The Defence of the Realm

by Christopher Andrew

  The stringent internal inquiry ordered by Duff, which examined all relevant files and interviewed all relevant Security Service officers, both serving and retired, concluded unequivocally that no member of the Service had been involved in the surveillance of Wilson, still less in any attempt to destabilize his government. When Stella Rimington became director general, she tried ‘once and for all to knock on the head the Wilson plot allegation’ by inviting former Labour home secretaries and other senior Party figures to her office. The attempt failed. ‘Though I did my best to convince them that they were wrong,’ she recalls, ‘I knew that further efforts would be fruitless.’100 A decade later she also failed to convince the Guardian, which accompanied the serialization of her memoirs in 2001 with an article claiming that, while there might have been fewer than the thirty plotters claimed by Peter Wright, ‘there is no doubt that some MI5 officers were out to destabilise Labour ministers.’ Old conspiracy theories never die. This one has not even begun to fade away.

  1 Wilson was made a Knight of the Garter on resigning as prime minister in 1976.

  5

  Counter-Terrorism and Protective Security in the Later 1970s

  By late 1975 the secret talks with the Provisionals, in the view of the British negotiators, had become ‘largely meaningless’:

  Our interlocutors were unable or unwilling to control their followers and there was nothing we could plausibly say to them which would materially affect events – except in so far as their continuing contacts with us gave them a certain status within the Provisional movement which itself enabled them to exercise a limited restraining influence.1

  Though PIRA did not formally end the ceasefire until early in 1976, during the final months of 1975 it embarked on a bombing campaign against restaurants and hotels in the West End of London. A detective in the Met’s Anti-Terrorist Squad identified a distinctive pattern in the PIRA attacks. Most occurred between 6.30 and 9.30 p.m. on weekdays, none took place at weekends, and the bombers sometimes attacked the same target more than once. The Security Service played little part in defeating the London bombing campaign. The campaign was successfully brought to an end by the Metropolitan Police’s Operation COMBO, which for an eight-day period early in December saturated the West End with patrols. When PIRA bombers launched a second attack on Scott’s Restaurant in Mayfair on 7 December, they were spotted by a police unit and pursued to a flat in Balcombe Street where they held the occupants hostage during a six-day siege before surrendering to the Met. The Balcombe Street siege proved to be a turning point in PIRA operations in Britain. Though sporadic attacks by the Provisionals on mainland targets continued, there was no further sustained mainland bombing campaign until 1989.2

  On Harold Wilson’s instructions, James Callaghan, like all other cabinet ministers except for Rees, had been kept in ignorance of the negotiations with the Provisionals during the previous government. His first briefing on the now moribund negotiations did not take place until shortly after he became prime minister in April 1976.3 At the same time Merlyn Rees (SOSNI) sent Callaghan a confident account of the functioning of the intelligence system:

  The first point I should like to make is that we now have a well-established, single machine for processing intelligence and covert work in Northern Ireland. The overall responsibility for the coordination of intelligence operations is exercised by the Director and Coordinator of Intelligence (DCI) . . . [in] the Northern Ireland Office in Belfast. He is responsible to me through the Permanent Under Secretary.4

  Rees had announced to the Commons in March 1976 that henceforth the RUC was to have ‘primacy’ in counter-terrorist operations in Northern Ireland,5 and he told Callaghan that its intelligence collaboration with the army was working well.6 He also praised the ‘breadth of view and . . . knowledge of social and political background’ shown by the DCI and Security Service officers in the Irish Joint Section (IJS).7

  In May 1976 the DG, Sir Michael Hanley, made a three-day tour of the Province – his first extended visit for eighteen months – and was impressed both by the improved performance of the RUC Special Branch (of which he had earlier been critical) and by the new Chief Constable, (Sir) Kenneth Newman, formerly of the Met. Hanley wrote on his return:

  The main emphasis of our support must now be switched to the RUC. Since the NIO was formed in 1972 I have followed a policy of helping the Army first. Of course we must still help the Army, but henceforth our first priority must be the RUC, and we ought to pursue an active and positive policy towards them and be on the alert for any ways in which we can be of assistance.8

  PIRA, Hanley concluded, was losing the ‘armed struggle’:

  The bombing and shooting had not diminished and the PIRA continued to possess a considerable capacity for violence, but their sterile tactics were taking them relentlessly along the road to isolation. It would take time to complete the process, but that must be the aim. The PIRA/PSF [Provisional Sinn Fein] should be hit hard and their claims to ‘respectability’ should be utterly destroyed. It was encouraging that it was now considered practicable to press ahead with the concept of the primacy of the Police, the intention being gradually to return the Province to a system of normal policing with crimes being investigated and criminals brought to court . . . The process would inevitably be a gradual one, but at least it held out the prospect of success in the long term, lowering the security temperature as it progressed. The joker in the pack was the politician.9

  Hanley probably had in mind politicians at Westminster as well as in the Province. James Callaghan, burdened with unhappy memories of his experience of Northern Ireland in the previous Wilson government,10 did not share the cautious optimism of Rees and Hanley that PIRA was losing the ‘armed struggle’. The newly appointed DCI reported after briefing the Prime Minister during his visit to Belfast in July 1976:

  I had the impression that he found the problem of Northern Ireland dispiriting and frustrating and that it was not one that was likely to engage a great deal of his personal attention. In the middle of the talk we were silenced by the noise of the G[eneral] O[fficer] C[ommanding]’s helicopter taking off from the lawn outside the S[ecretary] of S[tate]’s office and the PM somewhat wearily remarked that it reminded him of ‘last days in Vietnam’ [the removal by helicopter of the last occupants of the US embassy in Saigon as the city fell to the Vietcong].11

  Like the DCI, Callaghan saw little point in maintaining the secret backchannel to the Provisionals. On 3 August he approved the DCI’s proposal ‘to distance ourselves’ from further dealings with Brendan Duddy, the ‘Contact’ who had been the main conduit to the PIRA leadership (and over a decade later was to play a significant part in the peace process).12 The IJS concluded at the end of the year: ‘It seems certain that the leadership today is less sophisticated and more hard line than it was when the talks were progressing.’13

  The DCI, probably like many other British intelligence officers, believed that the underlying political problem was the lack of a coherent long-term strategy by the Westminster government: ‘HMG has no clear cut or agreed long term policy for dealing with Northern Ireland and the Irish problem. Its short to medium term policies are based on the fact that Northern Ireland is part of the UK and the assumption that it is likely to remain so for some time.’14 Callaghan’s senior policy adviser, Bernard Donoughue, was equally critical of the government’s lack of a long-term policy.15 The problems posed by PIRA and the Troubles are scarcely mentioned in Security Service records of Callaghan’s occasional meetings with the DG after the summer of 1976.

  Despite the improved co-ordination of intelligence in Belfast by the DCI, Northern Ireland remained an unpopular posting for many in the Security Service. Because of the shortage of volunteers, the letter of appointment issued to new officer recruits in the mid-1970s formally obliged them, for the first time, to serve anywhere ‘including Northern Ireland’.16 Few current staff who had, sometimes reluctantly, accepted postings in Belfast had any previous experienc
e of Ireland, North or South. In the mid-1970s, at a time of horrendous sectarian killings, most probably sympathized with the Service’s assessment at the beginning of the Troubles that the root of the security problem, which the security forces could not solve, was ‘the antagonism of two Communities with long memories and relatively short tempers’.17

  In February 1976, Hanley announced in the DG’s Newsletter that he intended to establish in the summer a new FX Branch to handle all the aspects of Irish counter-terrorism for which the Security Service was responsible: a decision prompted not by any dramatic event but by a gradual increase in F Branch business during the early 1970s. Though F Branch was to retain responsibility for ‘alien’ (international) counterterrorism, FX was to run agents against both Irish and international terrorists as well as against domestic subversives. Director FX was to act as the deputy of Director F, who would continue to have overall control of the work of both Branches.18 This clumsy reorganization left a blurred division of responsibility which was not satisfactorily resolved until FX became a fully counter-terrorist Branch eight years later. Confusingly, FX sections kept the prefix ‘F’.19 The Registry sometimes found it difficult to know whether to route incoming correspondence to F Branch or FX.20

  By the time FX Branch began work, ‘the height of the Arab terrorist threat’ in Britain, retrospectively dated as from 1971 to 1974, was believed to have passed.21 FX agent penetrations of terrorist groups in the later 1970s revealed no plans for direct attacks on British interests.22 Protective security against international (as opposed to PIRA) terrorism thus declined in priority. Given both the decline in the threat and the ease with which Palestinians could use false names or travel on passports issued by other Arab states, it was decided, with some exceptions, that ‘general vetting by the Security Service of Arab visa applications be discontinued’.23

  Counter-terrorism ranked low among Callaghan’s priorities as prime minister. Probably his only CT initiative followed the hijacking in October 1977 of a Lufthansa Boeing 737 by four Arab terrorists. Callaghan personally authorized a secret meeting at 10 Downing Street between the commander of a German commando unit and SAS officers to discuss cooperation in ending the hijack. Soon afterwards two members of SAS took part in storming the hijacked plane at Mogadishu airport. Crucial to the success of the operation was the use of stun grenades which temporarily blinded and deafened those on board the aircraft as it was being stormed. All the passengers were rescued (though the pilot had been shot earlier by the hijackers), three of the terrorists were killed and the fourth captured.24 Callaghan’s decision to publicize British involvement at Mogadishu was questioned by both Hanley and Merlyn Rees, who had left the NIO to become home secretary in September 1976. Rees asked the DG whether he thought the publicity had increased the risk of terrorist attack in Britain. Hanley noted afterwards: ‘I said I thought it was right to suppose that the threat to Britain and British interests had been greatly increased. I had no intelligence to this effect, but it was a reasonable supposition.’25 In fact the Mogadishu operation, following the spectacular success of the Israelis in rescuing hijacked hostages at Entebbe in the previous year, seems to have acted as a deterrent. There were no further terrorist hijacks for the remainder of the decade.

  During Merlyn Rees’s period as home secretary from September 1976 to May 1979, counter-terrorism does not appear to have been discussed at any length during his meetings (usually monthly) with the DG. Those attacks by international terrorist groups which took place in Britain – usually in London – were mostly a spill-over from conflicts in the Middle East rather than being targeted specifically against British interests. Among the most operationally effective groups were tight-knit Armenian terrorist cells whose ultimate aim was to establish an independent Armenia. Their first attack in the UK was the bombing of a Turkish bank in north London on 10 February 1978. The F3 desk officer noted ‘the ruthless efficiency and determination of Armenian terrorists in striking against Turkish diplomatic personnel and premises’ in a number of countries.26 All but one of the terrorist killings in London during the later 1970s were related to rivalries in the Middle East. In 1977 a PFLP assassin killed a former Yemeni prime minister, Abdullah al-Hejiri, his wife and the minister at the Yemeni embassy, and two Syrian intelligence officers planning an attack on an Egyptian office in London were killed when their bomb exploded prematurely. In 1978 the moderate PLO representative in London, Said Hammami, who was being used by Yasir Arafat to sound out Israeli liberals, was assassinated by the Abu Nidal Organization; General al-Naif, a former Iraqi prime minister, was killed by Saddam Hussein’s secret service; and the Bulgarian dissident Georgi Markov was murdered by Bulgarian intelligence, assisted by its Soviet allies. Despite the fact that the KGB had felt bound to assist its Bulgarian ally in assassinating Markov, it was less directly involved with Middle Eastern terrorism than it had been at the start of the decade. After the death of the two main Soviet agents within the PFLP in 1978, the KGB’s direct connection with it appears to have died away.27

  The main lesson learned by the Security Service from the international terrorist attacks in London was the importance of foreign liaison. In F Branch’s view:

  International terrorist activity is not just a series of incidents scattered through various countries taking place on various dates but it is a constant and ongoing affair involving a high degree of mobility on the part of those involved, who, together with their support workers and contacts, are invariably difficult to locate and identify. Therefore when a Western service apparently scores a hit . . . it is important that the service concerned should:–

  i. not repeat not think solely in domestic terms since it may be that other friendly services have unattributable collateral available and/or comments of assistance in assessing the significance of the hit.

  ii. should interpret the need to know criteria as liberally as possible particularly where there is a likelihood that possible targets . . . may transit the country of a friendly service.28

  Unlike international terrorist groups, PIRA was not responsible for a single death in mainland Britain during the later 1970s.29 Though sectarian and terrorist violence continued in Northern Ireland, deaths attributable to the Troubles declined from an average of 264 a year in 1974–6 to 102 a year in 1977–9.30 The Provisionals emerged from the ceasefire of 1975 apparently weaker than before. The IRA veteran and former PIRA chief of staff Joe Cahill later acknowledged: ‘The second half of the 1970s were not good years for republicans. The armed struggle was continuing alright, but there were many volunteers being killed and lifted [captured]. In many ways, the Brits’ strategy was working and the movement had been caught flatfooted.’31 IJS intelligence revealed that the Provisionals were also going through a financial crisis, due to a quarrel with Colonel Qaddafi, probably their main source of funds over the previous five years. In keeping with the eccentric division of responsibilities for dealing with Irish Republican terrorism, since the Qaddafi funds came from outside the UK the Security Service had the main responsibility for monitoring them. According to an IJS report: ‘Libyan–PIRA cooperation had initially gone smoothly, but PIRA [broke] off the contact in 1978 when it became clear that the Libyans were trying to lay down what policy PIRA should follow. The particular Libyan interest had been to promote a bombing campaign in England.’32 Roy Mason, who had succeeded Merlyn Rees as secretary of state for Northern Ireland in September 1976, publicly announced at the end of 1977 that ‘the tide has turned against the terrorists and the message for 1978 is one of real hope.’33 The total of eighty-one deaths in Northern Ireland in 1978 was to be the lowest since 1970.

  In the summer of 1978, however, PIRA succeeded in extending its operations to the continent, where the Security Service, not the MPSB, had the lead intelligence role. Its continental campaign began in earnest on the night of 18–19 August with bomb attacks on eight British army barracks in north-west Germany. No lives were lost. On 24 August two further explosive devices were discovered
in a car in a NAAFI car park at Rheindalen. Two days later a bag containing PIRA bomb-making equipment was found on the banks of the Rhine at Düsseldorf. Though not surprised that the British Army on the Rhine (BAOR) was being targeted, neither the Security Service nor the rest of the British intelligence community gained any advance warning of the beginning of the bombing campaign.34 The Service’s liaison arrangements on the continent against Irish Republican terrorism, a major element in its later strategy, were less developed than those against international terrorism. A decade later, it had still not ‘conclusively’ identified the 1978 bombers.35 PIRA, however, lacked the capacity for a sustained continental campaign. There were no further attacks on the continent for the remainder of 1978. It was not until December that PIRA claimed responsibility for the August bombings in Germany, grandly declaring that it had ‘established [its] ability to strike at British Imperialism anywhere at any time’.36

  Roy Mason’s confidence that the war against PIRA was being won was undimmed by its relatively unsuccessful bombing campaign in Germany. He wrote optimistically on 23 November:

  There should be no relaxation of the security profile in present circumstances, but we should recognise that PIRA are also being undermined by general Government policy and Government measures outside the immediate ambit of the Security Forces. Purely security objectives should not be regarded as paramount: it is important to pursue the general Government policy of encouraging progress towards normality. Improvements in the economic situation in the Province help to reduce any remaining authority enjoyed by PIRA in the minority community.37

  Only a week later, however, PIRA stepped up its bombing campaign in Northern Ireland. On the night of 30 November to 1 December sixteen towns were bombed in a nine-hour period. Simultaneously the Provisional Army Council ordered a pre-Christmas bombing campaign in mainland Britain. On 17–18 December 1978 a total of thirteen bombs exploded or were defused in English cities. Seven people were injured in Bristol, two in London and two in Liverpool. There were no fatalities. Despite the fact that the MPSB retained the lead role, the Security Service was for the first time able to make a significant contribution to intelligence on a mainland bombing campaign as a result of the Irish Joint Section’s success in penetrating PIRA. In the early twenty-first century, the issue of penetration became a major theme in the Republican historiography of the Troubles, with informers – both real and imagined – being blamed for a variety of PIRA failures. Because of the guarantee given to Security Service and SIS agents that their identities will be kept secret indefinitely, all information about them remains classified.