The Defence of the Realm

by Christopher Andrew

  Despite Line X success in running Michael John Smith and ACE, Operation FOOT had turned the United Kingdom into a hard target for Soviet intelligence. It remained so for the rest of the Cold War. Material smuggled out of KGB archives by Vasili Mitrokhin later revealed that, because of the difficult operating conditions in London, at least six (probably more) British Line X agents either met their case officers outside the UK or were controlled by residencies elsewhere in Europe.109 Operating conditions were also made more difficult by the C Branch advisers to List X firms. The uncharacteristic error made in the Michael Smith case was an exception which proved the rule – evidence of how important protective security was as a defence against Soviet S&T operations. There was a striking contrast with the United States, where failure to limit the size of KGB and GRU residencies combined with widespread weaknesses in US defence contractors’ protective security to produce a haemorrhage of S&T to the Soviet Union. By 1975 FCD Directorate T had seventy-seven agents and forty-two confidential contacts working against American S&T targets both at home and abroad, some of them inside leading defence contractors such as IBM, McDonnell Douglas and TRW. Christopher Boyce, a TRW employee who passed the operating manual of the latest Rhyolite spy satellite to the KGB via his drug-addict friend Andrew Daulton Lee, later testified to a Senate committee that security was so lax in TRW that he and his colleagues ‘regularly partied and boozed it up during working hours within the “black vault”’ housing the Rhyolite project. Bacardi, he reported, was kept behind the cipher machine and a cipher-destruction device used as a blender to mix banana daiquiris and Mai Tais.110 Boyce also claimed that one employee successfully gained entrance to top-secret TRW offices with a security pass containing the photograph of a monkey superimposed on his own.111 Though such extreme lapses in protective security are unlikely to have been common, Soviet intelligence collected more S&T from the United States than from the rest of the world put together. The Pentagon estimated in the early 1980s that probably 70 per cent of all current Warsaw Pact weapons systems were based in varying degrees on Western – mostly US – technology. Both sides in the Cold War – the Warsaw Pact as well as NATO – depended on American know-how.112

  2

  The Heath Government and Subversion

  Edward Heath did not take to Sir Martin Furnival Jones, who continued as director general during his first two years as prime minister. Like Macmillan during the Hollis era, Heath compared the DG unfavourably with the far more clubbable Sir Dick White, whom he had first met while lord privy seal at the Foreign Office during the Blake case in 1961:

  Almost a decade later, I was again much impressed by [White, then Intelligence Co-ordinator]. The head of MI5 was not so convincing. Having described his work, he told me that he had a particular point to make. His people had heard that a church organist was being sent from Poland to London to give a recital, to which I would be invited, in the hope that he could have an interview in order to obtain the latest political information from me. As I had never heard of the organist, nobody else was able to identify him and there was no evidence whatsoever of any such organ recital in London, this kind of nonsense hardly seemed to represent a fruitful way of occupying either my time or that of MI5.1

  Heath’s recollection may well have been garbled. There appears to be no record in Security Service files of any warning to the Prime Minister about a Polish organist’s visit to London.

  Despite his personal dislike for FJ, however, Heath paid close attention to Security Service reports on industrial subversion and proved anxious for more. The first major industrial dispute with which the Heath government had to deal, less than a month after the Conservative election victory, was a dock strike which the TGWU, led by Jack Jones, declared official on 15 July. Next day, because of disruption to food supplies, the government declared a state of emergency. On 17 July Lord Justice Pearson was appointed to head an inquiry which, less than a fortnight later, recommended a 7 per cent pay rise for the dockers. ‘It was’, Heath wrote later, ‘far from an ideal settlement, but we had yet to publish our proposed union legislation and this was not the time or the issue for a bruising struggle . . .’2

  Heath was determined not to be taken by surprise by other industrial disputes. The cabinet secretary, Sir Burke Trend, noted with some concern the new Prime Minister’s ‘propensity to want action and to supply it himself if it was not forthcoming from his Ministers’. After reading a Security Service report entitled ‘Prospects for Industrial Unrest’,3 Heath called for new machinery to provide advance warning of industrial unrest and plan the government response to it. The Whitehall response was unenthusiastic. Sir Philip Allen, PUS at the Home Office, commented that it was not possible to foresee disruption with sufficient precision to make meaningful plans to deal with it: ‘Life was not like that.’ Heath also appeared determined to deal with the ‘evil men’ who, he believed, were out to cause industrial disruption. Trend tried to persuade him that this too was impracticable. He cited what he believed was the cautionary example of Harold Wilson’s public denunciation of seamen’s leaders in 1966 as a ‘tightly knit group of politically motivated men’, only to discover that this was almost the only one of his predecessor’s actions of which Heath wholeheartedly approved. Director F shared Trend’s scepticism about the Prime Minister’s proposals. In present circumstances, he believed, publicly exposing the Communist connections of leading trade unionists might actually be counter-productive.4 Whitehall responded to the Prime Minister’s ‘propensity to want action’ against industrial disruption by the time-honoured device of setting up two new committees – one composed of ministers, the other of senior officials – to consider government strategy to deal with current and pending wage claims and associated industrial disruption. The Official Committee on Subversion at Home, founded in 1969, was to consider the longer-term threats posed by ‘communist and other subversive activities in the United Kingdom’. 5

  At a meeting with the Home Secretary, Reginald Maudling, on 26 October 1970 FJ renewed the application for an HOW on the general secretary of the TGWU, Jack Jones, which had been turned down by Wilson a year earlier. FJ noted afterwards:

  I said that I did not think it at all likely that an investigation of Jones would result in his being charged with espionage under the O[fficial] S[ecrets] A[ct] and this was not the purpose of the proposed exercise. We did, however, think it possible that he was being manipulated by the Russians or was at least under their strong influence . . . At the very least an operation against Jones and his wife would produce intelligence which could be of great value in particular to the Department of Employment and to the Government generally in the field of industrial disputes.

  Maudling was hesitant about agreeing to an HOW, chiefly because of the risks involved: ‘If the operation went astray it would create an intolerable situation between the Government and the Trade Unions.’ However, he agreed to consult Heath,6 who approved the application.7

  Though Jones was not, in fact, ‘being manipulated by the Russians’, the Security Service was right to consider the possibility that he was. Intelligence six years later from the most important British agent of the later Cold War, Oleg Gordievsky, revealed that from 1964 to 1968 the Centre had regarded Jones as an agent.8 The product of the HOW on Jones, discontinued after just over a year, proved to be reassuring, revealing not merely no sign of a continuing Soviet connection but also positive evidence of growing distance between him and the CPGB. The Security Service came to the conclusion that, ‘In present circumstances the realities of Jones’ position as General Secretary of the largest trade union in the country press more heavily on him than any influences the CPGB could bring to bear upon him.’9

  The centrepiece of Heath’s policy on the trade unions was the much heralded Industrial Relations Bill, published on 3 December. The Bill provided for the establishment of an Industrial Relations Court with wideranging powers to enforce ballots and cooling-off periods on registered unions, and, as Heath acknowledged
, provoked ‘fractious exchanges between government and unions for the rest of the parliament’. Even when the Bill became law, unions were able to remain outside the reach of the new court by refusing to register under it.10 The second great industrial crisis of the Heath government began only four days after the publication of the Bill, when power-station workers began a work-to-rule which threatened to disrupt electricity supplies. At midday on 12 December the DDG, Anthony Simkins, was informed by the Service’s duty officer that Maudling had sent a message out of a cabinet meeting to say that he would like to see the DG as soon as the meeting was over:

  As the DG could not be reached, I drove up to London and saw the Home Secretary in his flat at Admiralty House. He told me that the Cabinet had decided to declare a State of Emergency and went on to say that a very important meeting of the four Unions involved in the power go-slow was to be held at the Electricity Council offices on the morning of December 13th . . . The Home Secretary said it was of the highest importance to get intelligence as early as possible about what went on at the meeting.

  . . . The Home Secretary then said that the Prime Minister had enquired about the possibility of getting a device into the room [at the Electricity Council]. I replied that an eavesdropping attack against this target would take us right outside the field in which the Security Service had operated throughout my twenty-five years with it. It would be a departure of great significance to seek intelligence from a target which could not properly be regarded as subversive. The Home Secretary wondered whether our view of what was subversive needed bringing up to date: the Unions were seeking to blackmail H.M.G. and in so doing were threatening the security of the State. This was a point which might be considered at greater leisure.

  Sir Burke Trend asked to see Simkins after his meeting with Maudling and told him that Sir Philip Allen was ‘very uneasy’ about the suggestion of bugging the meeting at the Electricity Council. Simkins noted afterwards: ‘In my presence [Trend] telephoned Allen to let him know that the Prime Minister’s proposal was not being pursued. I emphasized that it was both outside the Charter and could also run very great risks of discovery.’ Though Trend appeared to agree,11 the Home Secretary did not. Three days later Allen reported that Maudling wanted ‘an examination undertaken of the role of the Security Service in relation to industrial action which brought pressure on the government’. 12

  On 27 January 1971 FJ sent Maudling, via Allen, a memo entitled ‘Industrial Action: The Role of the Security Service’ which firmly restated the traditional limits to the Service’s involvement in industrial intelligence collection:

  The tendency over the sixty years of the Security Service’s existence has been to keep the Service within narrow limits and at once to insulate it from involvement in politics while bringing it increasingly under formal controls. Both tendencies have been healthy. Because the work of the Security Service has to remain secret, there is a special obligation to see that it is kept within strict limits erring, if at all, on the side of caution.

  . . . What are the motives of the leaders of Unions, e.g. in the Electrical Power industry, in seeking to obtain what many regard as excessively large wage increases? Their principal motive is the perfectly proper one of ensuring that their members do not lose ground in the inflationary race. The fact that by adopting this course they increase the pace of inflation, does not impugn their motives . . . They are performing the task for which they were elected and, though they may be damaging the State, they cannot properly be described as subversive.

  Nevertheless, the recent tendency towards the use or threat of industrial action as a political weapon introduces a different factor. This has so far been advocated and encouraged by subversive organizations and by individuals on the extreme left . . . It is possible that in an endeavour to outflank the militants, the T.U.C. and Trade Union leaders would give tacit or even open encouragement to such industrial action.

  Would such action with such an objective properly be regarded as subversive and therefore within the sights of the Security Service?13

  That final question seems never to have been answered because the issue did not arise. The dialogue between government and Security Service was confused by some ambiguity over what subversion meant. On 1 February 1971 FJ admitted to Maudling that ‘he had always refrained from trying to define subversion.’14 Subversion was eventually defined in 1972 by Director F (John Jones) as ‘activities threatening the safety or well-being of the State and intended to undermine or overthrow Parliamentary democracy by political, industrial or violent means’: a definition incorporated in an F Branch instruction in January 1973 and quoted in the Lords by a government minister two years later.15

  During Simkins’s farewell call as DDG on the Home Secretary on 28 June 1971, Maudling ‘remarked that he was grateful for the discussions with us about the investigation of subversion in industry. He and the Prime Minister had been a little brash in their approach, but he thought we had kept things on the right lines.’16 The deputy head of Registry minuted to FJ: ‘Further to the earlier request of Mr Maudling for improper investigation you will wish to note that . . . he, & the P.M., recanted!’17 The leadership of the Security Service remained anxious to avoid what it saw as ill-judged Whitehall attempts to change its counter-subversion responsibilities. F1/0 (the Assistant Director in charge of monitoring the CPGB and other subversive organizations) noted the ‘almost complete absence’ in the Annual Review of Intelligence for 1972 by the Intelligence Coordinator of any reference to the Service’s counter-subversion role.18 FJ responded: ‘We deliberately omit a great deal that the Security Service does from the annual review on the ground that we do not want the J.I.C. or the Intelligence Co-ordinator to concern themselves with it.’19

  Despite the Heath government’s anxieties about industrial subversion, at the beginning of 1972 Whitehall gravely underrated the threat from the National Union of Miners (NUM). The miners were the last union from which the government had expected a serious challenge to its pay guidelines. ‘What we did not anticipate’, Heath later admitted, ‘was the spasm of militancy from a union which had been relatively quiet for so long.’20 Over the previous decade the NUM had tamely acquiesced in the closure of over 400 pits and the reduction of the labour force from 700,000 to less than 300,000. Militancy in the coalfields seemed a thing of the past. While strikes in the dockyards and on the railways had become a regular feature of the industrial landscape, there had been no miners’ strike since 1926. From their traditional place at the top of the earnings league, the miners had slipped steadily down the table. Neither the government nor most of the media initially took the miners’ challenge seriously. Bernard Levin in The Times insisted that the miners could not defy the inexorable decline of their industry: ‘The doomed miners’ strike has started exactly one year to the day after the no less doomed post-workers’ strike.’21

  Despite extensive experience of mediating industrial disputes since 1945, the Department of Employment had never handled a miners’ strike. As the Secretary of State for Employment, Robert Carr, later acknowledged, ‘There was no doubt about it, our intelligence about the strength of opinion within the miners’ union generally was not as good as it should have been . . .’22 But it was not the role of the Security Service to provide much of the intelligence which the government wanted. MI5’s responsibilities were limited to the role of the Communists, Trotskyists and fellowtravellers, and it resisted suggestions that it go beyond the limitations imposed by its directive. The government was thus better informed about the role of the extremists and their sometimes secret discussions than it was about the mood of the NUM rank and file. The telecheck on the Communist leader of the Scottish miners, Mick McGahey, revealed that he spoke freely, if not always comprehensibly, over the phone about the strike plans and tactics of the Scottish AreaNUM. The English transcribers’ difficulty in understanding McGahey’s thick Scottish accent was compounded by his heavy drinking; they noted his habit, when drunk, of going to sleep it
off in the Ladies’ Rest Room at NUM headquarters.23 Eavesdropping at King Street revealed that the Party leadership was concerned about how he paid for his binge-drinking. Gollan, the Party leader, was heard to say that ‘McGahey must do a lot of his drinking at the expense of the union.’24

  The bugging of the CPGB’s King Street headquarters revealed that McGahey was in close touch with the Party’s industrial organizer Bert Ramelson. As well as having a first-class degree in law, the Ukrainian-born and Canadian-educated Ramelson had an engaging manner. Even the Sunday Times called him ‘a charming and erudite man with a keen sense of humanity’. The sympathetic history of the CPGB by Francis Beckett, published in 1995, concludes, like Service reports in the 1970s, that Ramelson, rather than any of the Party’s general secretaries, was its most influential post-war member, becoming ‘the face of British Communism in the only place after 1956 where it really mattered, the trade unions’. Pre-war Communists had tried to appeal to the union rank and file over the heads of union leaders. Ramelson pursued the opposite strategy, writing in 1967 that it was ‘tremendously important’ for the Party to realize ‘that it’s no good having militants at the bottom and not at the top. For the first time in history there is now a very important minority of left-wingers at the TUC.’25 Apart from McGahey, Ramelson’s other contacts in the NUM included its general secretary, Lawrence Daly, a Scottish former Communist. According to a Security Service assessment of Daly: