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Lord Kennet: My Lords, perhaps I may ask the noble Lord to note this. He prefaced his last observation about the need for secrecy by saying that he departed from my opinion, among those of others, on this matter. I should like to state that I agree with what he says about the need for secrecy.

Lord Chalfont: My Lords, with the leave of the House, I should like to apologise to the noble Lord if I misunderstood him. I thought that he was taking a more liberal view of the matter than I do. If I was wrong, I apologise.

6.15 p.m.

Lord Cuckney: My Lords, I begin by thanking my noble friend Lord Campbell of Croy for introducing this debate on an important subject. Secondly, I declare an interest as a former member of the Security Service.

As I am sure noble Lords recognise, the intelligence services, as has already been pointed out, operate in areas and with techniques which inevitably, by their very nature, do not readily lend themselves to public debate. As a result, they are often subjected to ill-informed criticism, cannot defend themselves, and cannot explain publicly various actions. Their successes are often successes only because they are not disclosed.

There is one particular aspect of my noble friend's Motion on which I wish to lay some emphasis. It is the need for public acceptance, particularly of the Security Service.

While considerable progress has been made, especially since 1989, in developing a greater degree of openness, and--the point has already been well made--we now have the intelligence services established on a statutory basis with oversight arrangements in place, I do not believe that the strength of those arrangements is widely enough understood and appreciated. It is upon those arrangements that I should like to concentrate.

As background, perhaps I may explain that before 1989, when the Security Service Act was passed, the Interception of Communications Act 1985 had established a tribunal to deal with complaints. The tribunal consisted of five senior members of the legal profession, plus the interception commissioner, a senior judge who, as well as assisting the tribunal, reviews the issue by the Secretary of State of warrants under the Act. The interception commissioner reports annually to the Prime Minister and his report is also laid before Parliament.

The Security Service Act 1989 established the service on a statutory footing with a legal status and replaced a directive which had been the basis for its operations for 37 years when originally issued by the then Home Secretary, Sir David Maxwell Fyfe.

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With case law under the European Convention on Human Rights--I have in mind in particular the Leander judgment of March 1987--there is clear recognition of the need for a security service to provide covert response to covertly organised threats. There is also a requirement for a security service to be put on a clear legal basis with the need to ensure that there are adequate and effective guarantees in place against abuse. These requirements. I believe, are fully met by the 1989 Act. I should, perhaps, add that the Security Service is also subject to the provisions of both the Interception of Communications Act and the Intelligence Services Act. It is bound under those provisions as regards the issue of warrants. Finally, it is also subject to the Intelligence and Security Committee which reports to the Prime Minister and on which my noble and learned friend Lord Howe of Aberavon sits. I doubt whether there are any additional measures which would increase the accountability of the service while maintaining its effectiveness.

I believe that a service these days facing principally the threats of terrorism, espionage and the vitally important issue of the proliferation of weapons of mass destruction, and whose role is essentially to collect intelligence but which has no executive powers, is rightly subject to a high degree of judicial oversight by two separate commissioners and two tribunals as set out in the relevant Acts. I believe that those arrangements should be more widely accepted and understood.

No doubt the Intelligence and Security Committee has been considering the reaction of the intelligence services to the ending of the Cold War and how they have adapted to changed and, in some respects, more difficult circumstances. I hope that my noble and learned friend Lord Howe of Aberavon might be able to say something later on this subject.

I trust that in any review due recognition has been given to the essentially long-term nature of the operations and techniques used by the intelligence services and the fact that their resources cannot be turned on and off like a tap. Some of those points can be explored more fully when the Security Service Bill comes to the House for its Second Reading. It will provide an opportunity, I hope, to consider fully the proposals to introduce legislation to enable the Security Service to assist law enforcement agencies in their work against serious crime.

I have read with considerable interest the Official Report of the Second Reading debate in another place and of the two meetings of the Standing Committee. I was pleased to see that it has emerged that the primacy of responsibility for countering crime rightly lies, and should remain with, the law enforcement agencies. The Security Service will be tasked, in effect, through the national criminal intelligence service. In other words, the Security Service will act in support of chief officers of police, regional crime squads and Her Majesty's Customs and Excise.

It is, I understand, the intention that the Security Service's contribution will be co-ordinated by the national criminal intelligence service and existing law enforcement agency structures. It will not act

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independently. I believe that it makes good and effective use of highly specialist resources in the fight against organised crime.

6.21 p.m.

Baroness Park of Monmouth: My Lords, I too am grateful to my noble friend Lord Campbell of Croy for initiating this debate on a subject which must be of such concern to us all. It is now well over two years since in this House we had the Second Reading of the Intelligence Services Bill. I said then that this was still an unstable and dangerous world. Nothing has changed, except perhaps to reinforce that judgment. I also said that we needed to know the secret intentions of potentially unfriendly countries. For that, as my noble friend Lord Chalfont said, the country needs human sources. Those take time to be developed and cannot be turned on and off. That too cannot be emphasised enough in a period when cuts, cuts and cuts are the order of the day. I emphasise two points made clear by Percy Cradock, the then chairman of the JIC, the body which tasks the Secret Intelligence Service. The SIS--the service for which I can speak to some extent as a former member--does not create its own agenda. I emphasise that especially in the light of what the noble Lord, Lord Kennet, said in his interesting speech.

The SIS is tasked by the Government and the JIC. Despite being undeclared until the time of the Bill of which I spoke the SIS was and always has been fully accountable to Parliament through the Secretary of State for Foreign Affairs, to whom it answers, as well as to the Prime Minister, in the same way as the Security Service worked to the Home Secretary. I am spelling that out again because I was disturbed in the debate in this House on the Scott Report by the words of a distinguished and much respected former Home Secretary:

    "Procedures must be introduced whereby information that MI6 is used to keeping to itself--for very good reasons--is readily available, though it need not be circulated around the department. That certainly would not happen in the Home Office".--[Official Report, 26/2/96; col. 1275.]
He went on to say, correctly, that MI5,

    "knows that there is a place called Parliament. Members of the department read the newspapers daily".
He added:

    "That may not be true of MI6, cached up in Aden or the Yemen, whose members may not be used to parliamentary accountability".
He went on to say that when he read the Scott Report and tried to read between the lines:

    "I sensed that intelligence officers did not realise the importance of reporting to Parliament in some way".

I find it astonishing that a Minister of the Crown, a senior Minister and one who clearly understood and valued the work of the Security Service, should not have been aware that MI6 (SIS) is and always has been fully accountable and responsible. I am still more surprised that he should have drawn such conclusions from the Scott Report. It is, of course, an immensely detailed mass of paper in which a perpetual seesaw of assessment--on the one hand, on the other hand--makes it possible to justify several contradictory

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conclusions. But there are some statements which are quite unequivocal. One such occurs in Volume III of the report (paragraphs G18.39) which, discussing public interest immunity certificates and what the report calls the Government's grudging attitude to disclosure, says:

    "The strictures expressed ... do not, however, apply to the SIS or the Security Service. Each of these agencies was willing that, subject to redactions to conceal sensitive contents, its documents should be disclosed to the defence. The PII class claims made ... in respect of the agencies' documents were not instigated by the agencies".
I could go on to refer to the major report on Operation Babylon (the supergun) which emanated from SIS but which, as its author testified, generated,

    "far less interest than might have been expected--rather like throwing a brick into a puddle of treacle--a loud plop, and nobody took any interest".
Very early in the report we learn that SIS was only tasked to put Iraq at the top of its priorities in 1988 (paragraph D5.25 in Volume II). In paragraph D5.1 we read of the volume of intelligence reports which resulted. The report acknowledges that the overall picture of events, now so well known, derived from that considerable volume of intelligence reporting.

However, as anyone knows who has worked in Whitehall, whether in a customer department, reading the intelligence or in the services producing it, the great problem is the vast quantities of paper which must be read, evaluated and acted on each day. The desk officer who is the specialist in the customer department has to decide what to send further up. Eventually, in the case of really vital intelligence which is of immediate and relevant interest, he might send it right up to the Minister, either in the form of a JIC summary or as an individual report.

Lord Justice Scott is constantly surprised at what Ministers did not see which, with hindsight, could, he thinks, have influenced their decisions. But there is only so much paper officials can expect the Minister to take home in the red box and read. My noble and learned friend pointed that out in our debate on the Scott Report. I say that because there has never been a problem of the services withholding intelligence. They are asked to produce it according to a constantly revised agenda set by the JIC. I may say that our budgets were carefully scrutinised at all times to ensure that we were giving value for money. If it is indeed secret intelligence that adds to the knowledge already available overtly and through embassy channels, the officers circulate it to customers. That is their job. All they protect, and rightly, is the identity of the source, although, like every other department, SIS--despite opening its files to inquiry--still found papers later which should have been seen. However, that was the experience of all the ministries. For example, in the MoD there were 11 fat files on only one aspect of the matters being inquired into. As the Permanent Under-Secretary in the Foreign Office explained:

    "the nature of the Prosecution cuts across many areas of our work and it would have been very difficult, without checking every paper on every file, to be certain that nothing was being overlooked".
That comes from paragraph G9.10 of Volume III.

We now have a new system of oversight operating and we have the great good fortune to have in my noble and learned friend Lord Howe someone who can speak

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to us with first-hand knowledge. I look forward greatly to hearing what he has to say. I have addressed the issue of whether SIS is a responsible, accountable organisation only because of the unfortunate misconception which, in the context of the Scott Report, seems still to exist. I can only say that SIS, like all the departments involved, was not perfect, but the Scott Report seems to judge that it is a highly professional body which operates with integrity and that it at no point withheld intelligence. What needs looking at, as the report concludes, is what happens to the intelligence and how it is circulated and used.

However, my chief concern is the vital importance of ensuring that we continue to maintain these highly professional services in an operational state. It is very dangerous indeed to lower our guard in terms of intelligence capacity at this moment. I agree very much with what my noble friend Lord Chalfont had to say.

Consider the situation in Russia and Russia's relations with Europe, the CIS, the Middle East and China. I imagine no one would argue that we can afford not to know about nuclear proliferation and biological and chemical warfare. Russia's security council met in February this year to work out a new strategy in "technological security". It was proposed that the state should focus on the manufacture of high technology arms, such as strategic nuclear weapons, and to that end concentrate production on a group of the best performing enterprises in the defence industry. Russia is building a new generation of nuclear submarines to replace obsolete vessels. It launched the first last year. It is building new strategic missiles and new fighter aircraft. Last June, Grachev saw the prototype, at the Zhukovsky complex, of what he called "the new multi-purpose fighter of the 21st century". Russia has repeatedly lied in the past few years about her continuing research into biological warfare, and she has still not disposed of her 40,000 tonnes of chemical weapons. Meanwhile, in January this year, she announced that her arms sales grew by 60 per cent. in 1995. She now enjoys 13.6 per cent. of the world arms market, with China and India her biggest buyers. My noble friends will remember that it was to India that the cryogenic rocket motors were sold which India needed to complete her nuclear capacity.

The defence budget this year is over 80,000 billion roubles, roughly 17.5 billion US dollars. It has moved steadily upwards for the past four years from a mere 900 billion roubles in 1992. We need surely to know what is happening, not only in Russia but in the client states, which include Libya and Iraq--both favourite hunting grounds for Mr. Primakov, the new Foreign Secretary and former head of the modern KGB, and a very different character from Mr. Kozyrev. Iran's foreign minister, Mr. Velayati, visited Moscow this month. Primakov was "most impressed by the position of my Iranian colleague, who considers the fight against terrorism could be stepped up". That is an interesting view from the Iranians. In him Primakov found an opponent of the eastward expansion of NATO "no less convinced than I am. Following the collapse of the

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Warsaw Treaty the NATO bloc only disrupts the balance of power in the world. Its expansion will only create tension in the international situation".

Primakov's aims, which reflect Russian thinking, included in his last job as head of the foreign intelligence service being, as he said, "extremely interested in the centrifugal tendencies developing on the territory of the former USSR". He said: "Our intelligence department is not only in favour of this, but is also working in that direction"--in other words, he was reactivating the extensive network of former KGB officers who now rule in several central Asian republics, and, incidentally, in Azerbaijan, and reconstituting a meaner, leaner Soviet Union, an objective that has long been plain.

The other main plank of Russian foreign policy is to neutralise NATO. Vitali Churkin is already inside NATO's councils, and General Grachev's view of the 16+1 formula in NATO was clearly expressed in the context of his attendance at the NATO Defence Ministers' meeting in November 1995. He said that NATO "would be transformed not by broadening its zones of responsibility", presumably code for enlargement, but by "transforming it into an instrument of pan-European collective security". The consultative mechanism set up in Bosnia would be the prototype for future relations. Russia was gradually, he said, being introduced into NATO's political kitchen. Of importance, he said, was Russia's presence in NATO's top political body as this would strengthen Russia's capacity to influence political decisions. So much for the infiltration method.

General Grachev, in another mode in Belgrade in February this year, was threatening that if NATO expanded eastward, "even if one single state were to be admitted into the alliance", Russia would seek new allies in the east, build up its military power and reconsider disarmament agreements, including CFE, START I and START II. Primakov, this month in Slovakia, while saying that Russia would not bang the table or order anyone not to join NATO, observed: "Slovakia has a negative trade balance with Russia. Do not get too involved with NATO. NATO comes and goes. Nations remain." And he made equally menacing noises to Norway on enlargement.

Does all this sound like a stable, safe world where we can afford not to have strong and effective intelligence services, if only, through early warning of the undisclosed intentions of our enemies, to buy us time to reconstitute our defences should that prove necessary? Do we not need to know whether China is banging drums or really getting ready for something more serious? I remind the House also that the IRA has always had an international dimension (Semtex from Czechoslovakia, arms from Libya, and, curiously enough, arms from Estonia) and the IRA is still with us. The maverick states that aspire to be nuclear powers and meanwhile are quite happy to manufacture biological and chemical weapons are still with us. They have not gone away.

I conclude with Mr. Primakov's own words last December. "Some external forces wish Russia's disintegration. We need to know their intentions.

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We must try and neutralise their intentions". That goes for us, too. And I do urge that the classic targets of the intelligence services should not be crowded out by drug trafficking, international crime and all those worthy, safe subjects.

6.35 p.m.

Lord Knights: My Lords, I, too, thank the noble Lord, Lord Campbell of Croy, for giving us the opportunity to discuss this very important topic. I feel I should first say, however, that it was not without some hesitation--and indeed some measure of trepidation--that I added my name to the list of speakers for this debate. My misgivings arose not only from my recognition of the considerable qualifications of the noble Baroness and other noble Lords whose names were already there, but also from the fact that, while I have had some experience of the Security Service, MI5, I have had no personal contact with the sister intelligence services, SIS and GCHQ. I therefore seek your Lordships' indulgence should my comments be thought to be somewhat more narrow than they might perhaps otherwise have been.

I am also very conscious, as was mentioned, that a Bill to widen the responsibilities of the Security Service has already been introduced into this House and there will be another, perhaps more appropriate, opportunity to debate in detail the important issues that arise from that.

When preparing my remarks I took the opportunity to re-read some of the debates that took place in this House prior to the enactment of the Security Service Act 1989 and the Intelligence Services Act 1994. They brought home very forcefully the changes that have taken place in the status of the intelligence and security services in the past seven or eight years.

Who would have imagined, for example, that by 1993 MI5 would not only take the secrecy wraps off the director-general's identity and the address of her headquarters, but would also publish details of the management and organisation of the service and the methods used by its officers to obtain and gather intelligence? In a few short years, the image of the service has moved from one which, in the words of Mr. Peter Wright in his book, Spycatcher,

    "bugged and burgled its way across London",
to one which is clearly now well controlled, accountable in a way it never was before and with clear statutory authority to justify its activities.

Despite those somewhat remarkable developments, it would appear from exchanges in the other place when Members considered the current Security Service Bill that not everybody is yet convinced that the changes have removed entirely the scope for suspicion as to the service's activities. Some, at least, of the old rumours and allegations still persist, although much less vociferously and on a much reduced scale. Be that as it may, noble Lords may agree that, overall, there is much less suspicion generally about the security and intelligence services, which must have an effect on the morale of those who carry out this often dangerous work.

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Whether these new attitudes have in any way made that work more difficult, as some thought might be the case, I am of course not able to say. But it would be interesting to know whether they have in any way compromised or complicated the service's relationships with its opposite numbers in other countries, a matter already touched on by the noble Lord, Lord Campbell of Croy.

It is not only the image and status of the Security Service which have changed. Its functions also have had to adjust to the changed situation in Russia and Eastern Europe generally which has already been referred to. The threat from subversion has clearly diminished, but at the same time the threat of violence arising from terrorism has clearly increased. In this field of course in 1992 the service took over from the Metropolitan Police the responsibility for countering IRA terrorism on the British mainland, and events of the last week or so have indicated quite clearly that there is still considerable work to be done in that field.

As your Lordships will be well aware, the principal statutory responsibility laid on the service is to identify, investigate and counter threats to national security as well as threats to the economic well-being of the United Kingdom which arise from overseas. Specific reference is made to threats from espionage, terrorism and sabotage. In order to achieve this its officers gather, assess and develop intelligence to the point where direct action to counter the threat needs to be taken, a point which again was made by the noble Baroness, Lady Park of Monmouth.

Clearly in doing this there comes a point where serious crime, be it the disclosure of secrets, firearm and explosive offences or the like, raises its head. It is at that point, where arrest and prosecution have to be contemplated, that the police and the Crown Prosecution Service become involved.

There is nothing new in this. Indeed, the Act of 1989 specifically authorised the service to pass on, for the purpose of preventing or detecting serious crime any information which it obtains in the proper discharge of its functions. It is now being suggested that it should also be a statutory function of the service to act in support of the activities of police forces and other law enforcement agencies in the prevention and detection of crime. In that context the word "serious" is always brought in. Clearly this must presuppose that the service will be able actively to seek intelligence about serious crime, whether it is a natural extension of its normal functions or not.

This clearly raises some important issues, particularly who is to have supremacy in any investigation which does not spring from the discharge of the service's traditional functions. It also raises the possibility of the police actively seeking the assistance of the service by way of its specialist skills of investigation, collation, assessment, disruption and prevention when inquiring into criminal matters which are the normal purview of the police. The noble Lord, Lord Cuckney, has already discussed this particular problem, and I agree with all he had to say about it. But there are a number of problems which are thrown up by this new arrangement,

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particularly in connection with the handling of informants, disclosure of information in criminal investigations, the effects of the Police and Criminal Evidence Act on the activities of Security Service officers and the arrangements for their accountability, all of which will no doubt be addressed in your Lordships' further consideration of the new Bill.

There may well be problems here in comparing their position with that of the police officers with whom they are working. Members of the special branches of police forces have for a number of years of course been doing very similar work in connection with terrorism in particular and subversion, and they have none of the additional powers which the Acts have given to the Security Service, for example, to obtain warrants to enter premises. In the future when police and security officers are working together it will be essential, it seems to me, that they should act under the same identical powers. Currently that is not the case, and that matter too will have to be given consideration later on.

There is the question too of whether the functions will extend further; indeed, whether they should. For example, when we are dealing with terrorism we normally think of bombs and explosives being the way in which the wishes of the terrorists are sought to be effected. But it may not necessarily be explosives and firearms. Pressure can also be put on people to do things they would not otherwise wish to do which could well also come under the heading of terrorism. If that be the case, it will probably be the police who will be investigating rather than the Security Service. Here again, when one is dealing with, for example, the Animal Liberation Front, the term terrorism can undoubtedly be applied to various activities, and the rules which are being sought now and the activities which are being arranged now for collaboration with the Security Service in this field must also be considered in relation to these new matters, it would appear to me.

There is much to be discussed. There are many important matters which are going to come up and it will not just be a matter of saying that the Security Service must and will assist the police in criminal matters. It is a much wider argument which we shall have to address and I look forward to taking some part in it. As I said at the beginning, I have concentrated very much on one service alone. I trust that what I have had to say will at least be helpful when we come to discuss matters further on the Second Reading of the Bill.

6.47 p.m.

Lord Howe of Aberavon: My Lords, it is for me a privilege to be able to follow the noble Lord, Lord Knights, and to say to him, although it need not be said, that he had no need whatever to display such diffidence in addressing this topic because his experience in this field has lent authority to his remarks, particularly on the Bill which we shall be discussing later.

I hope your Lordships will forgive me if I do not now turn to those topics but turn instead to thank my noble friend Lord Campbell of Croy for having introduced this subject; to apologise for my absence from the early part of this debate because I was concluding a discourse in

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another place; and to say that I am present not least because my noble friend very properly reminded me, given my position as the only representative of your Lordships on the Intelligence and Security Committee (at least during the first 15 months of its existence), that the House might expect to hear a word from me.

I am indeed glad of the opportunity that that offers, but I must at the same time respect the need to balance that commitment to this House with a corresponding duty of confidentiality to my colleagues on the committee. In particular, I have an obligation not to pre-empt the publication of the committee's first annual report which was submitted as required by the end of last year. We have discussed it with my right honourable friend the Prime Minister and it is due for publication before too long.

The fascinating thing to me, and it has been noticed by many other speakers, is the huge openness of the process on which one is there engaged, which underlines the scale of the sea-change which has taken place even in the 13 years since I first had the privilege of having direct ministerial responsibility for two of the services.

I listened with great interest to the speech by my noble friend Lady Park when she diverted for a moment or two to offer some strictures on the noble Lord, Lord Jenkins of Hillhead, and despite his absence--

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