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Lord Lester of Herne Hill: My Lords, is it not the case, however, that the major contributors to the budget--that is, the United Kingdom, Germany, France and Italy--which together contribute the majority of the budget, have deemed that there should be zero growth in terms of the resources to be spent on the European Court of Human Rights and the Commission even within the context of enlargement? Will that not raise profound problems as the burdens increase?

Lord Inglewood: My Lords, I do not know the answer to the question posed by the noble Lord, Lord Lester. Therefore, with your Lordships' leave, I shall write to him.

I should like to mention also the vital issue of the reform of the common agricultural policy and the structural and cohesion funds. Without reform, extending those policies to central European countries would be prohibitively expensive and, in the case of the common agricultural policy, failure to do so, as was pointed out by the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Middleton, would cause the European Union to breach its commitments under GATT, even without enlargement. Those policies must be reformed sooner rather than later, not least so that the central European countries will know the shape of policies which will be in place when they join. As has been mentioned in the debate this afternoon, we have long advocated reform. We shall continue to press for that to be addressed seriously, and soon, so that the policies become more inherently sensible and so that we can ensure that enlargement is successful and sustainable.

Our commitment to reform does not reflect a lessened commitment to enlargement. Far from it. Those issues are complementary and not antagonistic. We wish to tackle the problems now so that they will not later become obstacles to enlargement; and to make sure that we avoid hasty, last-minute decisions which would almost certainly be botched and hence damaging. That is the only way forward. Real progress means actual progress which will be achieved only by practical measures and not windy rhetoric. We are determined to achieve enlargement; to create a Union encompassing all of Europe; to create a Union which is successful, open, outward looking, flexible, democratic and governed by the rule of law.

5.33 p.m.

Lord Wallace of Saltaire: My Lords, I thank the Minister for that extremely helpful reply. I do not intend to detain the House for more than a few moments. This is a subject to which we shall return time and time again in different forms over the next five years. I am sure that it is a subject in which we shall be fully engaged very soon.

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I was a little distressed by how few Members of the House appear to attach as much importance to the membership of Cyprus and Malta as they do to central and eastern European countries. I hope that the Minister will agree with me that the commitment to negotiate with Cyprus and Malta is stronger than it is with the other applicant countries.

The noble Lord, Lord Kennet, drew the attention of the House to the linkage between NATO enlargement, the future of the WEU, and the European Union itself. That is another extremely important question which British political debate needs to take on board rather more strongly.

I was not entirely happy with a suggestion made by the noble Baroness, Lady Blackstone, that we could perhaps have a European Union political area as an interim measure before enlargement. My strong conviction, having spent some time studying the matter, is that early political enlargement is needed and that the European political area proposals have been floated as a means of putting off the economic costs of enlargement. Again, that is a question to which we shall return.

The Minister referred to the Government's commitment to institutional reform. We need to try to keep up, as far as we can, with suggestions being floated in other countries. The other day I was rather shaken to read a speech by the French Foreign Minister in which he suggested that countries including France could give up the right to nominate their own commissioner in favour of having a smaller and more effective Commission. Some of the debates in other countries are running ahead of our own debates and we need to take on board such questions.

I leave your Lordships with the thought of how the European Council of 30 heads of state of government would start its opening tour de table if each head of government limited himself to 10 minutes. It would be five hours before they were able to stop for lunch. Clearly a larger community will have to change quite radically its methods of working. My Lords, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

Intelligence and Security Services

5.36 p.m.

Lord Campbell of Croy rose to call attention to the change in status of the intelligence and security services, to the nature of the functions now appropriate for them and to the need for public acceptance of their roles in the 1990s; and to move for Papers.

The noble Lord said: My Lords, I should make clear the intended scope of the debate. By the "intelligence and security services", I mean the three organisations which have, in the past six years, all been placed on a statutory basis; namely, MI5, MI6 and GCHQ.

I take them in turn. First, MI5, known as the Security Service, has worked mainly on counter-espionage, mostly within the United Kingdom. MI6 is the Secret Intelligence Service--SIS--which British governments

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did not even acknowledge as existing until a few years ago. The Act which placed it on a statutory basis was passed in 1994. GCHQ, which was made statutory in the same Act, also has the task of obtaining intelligence, the letters standing for Government Communications Headquarters.

It may be asked what were the origins of the designations, MI5 and MI6. In their infancy, before or during World War One, the two organisations were allotted spare numbers of military intelligence sections in what was then the War Office. Military intelligence sections 1 to 4 already existed, the numbers denoting different areas of the world. It was a simple and convenient way of providing identifiable labels. Those labels served conveniently for many years.

I am extremely glad that the speakers in this debate know a great deal about the subject. I look forward to hearing their views on situations in the world today. My noble and learned friend Lord Howe of Aberavon, besides having been a distinguished Foreign Secretary, is the Member of the House of Lords on the new Parliamentary Intelligence and Security Committee which has been in existence for only a few months.

I have never been a member of any of the three organisations. However, I worked closely with them for a period when my job in the Foreign Office consisted of continuous liaison with them. I was authorised to mention that publicly two years ago at the time of the Second Reading of the Bill which became the 1994 Act. That experience of mine was a very long time ago. It took place well before I retired from the Diplomatic Service and entered Parliament in the other place 37 years ago.

The changes in status of the three organisations have been taking place at the same time as the ending of the Cold War and the disintegration of the former Soviet Union. The timing has been helpful but dangerous situations remain in the world. I shall expand on that shortly.

In the legislation passed since 1989, the Government and Parliament have felt able to move to a remarkable degree of openness while remaining confident that secrecy can be preserved where it is essential for work and operations. The United Kingdom now has a regime covering all three organisations. It includes special commissioners, a parliamentary supervisory committee, which I mentioned, reporting to the Prime Minister, and complaints procedures. In supporting those innovations, I have always stressed the imperative requirement to protect the sources of intelligence, and especially the agents who often operate in dangerous places. A balance has to be struck and I hope that we have achieved it safely.

As regards openness in Parliament, everything recorded in Hansard is available to every hostile or terrorist regime in the world. I remember at least one incident, a great many years ago, when a Minister gave a reply in Parliament off the cuff, forgetting that the information had come from a secret source. Within a matter of days the source closed down. That is a powerful reason for the special parliamentary committee, established by the 1994 Act, to deal with matters connected with the secret services.

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The end of the Cold War was a blessing for mankind. The world is no longer menaced by a division between two hostile armouries owned by the most powerful nations. Having myself, first in diplomacy and then in Parliament, worked in a small way to that ending--and now having seen it happen, although much more quickly than expected in the later stages--I give thanks for it as I am sure do other noble Lords. Nonetheless, great dangers remain and also great nuisances.

The dangers include the possible possession by intemperate and irresponsible rulers of even small countries of weapons of mass destruction; for example, biological and chemical weapons. I have pointed to that particular danger on two or three occasions in this House within recent months and given the examples of Idi Amin and Saddam Hussein. The dangers also include the fanaticism, sometimes religious, which resorts to terrorism. Only recently we have unfortunately seen renewed outbreaks in the Middle East and even here in the United Kingdom. Good intelligence can help to identify individuals, ringleaders, and also, very importantly, sources of funds.

As for international nuisances, there is drug trafficking, serious organised crime, which can wreck many lives, and money laundering, which is an integral part of the concealment of the illicit gains from such criminality. The intelligence and security agencies are needed to provide the earliest warning, together with continuing information, and to detect the manufacture and transport of materials for bombs or other lethal weapons intended for terrorism or aggressive warfare.

The world remains dangerous also because of the outbreak of small wars and the tense situations which can lead to outbreaks. Some are civil wars which are difficult for the United Nations or other countries to settle or reduce. The United Nations Charter in Article 2, paragraph 7, specifically prohibits intervention in the domestic affairs of a state. So peacekeeping was subsequently adopted as a new concept with procedures which were not in the Charter. Peacekeeping operations have been launched in various parts of the world with mixed receptions and, usually, unpredicted results. Here again, early intelligence reports can be of great value in anticipating troubles.

Parts of Europe and Asia are still unstable as a result of the Soviet Union dividing up into republics and the internal conflicts in the former Yugoslavia. The shock waves have left disputes, and nationalist movements disposed to use violence. We must be ready, too, for ethnic and religious disturbances elsewhere which could lead to serious armed conflicts.

The intelligence services now have a wider role, if they are to monitor events in various parts of the world and give warnings, than their previous main task of scanning the Soviet empire so far as that was possible. Another role of our intelligence agencies which has been extended is confidential collaboration with other countries. In order to defeat international terrorism and organised international crime, especially the traffic in drugs and bombs, we should now be able to co-operate with those countries which a few years ago were hostile, potential enemies. I have the new Russia in mind. Our

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system should now be refined in a way that enables us to exchange certain information with the Russians without prejudicing delicate sources. In a debate a few years ago on the subject, at the time when Mr. Gorbachev was presiding over major changes in the Soviet Union, I expressed the hope that we would in due course reach that degree of co-operation to the detriment and downfall of international criminals.

Russia has its internal problems and admits to the development of a Russian mafia with tentacles spread as far as the United States. The West should be able to help and co-operate in detecting and forestalling illegal, stealthy transactions which bring misery to many thousands of people. Our intelligence agencies have long co-operated with those of our chief allies. The efficiency of their secrecy and security is essential. They must also have confidence in ours--an important consideration when the extent of openness is being decided.

It is providential that my luck in the ballot produced this debate today. As I understand it, in a few weeks' time, after Easter, the House will have the Second Reading of the Security Service Bill which has now arrived from the other place. We shall have time in that debate and during the later stages of the Bill to consider in some detail the Government's proposals that the Security Service should contribute its expertise to helping the law enforcement agencies, in particular the police, to counter organised crime in this country. That will be an additional function of the Security Service. Much will depend in practice on relations and co-ordination with the police who have the task of collecting evidence to warrant prosecution leading to conviction. That is not a function of the Security Service.

Most of the work of MI6 has to remain concealed for obvious reasons. The British public have been presented with a highly entertaining version in the fictional adventures and antics of James Bond. In his case, he is both a secret service officer and an agent which makes it more exciting. In real life the British member of the secret service does a duller, meticulous job which, nonetheless, needs flair and initiative. He or she is in touch with systems or agents who often depend crucially upon that officer's judgment and wisdom.

My assessment of the three services when I worked with them a long time ago, and later when I benefited from the products of their labours and enterprise, was that their members worked diligently and successfully out of the public eye and with their achievements unknown and unrecognised. It is a form of dedication to the service of our country deserving the highest commendation.

Before I leave the subject of MI6 and OO7, I should mention one factor common to Fleming's fiction and real life. During the period when I was working with MI6 I could not fail to notice, as a footnote, that the young women working there were strikingly beautiful, as in the films. I should add that the "Moneypenny" of that time--older, of course, and more senior--was just as charming as the fictitious one, with a lively sense of humour. The new Official Secrets Act allows me to

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divulge that superficial information. I am not sure what the position would have been under the old Official Secrets Act. No one was sure about anything under the all-embracing section in that Act. That was the main reason for replacing it, which the Government sensibly did a few years ago--to the Government's credit--as another extension of openness.

The three organisations are now in the public eye and the reasons for their existence have been openly stated. Their purposes and general roles should be made clear in a way that can easily be appreciated by members of the public. If trouble is not taken to do this, commentators in the media must be expected to be critical, and the public could become suspicious, for example, of apparently unproductive expenditure which in the past was invisible within a secret vote. There could also be complaints about alleged intrusions by the Security Service into the daily lives of citizens.

I look forward to the speech of my noble friend Lord Chesham from the Government Front Bench. Because discretion is needed in addressing these subjects, I have not put any particular questions to him. I hope he will simply comment on progress in the areas I have mentioned, choosing what he feels free to discuss. This is because it is so important to protect sources of intelligence, some of which have taken many years to establish. I beg to move for Papers.

5.52 p.m.

Lord Kennet: My Lords, the noble Lord has surely earned the gratitude of the House for this timely debate before we discuss the Security Service Bill, to which he referred. He mentioned the pleasure he gained from the James Bond stories. That reminded me of the book about the British Secret Service which I most enjoyed reading. It was an Italian book. The frontispiece carried the caption,

    "The headquarters of the British Secret Service",
and comprised a picture of No. 10 Downing Street, seen through the Foreign Office arch. The text opened with a description of the training of British secret agents: it was apparently confined to learning how to use invisible inks and how to jump off battlements at a castle in Devonshire, near London. The pleasant absurdity of that was possible because of the extreme secrecy of the Secret Service in those days. That is something which we have long since forfeited.

Because of the intense and multiple collaboration of our services since 1943 with the American services, I wish to draw attention to what is going on now in Washington. A great deal is going on, partly as a result of the Ames scandal. The CIA traitor Ames and his associates managed over the years to foist greatly exaggerated figures for Soviet military capabilities on a succession of Presidents, and thus on American allies too, including us. The National Reconnaissance Office, which is part of the huge panoply of American quasi-secret organisations, recently built itself a mammoth office block, which it should not have done, and which no one noticed. In addition it managed to hide 2 billion dollars of federal funds in a bank account

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of its own. President Clinton has now taken back 800 million dollars of that, and will use it for the Bosnia operation. I do not know what will happen to the rest.

As a result of those and other irregularities, there has been a great wave of inquiry and self-examination in Washington, as one may well imagine. There are at least four exercises going on which are designed to reform and regroup the entire scene. The extent to which each of these exercises is aware of the work of the others, or is collaborating with them, is quite unclear from outside, but that is nothing new on the Washington scene. Given the historically close links which we have with these services in Washington, this present mood there must affect us and our people quite intimately.

First, there is the Perry-Deutch arrangement, whereby a new National Mapping and Imaging Agency would take over everything. The Pentagon and the Director of the CIA--that is, Messrs. Perry and Deutch respectively--would run it. This is supposed to be up and running in October. Secondly, there is the President's own study--of organisation, we take it--done by a commission chaired by a former Defense Secretary, Mr. Harold Brown. That has already reported. Thirdly, there is another report which has been carried out by the House Intelligence Committee Chairman, Mr. Larry Combest. Fourthly, there is the study being done for Senator Arlen Specter, Chairman of the Senate Intelligence Committee, which is due to come out in April.

Both the second and third items in that list propose that the United States should co-develop "less critical" satellites with the United Kingdom, France and Germany. That means that we would be expected to co-fund. That expectation, in American eyes, is well justified because we obviously cannot build anything like Battlestar Galactica ourselves. Nevertheless we are assumed to want the fruits of Battlestar Galactica when they come about. Battlestar Galactica is the latest catch-name for the panoply of sensors and weapons controllers which the Americans are likely to put into space. Besides our own, and French and German, collaboration with that, Israeli collaboration is already far advanced.

Now, from last July, the CIA has been under presidential orders to conduct economic espionage on America's trade rivals as a top priority. I am not sure how well appreciated this fact is yet in Britain; it is certainly well appreciated in France and Japan, where they have had fairly scandalous experience of it. So it is a complicated scene. On the one hand we have to try to continue our collaboration with a ceaselessly shifting, amalgamating and repartitioning organisation there, but on the other hand we have to live with the fact that part of it is under orders to spy on us.

I imagine that all departments of state are thinking carefully about that latter fact--they should be--as, no doubt, are all British political parties. One thing is certain, and that is that the old British contribution to the Washington intelligence scene--which was to act as arbiters in disputes on interpretation between the competing American bodies--is over. How far all this is from the old simplicities when a secret service was

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really secret, and was indeed so secret that it was legitimate to doubt its very existence! Into this fog of manoeuvre, duplication and confusion our own services will have to fit as best they can, without ever compromising their still undoubtedly superior secrecy. We should all wish them good fortune in the job.

5.59 p.m.

Lord Chalfont: My Lords, I should like to follow the noble Lord, Lord Kennet, in expressing my gratitude to the noble Lord, Lord Campbell of Croy, for giving us the opportunity for a brief debate on this wide and important subject. I shall not follow the noble Lord, Lord Kennet, any further down the road of the American intelligence services, although the subject would make an interesting debate on its own. I should like to concentrate instead on one aspect of the Motion in the name of the noble Lord, Lord Campbell--namely, on the intelligence services.

First, I want to offer a thought on the aspect of the Motion relating to the nature of the functions now appropriate for the intelligence services. My initial premise is that there is not much change in the nature of the functions which are appropriate for our intelligence services, except that perhaps they now have a much heavier responsibility even than they had in the depths of the Cold War.

In military intelligence there is an axiom that the fewer troops one has on one's own side the more powerful must be one's system of intelligence. That has a much wider application. It has an application to our national security. As we have in this country, as a result of the apparent end of the Cold War, proceeded to diminish the strength of our Armed Forces and their equipment, we need to have even more effective and powerful intelligence services than we had when we had larger Armed Forces.

In the trade of intelligence there are two words which often govern the way a service operates. Those two words are "capabilities" and "intentions". We need to know what a potential enemy is capable of doing. In other words, we need to know about his armed forces, his military infrastructure and his entire economic resource capable of conducting and supporting a military operation: namely, his capabilities for conducting military operations. We also need to know an enemy's intentions. We need to know how he plans to use those capabilities.

Therefore, first, we need accurate information about the capabilities of a potential enemy. We need to know as precisely as possible what he has at his disposal. Sometimes, if we have thoughtful and imaginative intelligence systems, we can judge from the capabilities what the intentions might be. One can often tell from how a country deploys or equips its armed forces how it intends to use them.

That is not enough. We also need to know more about the intentions of an enemy. One cannot find that out through the use of satellites and modern technology, however sophisticated it may be. One needs always to have what is known in the jargon as Humint (human intelligence)--the spies and agents of the world of 007,

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who are sometimes nowadays regarded with a certain amount of irony but who are still extremely important elements in a nation's intelligence capability.

It would be fair to ask--and people will ask--whose capabilities and intentions we are talking about. We hear people say that the enemy has gone. The Soviet Union and the communist threat have gone, and with them the threat of surprise attack by Red hordes pouring down to the Channel ports. Therefore, what do we need to know, and about whom do we need to know it? Whose capabilities and intentions do we need to find out about?

A number of examples have already been given by the noble Lord, Lord Campbell of Croy. He spoke of international terrorist organisations. Unless we know a great deal about them, their personalities, their movements and their methods of operation we shall come nowhere near to defending ourselves against that threat to our security. Regional conflicts arise constantly. They have arisen most recently in the former Yugoslavia. Unless we know what capabilities and intentions there are in the region we and our partners will find it much more difficult to conduct even peace-keeping operations. People seem sometimes conveniently to forget that even peace-keeping operations need effective intelligence to be successful.

One aspect that the noble Lord, Lord Campbell of Croy, did not mention, except in another context, is Russia. I have no doubt that the noble Baroness, Lady Park of Monmouth, will have something to say on that subject, and I have no intention of pre-empting her. I say only that it would be extremely unwise of us to suppose that the situation in Russia will remain as it is today, still less that it will become any more stable, pacific or friendly. There is an equal possibility that it will revert, and we may be faced with a hostile Russia. We may even be faced with something like a hostile Soviet Union if the reintegration of the Commonwealth of Independent States should move forward with any degree of scale or speed. Let us not forget that, even though a great deal has happened to the Soviet armed forces and to the Soviet nuclear capacity, the Soviet Union's immensely powerful military capabilities still have a residual force in Russia and in some of the countries of the Commonwealth of Independent States.

Leaving aside all of those matters, an issue which is still of grave concern to us, and which presents a clear need for a powerful intelligence capability, is the proliferation of weapons of mass destruction and the ballistic missiles which can be used to deliver them. Like the noble Lord, Lord Campbell of Croy, I have mentioned the subject several times in your Lordships' House, including in the debate on the Address last year. The theme is now being taken up by politicians even more influential and distinguished than we are.

It is now clear to many people that the greatest threat to stability and security now lies in the spread of nuclear, biological and chemical weapons and the means of delivering them, especially through the use of ballistic missiles. It is generally known now, and certainly widely commented upon, that there are at least a dozen and possibly more countries, some of them third world countries, referred to by some as

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rogue states, which have or will have by the end of the century chemical, biological or nuclear weapons--and in some cases, possibly all three--and the ballistic missiles capable of delivering them over distances of 3,000 kilometres to 6,000 kilometres. I need not dwell too long on the military implications of that fact. I say merely that, if we do not use effective intelligence systems to find out what is happening in those countries, then we shall be laying ourselves open to a threat alongside which the threat of communist aggression may begin to look very mild indeed.

It is worth mentioning that, as some noble Lords will be aware, there is within NATO a senior defence group called DGP which is concerned with proliferation. In December of last year it presented a report on the implications of the proliferation of weapons of mass destruction and the means of delivering them. It brought forward a number of ideas as to the important capabilities that NATO should have in order to meet such a threat. It mentioned, for example, the possibility of some development, some modification, of strategic defence. But at the top of a list of about 14 required capabilities, the one thing that was needed was intelligence. I believe that that has become virtually self-evident.

There is certainly no diminution in the need for our intelligence services; I trust that no one would suggest that. In my view there is not much change in their function. They need to find out what potential enemies of whatever kind are capable of, what their intentions are, and what measures we should take to meet those threats.

I refer to a second aspect of the Motion on the Order Paper: the need for public acceptance of the intelligence and security services' roles in the 1990s. Perhaps I may diverge a little from the view of the noble Lord, Lord Campbell, on that, as also from that of the noble Lord, Lord Kennet. I asked myself whether in the case of our intelligence services, our secret services, we have not already carried open government a little too far. I have never been entirely happy about the constitutional changes which were visited upon our intelligence and security services.

Perhaps I may mention one other little rubric from the world of intelligence. I refer to the need-to-know principle, in which it is clearly laid out that nobody knows anything unless he needs to know it. I believe that that has a wider application too. It is a principle which applies to some aspects of government activity. In this world of transparency and openness, I believe that there are certain government activities which still are, and should be, secret. There are some aspects of government activity, especially in the international field, which the public have no need to know; and certainly not, as some of the popular press would have it, a right to know. I know that that may be a somewhat controversial view to take. However, the mirror image, or the other side of the coin--whichever way one wishes to put it--of open government is that effective Government must not be hampered and damaged by spreading around too much information which people do not need to know.

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I conclude by saying that the one important factor about secret services is that they should be secret--an axiom which is not too widely accepted. I hope profoundly that there will be no greater public attention drawn to our secret services than there needs to be, and certainly not as much as there has been in the recent past.

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