In the 1977–8 pay round settlements averaged over 15 per cent. When Callaghan tried to impose a 5 per cent pay-rise ceiling in July 1978, the relationship between Labour and the unions suffered a spectacular breakdown, despite the attempts of the TUC general secretary, Len Murray, to win support for government policy. There seemed no cure for the ‘British disease’ of repeated strike action and chaotic industrial relations.
Early in 1978, Ramelson was succeeded as CPGB industrial organizer by his deputy, Mick Costello, a hardline Communist whose New Zealand father Desmond (‘Paddy’), a former diplomat turned professor of Russian at Manchester University, was assessed by the Security Service as a KGB agent.65 Security Service Box 500 reports to Whitehall and Special Branches concluded that ‘The Party leadership has had some misgivings about [Mick] Costello’s rather brash manner and an habitual unwillingness to admit to error. Ramelson himself has frequently expressed doubts about his political judgement.’66 The CPGB leadership was reported to be worried that the ‘wages struggle’ against the 5 per cent ceiling on pay rises was insufficiently political (in other words, not adequately focused on attacking the Callaghan government) and that, while the Party maintained ‘continued strength of influence at senior levels among trade union officials’, it was losing ground to the Trotskyists on the shop floor.67 It was also dismayed at the end of 1978 by the extent of Trotskyist influence on the national executive committee of the Civil and Public Service Association (CPSA).68 As the industrial disruption of the Winter of Discontent proceeded, the CPGB mood brightened. A Box 500 report on 29 January described the Party as ‘increasingly enthusiastic about the effects of the public services dispute which it believes could be a significant factor in bringing about opportunities for its political advance’.69
Box 500 reports made clear, however, that the Winter of Discontent was not the result of either a Communist or a Trotskyist masterplan:
Trotskyist groups are finding difficulty in keeping pace with events and in some places are being told by Party officials to concentrate their attention entirely on selling their newspapers. Deason, the industrial organiser of the Socialist Workers Party (SWP), believes that many of their members are daunted by the scale of the action and are not clear how to take advantage of it.
In the four unions at the centre of the Winter of Discontent, the Service reported ‘relatively little subversive influence at national level’. ‘Subversive influence’ was strongest in the thirty-nine-member general executive council of the Transport and General Workers Union (TGWU), which contained nine Communists, two Communist sympathizers and two Trotskyist sympathizers. By contrast, the only ‘subversive’ among the thirty members of the executive council of the General and Municipal Workers Union (GMWU) was a single Trotskyist. Though the National Union of Public Employees (NUPE) had ‘in recent years become notably militant’, its executive council of twenty-six contained only one Communist sympathizer. The Confederation of Health Service Employees (COHSE) had ‘no subversives at executive or full time national official level’.70 The Winter of Discontent was followed by a private ‘acknowledgement by the Communist Party that it has in recent years lost much of its industrial influence at the shop-floor level and that it needs to revitalise its organisation of workplace branches’.
The leading casualty of the Winter of Discontent was James Callaghan. ‘The belief that he enjoyed a unique relationship with the unions, and was a supremely effective agent of industrial partnership, collapsed.’71 Because the Security Service collected intelligence only on the comparatively minor ‘subversive’ influences, its reports did not cover most of the industrial disruption which led Labour to defeat at the polls and were of only secondary importance to the ministers responsible for dealing with the Winter of Discontent.
The Security Service’s 1972 definition of subversive activities as ‘those which threaten the safety or well being of the State and are intended to undermine or overthrow Parliamentary democracy by political, industrial or violent means’ had been accepted both by the Heath government and by its Labour successors during the 1970s. It was quoted in parliament in 1975 and defended by the Home Secretary in 1978.72 In some respects the Service, so far from exaggerating the threat of subversion, had a more realistic view of it than ministers and was less likely than successive governments to see subversion as a key element in industrial disruption. The Service was justified in the mid-1970s in identifying Militant entryism as a subversive threat to Labour Party democracy. Neil Kinnock’s ferocious attack as Labour leader on Militant in the mid-1980s73 strongly suggests that Service assessments during the Callaghan government, at a time when Kinnock had taken a much more relaxed view of the entryist problem, showed prescience rather than alarmism.
The Security Service did, however, devote too much of its resources during the 1970s to monitoring often insignificant political activities of the CPGB and its sympathizers. Part of the explanation was that keeping as full a record as possible of CPGB membership had become one of the Service’s best-established routines and was needed for the vetting process approved by successive governments. In a small but significant minority of cases, Party membership did pose security risks.74 Many of the young desk officers who spent part of their early careers in the Service studying the membership and activities of CPGB branches felt, however, that the detailed attention lavished on them was out of all proportion to their actual importance. As a trainee desk officer in 1969, Stella Rimington was set to study the CPGB in Sussex where she discovered, despite the cornucopia of radical and ‘revolutionary’ movements at Sussex University, that there were few Communist Party members and a high proportion were elderly: ‘As far as I could see not much of interest was happening so, after I had found out what I was supposed to be doing, I whiled away the time reading Dornford Yates novels under the desk.’75 Six years later, little had changed, as one recruit recalls:
As a newly recruited desk officer in September 1975, I spent only 6 weeks in F1C before being fortunate enough to obtain an early release from the sentence of relentless tedium of paper procedures in the section . . . I found it hard to understand why we were spending as much time as we did investigating the activities of Communist districts/branches in, for example Surrey, Sussex or Hampshire, let alone worrying about attempting to identify someone who was presumed to have sympathies with Communism, perhaps by writing for a leaflet, but of insufficient strength to join the organisation itself . . . My contemporaries were of a similar opinion . . . However, what is surprising is that we did not seriously challenge the assumptions of the [Communist] threat. We merely concentrated on escaping as soon as possible to more interesting/challenging desks. We had no doubt that the Trotskyists were a far more interesting target.76
The strongest supporter within the Security Service of detailed monitoring of the CPGB and its fellow-travellers during the Callaghan era was Charles Elwell, F1/0 from April 1974 until his retirement in May 1979. Elwell believed that ‘many’ Communists and their sympathizers were ‘able to exert influence in, for example, education, local government, religious organisations, political parties, local pressure groups etc’. He therefore called for even greater resources to be used to investigate them than they were already receiving.77 Shortly before Elwell retired, he ‘abandoned bureaucratic niceties’ and fired off a minute to the DG and DDG complaining that the Service was not paying enough attention to the threat of subversion:
The Communist threat has become more insidious because of the ‘blurring of the edges between Communism and democratic socialism’. It is therefore more difficult to recognise and to counter. The job of identifying Communists outside the Party – generally known as ‘sympathisers’ – has become more important. It requires in those responsible for it discrimination, judgement, investigating ability, a knowledge of Marxism and the ability to recognise the significance of an indication, which may often be fleeting, of Communist sympathy.78
Elwell’s views, however, were those of a small and dwindling
minority within the Service. They were opposed even by Elwell’s deputy from 1976 to 1979, who believed that the ample flow of intelligence from technical and agent penetration of the CPGB clearly demonstrated its declining political influence and that ‘the subversive threat as a whole was greatly over-hyped, particularly by Charles Elwell.’ When he told Elwell, whom he liked personally, that he did not consider the Communists a serious subversive threat to the Labour Party, Elwell ‘hit the roof’.79
After the May 1979 election, the main pressure for more energetic counter-subversion came not from within the Service but from the new Conservative Prime Minister.80
7
The Thatcher Government and Subversion
Margaret Thatcher took greater interest in the intelligence community than any prime minister since Winston Churchill. But, as her Home Secretary, Willie Whitelaw, told the DG, Sir Howard Smith, at their first meeting after the Conservative election victory, much of Mrs Thatcher’s information about the Security Service’s counter-subversion role during her years as Leader of the Opposition had come from ‘people who knew little or nothing about our work’. Whitelaw told Smith that he wished to be sufficiently well briefed to be able to counter ‘some of the rather extreme advice’ Mrs Thatcher had received.1
The Service’s briefing was relatively reassuring. The rise in Trotskyism during the 1970s, it reported, was more than counterbalanced by the decline in Communist Party membership: ‘Taking the position as a whole, though the threat from subversion is serious and in some ways more evident, it is not greater than 10 years ago.’2 Mrs Thatcher was not convinced. Smith at his first meeting with the Prime Minister found, as he expected, ‘that Mrs Thatcher assumes a greater role and influence on the part of the Communist Party and Trotskyists in the trade union and industrial field than they did in fact enjoy’.3 The Winter of Discontent had strengthened the Prime Minister’s belief in the importance of countersubversion in dealing with industrial disruption. Whitelaw, though more sympathetic to the Security Service view, also believed that secondary picketing and other militant activism during the strike wave ‘showed marks of skilled and highly-coordinated direction’.4
Mrs Thatcher demanded prompt action to deal with the ‘wreckers’ in British industry, and summoned a meeting of the DG, ‘C’ (Sir Arthur ‘Dickie’ Franks) and Lord Rothschild (with whom she had discussed the problem),5 chaired by the cabinet secretary, Sir John Hunt, to come up with ‘solutions’. The Prime Minister, Hunt told the meeting, wanted all the ‘wreckers’ to be identified – which would breach the Security Service charter (the Maxwell Fyfe Directive) of 1952, limiting its role to ‘the Defence of the Realm as a whole, from external and internal dangers arising from attempts of espionage and sabotage, or from actions of persons and organizations whether directed from within or without the country, which may be judged to be subversive of the State’. Non-subversive industrial ‘wreckers’ were not covered. Hunt suggested that the twenty-sevenyear-old directive, written at a time when subversion ‘loomed less large in the country’s problems’, might now benefit from revision. Smith’s arguments in favour of the existing definition of subversion and against attempting to extend it to include all industrial disruption, however, carried the day. The meeting also failed to come up with the straightforward solutions for dealing with the ‘wreckers’ which Mrs Thatcher wanted. The DG argued that ending industrial strife was far more an issue for government policy than for action by the Security Service.
Early in October 1979 Smith learned that Mrs Thatcher had summoned a meeting at Chequers later in the month with Whitelaw, the Foreign Secretary Lord Carrington, the Secretary of State for Trade and Industry Sir Keith Joseph, Sir John Hunt and his successor as cabinet secretary, Sir Robert Armstrong, to ‘consider action to counter hostile forces working for industrial unrest’. The DG was not invited. The meeting was so secret that all three ministers were forbidden to show the Prime Minister’s summons to anyone except their permanent under secretaries.
The Chequers meeting on 21 October decided to set up a small unit in the Cabinet Office to use information from both open and secret sources to try to forestall industrial disruption. The new unit was to report to the cabinet secretary and be subject to the authority of the Home Secretary (with recourse, when necessary, to the Prime Minister). Whitelaw expressed his willingness to increase the number of HOWs to provide intelligence for the unit. In addition to the ministers present at the Chequers meeting, only the Secretary of State for Employment, Jim Prior, was to be informed of its existence. When it was necessary to give other ministers information from the unit, the source would be concealed. F2, John Deverell, then considered one of the Service’s younger high-fliers, was seconded to run the unit, which Service records suggest became a one-man band.6 Sir Robert Armstrong agreed with Deverell that they would ‘firmly eschew any thoughts of black propaganda’ as the risks would far outweigh the likely gains.7 Deverell was tasked instead with submitting proposals for countering specific cases of industrial subversion for approval by the Home Secretary and, if appropriate, the Prime Minister. Whitelaw was enthusiastic, telling Deverell to come and see him whenever he considered there were ‘political angles to be explored’. Mrs Thatcher too made clear her personal interest in the new unit.8 Deverell devised the unit’s first successful ‘ploy’ in response to a strike-call by the Amalgamated Union of Engineering Workers (AUEW) at the government-owned British Leyland (BL) Longbridge plant, following the dismissal on 19 November of the convenor of the shop stewards, Derek ‘Red Robbo’ Robinson, regarded by Thatcher as ‘a notorious agitator’. The strike, she believed, ‘threatened the very survival of BL’.9
Red Robbo, who regarded his nickname as a ‘badge of honour’, had become synonymous with the repeated strikes and disputes which crippled much of Longbridge’s increasingly uncompetitive car production.10 On 21 November 1979 Deverell devised a plan to publicize the record of a September meeting of the CPGB Midland District Committee, attended by Robinson and the Party’s industrial organizer Mick Costello, held to discuss opposition to the BL recovery plan. Costello was horrified to discover that detailed minutes had been taken, believed they would do serious damage to the CPGB if they became public and ordered all copies to be recovered and destroyed. The Security Service, however, had obtained a copy, and, at a meeting with Thatcher and Whitelaw, Deverell gained their approval for it to be passed to the BL chairman, Sir Michael Edwardes. To disguise the source of the minutes, they were placed inside a brown envelope with a Birmingham postmark. Edwardes showed them to the president of the AUEW, Terry Duffy, who was sufficiently impressed to postpone strike action. Edwardes also contacted the Sunday Times, whose journalists tracked down some of those mentioned in the minutes. Eavesdropping and telephone-tapping in King Street provided ample evidence of the dismay of the CPGB leadership.11
Probably inspired by the success of the ‘ploy’ against Red Robbo, Sir Keith Joseph returned to the idea that the Security Service, at least in the public sector, might warn employers when subversives applied for jobs with them. When Deverell ruled this out, Joseph suggested channelling warnings to employers through the Economic League, using the ‘dirty brown envelope technique we had used with Edwardes’.12 Deverell found fewer opportunities for ‘ploys’ than Thatcher and Whitelaw had hoped. Sir Robert Armstrong, however, reported to the Prime Minister in May 1980 that, although comparatively few counter-subversion operations had been mounted, Deverell’s work had had a ‘significant and beneficial effect on the course of events’. Since Deverell was not fully occupied in the Cabinet Office, he was allowed to return to the Security Service, on the understanding that his first priority, when opportunities arose, would remain counter-subversion operations.13 In July 1981, when Deverell was posted out of F Branch, responsibility for these operations was taken on by David Ranson, who had been appointed Director F.14
Besides industrial disruption, the area where the Thatcher government – the Prime Minister and the MoD in particular �
�� most feared the hidden hand of subversion during the early 1980s was in the peace movement, which organized mass protests over the deployment of US cruise missiles on British soil as a dangerous escalation of the nuclear arms race. Though Mrs Thatcher believed that support for CND had passed its peak in 1981, it remained, in her view, ‘dangerously strong’.15 Of especial concern was the possibility of KGB and Communist subversion within the peace movement. Though rarely alarmist in its assessments, the Security Service had taken the view that ‘as CND grew more influential, the potential for subversives to threaten national security through it also increased’. By the mid-1970s CPGB members occupied eight of the fifteen seats on the CND national executive.16 While monitoring Communist influence in CND was clearly within the Service’s remit, the case for opening a temporary file on Monsignor Bruce Kent as a ‘possible Anarchist’ when he became CND chairman in 1977 and for converting this into a permanent file on his election as CND secretary general from 1979 now appears distinctly dubious.17 In April 1982 F1A reported that CND was expanding at such a rate that Kent no longer knew precisely how large its membership was – possibly 30,000 in the national organization and as many as 250,000 in independent local groups. CND would remain a target for Communist and Trotskyist groups because it offered ‘not only access to a broad-based popular movement with growing influence in political fields, but also an opportunity to challenge Government policies in key areas’.18
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