that the usual channels produced a little list and gave it to the Prime Minister, and that produced the Committee. Now, because we have changed things, the usual channels give a little list to the Committee of Selection, the Committee of Selection gives it to the House, and the House approves it. So what has changed? We all know in our heart of hearts who runs the business of the House and our parties. It is run by the usual channels, which Enoch Powell once described as the parliamentary sewers. There was nothing rude about that—sewers are clean; it is what goes through them that is objectionable. But I do not think I shall go any further down that road.

The change has been made, and it seems to have pleased some people. If it has, so much the better. We are now having an annual debate, and we can have more than one. I hope that the House authorities will find that there is enough in our report on the 7 July bombings to warrant at least a half-day debate, so that Members outside the Committee can air their views. I issue a plea to the Government to try to make some time for that.

We can look forward to the possibility of evidence resulting from communications interceptions being made available to the courts. Others have referred to the Chilcot strictures; I merely say that it will be an extremely difficult exercise, not just because we cannot produce intercept evidence in court today, however it has been obtained, but because we—or they—are working on the next generation. The people who are responsible for trying to obtain our intelligence must keep ahead of the advance of technology. What could not have been dreamt of five years ago is now available to the terrorists, and we had better ensure that it becomes available to us damn quickly so that we know what is going on.

I have to tell my hon. Friend the Member for Epsom and Ewell (Chris Grayling) and the House that the faster things move and the more the technology develops, the harder it will be to allow intercept evidence to be produced in court without someone asking “How did you collect it?” That, of course, is the key because
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terrorists and any criminal organisation must communicate and they do so in ways that they think are safe. As has been shown by recent trials, the ways they think are safe are not necessarily so. It is the job of our security services to make sure that they are not, but not to tell them what it is we are using to catch up with them, keep up with them and get ahead of them.

As we move forward and change, we must have security at the front of our minds. Tempting though it is for someone in Parliament and public life to say we should be more open and push the door a bit so that the public can know more, there are times—I know that this is not a good time to say this—when our politicians have to be trusted. We are very fortunate in the Committee in that there has not been a leak in 15 years and we are trusted by the security services, by Government Ministers and, I hope by extension, by the House. We are not party political; because we sit in private, there is no point in anybody grandstanding or making a speech. If that were to happen, half of us would go to sleep; it just does not happen.

Perhaps I can finish on a light note. When we were abroad, the Committee was entertained to dinner by an ambassador at his house and the conversation came round to party politics. We were asked whether we were a party political Committee. The Chairman of the day asked the ambassador to try to identify us. The ambassador, who should have read his brief more closely, got 90 per cent. of us wrong and I had to go through the rest of the visit having been called a socialist by one of Her Majesty’s ambassadors, which I found a little difficult to take from my colleagues.

We must try to be more open and to make progress but above all we must ensure that our national security, which is so brilliantly looked after by our security services, is not damaged.

3.47 pm

Ben Chapman (Wirral, South) (Lab): It is a pleasure, albeit a daunting one, to follow the right hon. Member for East Hampshire (Mr. Mates). It is a pleasure to work with him and with colleagues from both sides of the House on the Committee. It is also a particular privilege to work under my right hon. Friend the Member for Pontypridd (Dr. Howells). The precedent set today of the Chairman opening the debate is shown to have been as well judged as his remarks in doing so. I add my congratulations to our staff and of course to the agencies on their work.

It is not the most exciting subject under the sun, but I wanted to spend a little time on the finances and expenditure of the agencies. The hon. Member for Epsom and Ewell (Chris Grayling) stressed the importance of that, as did my right hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth). It has to be the Committee that does the job of overseeing the expenditure and finances of the agencies, not least because it has a statutory responsibility so to do, but also because it involves, as has been said before in the debate, having access to highly classified secret material to do the job. We are assisted in our task by DV’d—DV is developed vetting—officers of the National Audit Office. Our resource, albeit a rounded one in terms of
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the experience of Committee members, taken with the excellent officers of the NAO, is none the less very limited, and in this respect and in others we could do with more resources.

The expenditure of the agencies, which has become a large sum and increased relatively over the years, could, especially in an organisation that operates largely in a covert way, become a very high-risk business. It could become the trigger for waste and inefficiency, and the Committee must try to ensure that that is not the case. That behoves us to spend quite a lot of our year’s work looking at the agencies in this regard. It is right, of course, that the amount of resources devoted to the agencies should be increased in line with the increased threat, but these are very large sums. Under the 2007 comprehensive spending review round, the funding available to the agencies will increase from £1.1 billion in 2005 to just over £2 billion by 2010-11. Because the baseline increases year by year, in the current year, for example, much of this funding is supporting what is now baseline activity. None the less, although 78 per cent. of the additional amount that GCHQ receives will be used to consolidate the current position, 22 per cent. will be available for further expansion, and that is a large sum. For the Security Service, the situation is rather different: only 20 per cent. of the additional amount it receives will be in support of the baseline position, and 80 per cent. will be available for expansion and investment in new capabilities. The figures for the Secret Intelligence Service show that 31 per cent. of the funds are to be spent on the current position and 69 per cent. are available for expansion and investment. High levels of risk are involved, and high levels of monitoring are required.

GCHQ will spend its increased resources on strengthening its counter-terrorism effort, primarily through operational support in the UK to an expanding Security Service. The theme of the agencies working together has become well established both in UK operations and in theatre overseas. GCHQ will also carry out work against international terrorism-related targets. Importantly, it will develop its capability to combat extremist use of the internet in the UK and abroad, and it will improve its internet-related capabilities, and the remainder of its international counter-terrorism effort will focus on issues such as the cyber-terrorist threat.

The risks implicit in large-scale expenditure on major projects, and in particular on major IT projects, have been recognised in our debate. One of the heaviest demands on the GCHQ budget is its technology improvement programme, designed to maintain and enhance its signals intelligence—SIGINT—capabilities. That collectively comes together as the SIGINT modernisation or SIGMOD programme, covering IT infrastructure, internet programmes, better analysis and support to military operations. The amount of funding that is required for this is considerable and represents a significant proportion of the single intelligence account budget, but the Committee recognises that this investment in SIGMOD is essential if GCHQ is to keep up with, or even get ahead of, the complexity of the technological challenge.

The Security Service is, if you like, rather more of a people-based organisation than GCHQ. It spent its capital funds in the 2007 CSR on major technical accommodation projects, including a northern operation
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centre and new services building in Northern Ireland. On the revenue side, as it were, it will increase the impact and improve the effectiveness of the service’s agent-running capability and increase the service’s regional presence to reinforce its partnership with the police. Just as it partners with other agencies, it also partners with the police and other organisations. However, as it is a people-related organisation, its major funding increase will be staffing expenditure. It continued its rapid recruitment programme, so that by April 2008 it had a total of 3,400 staff, including secondments and attachments. Staff numbers are projected to grow to some 4,100 by 2011. Those are big figures. It may be a statement of the obvious, but recruitment has largely been at junior levels, with year-on-year growth of around 30 per cent. in those grades since April 2006. That has boosted the number of front-line staff involved directly in counter-terrorism work, co-ordinating investigations, running agents and conducting surveillance of targets. But there are risks in recruiting and growing so rapidly, especially at junior level, and those risks are related to vetting, with the potential for infiltration or problems with inexperience—sometimes wide inexperience across an agency. There are also the dangers of grade inflation. As far as we can tell, the agency appears to have handled those risks well.

The SIS’s budget, from 2008-09 to 2010-11, will enable it to continue supporting the growing number of security service investigations of terrorist activity. It will involve both spotting and attacking operations originating outside the UK and terrorist networks overseas. We noted in our previous annual report the increased proportion of SIS staff working in joint operational teams with the Security Service—some 10 per cent. of staff in counter-terrorism teams are SIS officers, including officers co-located with the Security Service in regional stations and overseas. That closer working enables the SIS to improve its support for the Security Service on the overseas aspects of counter-terrorism investigations. It spent 9 per cent. more than in 2006-07 in the subsequent year, but that compares with the Security Service’s 41 per cent. more over the same period.

In our last annual report, we noted the National Audit Office’s comment that it had identified two cases in the SIS’s 2006 accounts of errors in the reporting of payments to agents. We were assured that that would not happen again, but in one case it did to some extent. We now have assurances that the SIS has changed its procedures so that such expenditure is reflected accurately in its accounts in future, and we will of course check that.

The agencies all performed well in the 2004 spending review—SR04—in terms of efficiency savings targets, which were more than met, so—as is the way of the world—the targets have now been increased. The NAO viewed the financial management and control of the agencies as good, and so did we. While the economic circumstances surrounding the next comprehensive spending review round will be very different, the Committee has already expressed its concerns that attention to long-term challenges—those not related to ICT—such as counter-proliferation, regional stability, energy issues and espionage, may continue to receive less attention than they need. We have also expressed concern about the need to invest further in the capacity to intercept modern communication and deal with cyber challenges. There will be a need for major expenditure in that area of the agencies’ work.

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The Committee welcomes the work being done on establishing a new framework for monitoring the performance efficiency and financial management of the agencies and, in particular, it is considering, in consultation with them, ways in which oversight of the budgets can be conducted in a more timely way. That needs to be an in-year oversight, rather than an end-of-year oversight.

Finally, the threat level remains serious. Terrorism, in my view, works best where it is least expected. Terrorist organisations change, fracture, morph, franchise and copy, and they change and grow constantly. It is important that our agencies and intelligence machinery anticipate these changes and prepare for them. The demand for resources will remain considerable and the need for oversight of them will remain proportionate to that.

4 pm

Patrick Mercer (Newark) (Con): I speak in this debate every year, and it is a pleasure to follow the hon. Member for Wirral, South (Ben Chapman). This is the first time that I have risen to speak as chairman of the counter-terrorism sub-committee. On that note, I thank the Home Secretary and draw attention to the outstanding work of a little-known organisation, which has, in fairness, been mentioned today—that is, the Office for Security and Counter-Terrorism. The sub-committee has recently been to visit it and we were all hugely impressed. Mr. Charles Farr, who is at the head of the office, deserves to be hugely congratulated on the work that he is doing.

The other thing that interests me, and I am surprised that it has not been mentioned, is that over the past few months, active terrorism inside this country has, of course, come not from the Islamist fundamentalists on whom most of us have concentrated—indeed I shall concentrate on them—but from the hands of republican terrorists in Northern Ireland. Anybody who has doubted the time, effort and resources that the security services have put into countering that threat has only to look at the series of successful arrests that followed the horrid murders outside Massereene barracks and elsewhere in Northern Ireland over the last few weeks. The arrests were a huge feather in the cap of the Security Service and the Police Service of Northern Ireland.

Ms Dari Taylor: I hope that the hon. Gentleman will acknowledge that we are discussing the 2007-08 report. The 2008-09 report will more than likely contain a section on all the issues that he is addressing.

Patrick Mercer: Of course, and I am most grateful to the hon. Lady for that intervention. The fact remains, however, that while we are doing parish notices some extraordinary work has gone on in Ulster and I believe that it deserves to be recognised. I underline the work of the OSCT, as well as that of the PSNI and others.

Let me return to the second 7/7 report and posit a number of questions that fall within the overall structure of the ISC report. I ask the Home Secretary and the Chairman of the ISC why a second report is being produced. I then want to ask the Chairman a number of questions and, if those points are not covered in any great detail, I suspect that there will still be many more questions to be asked.

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May I quote Rachel North? Many of us in this Chamber will know who she is. She is certainly the most vocal of those who were injured during the 7/7 attacks, and is an extremely articulate young women who has made her views clearly known. She said:

Those are the words of someone who was very seriously injured by terrorists. She was the closest person to one of the devices on 7/7 actually to survive. I ask the Home Secretary and the Chairman of the ISC to give us a broader view of the events of the last few years, and to start to come clean about why so much was left unanswered after the bombings of July 2005.

First, we had the Crevice fertiliser bomb incident of early 2004, and the subsequent trial. Then there was 7/7 itself, and the much-forgotten attempt on 21/7. After that came the airline plot of August 2006, which was followed by the Glasgow bombings of June 2007. Lastly, there was Operation Pathway, about which we cannot ask too many questions because I suspect that there is unfinished business there.

What are the links between those incidents? How much was known by the security agencies? Why were there such glaring omissions in the work of the Home Office and the security agencies, especially in relation to 7/7 and 21/7? Those omissions led to a successful bombing that killed 52 people and injured several hundred. If the subsequent bombing attempt of 21 July had gone ahead, I suspect that it would have killed many more than that.

Various questions need to be asked. First, after the initial bombings of 7 July, why were the Government so quick to claim that the people who died by their own hands were “clean skins”? Why did they claim that nothing was known about them when it subsequently transpired that Mohammad Sidique Khan and Shehzad Tanweer had been traced for several months beforehand? They were traced inside this country and they were involved with the Crevice fertiliser plot, but they were also traced as they travelled abroad to Pakistan and then back into this country. Why were the Government so keen to insist that all the individuals involved in 7/7 were new on the radar?

Secondly, why were we told that there was no apparent connection between 7/7 and 21/7, let alone between the Crevice plot and the London bombings of July 2005? How could the Government possibly be so ham-fisted as to claim that they were not connected, when the modus operandi in each was almost identical? The targets were very similar, the timings were uncannily similar, and many of the lessons from the 7/7 attacks—the things that did not work as well as the perpetrators would have liked—were implemented and put into practice by the bombers of 21/7. How on earth can the Government claim that the two incidents were not connected?

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