Intelligence and Security Committee Annual Report for 2010-11

Lord Foulkes of Cumnock Excerpts

Monday 12th December 2011 Grand Committee

[The Marquess of Lothian]

My Lords, I understand that these proceedings may be interrupted. Having served for many years in the other place, I am quite used to being interrupted and to coming back to where I was at the start. I think this is perhaps the best way to get our business done.

This is the first opportunity I have had to speak in this House on the work of the Intelligence and Security Committee, on which, both in the other place and in this House, I have had the great privilege to sit since January 2006. I am not the longest serving member of it—George Howarth remains the longest serving member—but I am one of the longest serving members.

I note that when the previous report was considered by your Lordships on 30 March 2010, a number of representations, including one from the noble Lord, Lord Foulkes of Cumnock, were made for an increase in the number of representatives from this House on the committee. At that time, there was only one, the noble Lord, Lord Foulkes of Cumnock—a much valued colleague on the committee—who on that occasion moved consideration of the report, as I am doing today. I am delighted that those representations were heeded and that there are now two Members of this House on the committee. I am even more delighted that the other, who has not yet joined us—but I am sure he will shortly—is my noble colleague, the noble Lord, Lord Butler, who represents the Cross Benches and brings with him the broad knowledge and unique insight that come from not only having been Cabinet Secretary but having conducted the 2004 review of intelligence on weapons of mass destruction.

[Lord Foulkes of Cumnock]

I was going to raise this point in my speech, but it is perhaps better raised now. The noble Marquess is right, we argued on both sides of the House that the number should increase. He is also right that the noble Lord, Lord Butler, will bring a unique and interesting perspective to the work of the Intelligence and Security Committee. However, is it not strange, ridiculous and unacceptable that there is no Member of the Opposition in the House of Lords on the committee? It is quite ridiculous. The total number of members of the committee, including those from the House of Commons, is nine, of which only three are Members of the Official Opposition. This is a scrutiny committee which challenges the work of the intelligence agencies from time to time, and to have such a poor representation of Labour members—and not one from the House of Lords—is quite unacceptable. That point was made by the Opposition Chief Whip of this House at the time and, unfortunately, was not accepted by No. 10 Downing Street.

[The Marquess of Lothian]

I am sure that what the noble Lord, Lord Foulkes, has said will be heard more widely. I would answer him in this way: as he will see from the report, we are at the moment seeking to have the nature of the committee reformed in a fundamental way. That process is being undertaken at the moment through the Green Paper and I shall come on to it later in my remarks. However, it would be premature to get involved on this before the process has at least got under way and the kind of points made by the noble Lord can be considered.

Even though he is not in his place, I must say that it is a great pleasure for me—as I hope it is for other noble Lords—to have the noble Lord, Lord Butler, on the committee. It means that I can speak more briefly in this debate than otherwise might have been the case because I am confident that he will, with far greater skill, cover all the areas which I fail to cover and may indeed correct me on those areas where I get it wrong.

This is the first annual report of this committee produced under the chairmanship of Sir Malcolm Rifkind, who I am sure all other members of the committee would also like to thank for his excellent leadership over the past year. I should also like to thank the members of the committee from the other place.

As the noble Lord, Lord Foulkes, knows, the ISC is unique in many ways, but perhaps the one that strikes you most when you first join it is the level of consensus on the committee and the absence of party politics from our discussions. That is an important part of the nature of the committee and makes serving on it an even greater pleasure. The abiding ethos of the committee, as noble Lords here today who have served on it in the past know, is one of trust—trust between members, of course, but also, and more importantly, between the committee and those who it is the committee’s responsibility to oversee. We work in an environment where secrecy is often required by the national interest and where, if oversight and scrutiny are to be comprehensive and effective, trust in that secrecy is of the essence.

The same stricture of secrecy also means that the full report, which we are required to submit to the Prime Minister, has to be redacted in certain areas before it is more widely published, to protect that same national interest. As noble Lords will know, these redactions appear as asterisks in the report before your Lordships and have in the past—I must plead guilty of this myself in a previous political incarnation—been the cause of not just complaint but often ridicule. However, in truth, redactions are inevitable and necessary if the committee is to produce a comprehensive report for the Prime Minister. We have conscientiously striven this year to keep redactions to the minimum consistent with the production of that comprehensive report.

This year we have also preceded our report with a section on key themes, which we hope will provide a more structured introduction to the rest of the report by indicating those areas of particular interest to the committee and explaining why they were of such interest. In the past, I always found that these reports tended to be very piecemeal and quite difficult to follow. We felt that it would be for the benefit not just of this House and the other place but of the wider public as well if we produced an introduction of themes that at least gave some shape to the rest of the committee.

I am delighted to see that my colleague, the noble Lord, Lord Butler, has now joined us. At the risk of repeating myself, I said earlier that it is a pleasure to have him on the committee. It makes my speech today shorter, and I am sure he will fill in the gaps and correct me where I have got things wrong.

In general, noble Lords will see from our report that it has been a very busy year for the committee. Indeed, we made a record number of conclusions and recommendations. The report covers several important issues. I do not want to take too much time today; I just want to highlight a few of them.

The first relates to funding for the single intelligence account. In the current economic climate, the committee recognised that the flat cash settlement that the intelligence agencies received in the spending review was fair. This was reflected in what the agencies themselves told us. They will, in broad terms, be able to maintain their key coverage and capabilities. Nevertheless, the committee has recommended that the settlement must be kept under review. The Government must be willing to revisit the funding available to the agencies if there is a significant change in the threat. We cannot prioritise budgets in advance if the security of the country is at stake. The Government’s response to the committee report responded to this and mentioned agility, flexibility and reprioritisation—wonderful words, but I am not certain what exactly they mean in practical terms. It did not mention the possibility of an adjustment in the settlement should that be necessary. In the light of events that are coming over the next 12 months and beyond, we believe that this is important. I would therefore welcome the Minister’s confirmation that, should the threat change significantly—that is the condition—there is scope to revisit the single intelligence account.

I should also like to draw the Committee’s attention to the recommendations on cybersecurity. The threats that exist in cyberspace are familiar ones: theft, fraud, exploitation of the vulnerable and espionage, to name just a few. However, the internet provides criminals and spies with a new avenue of activity, where these deeds can increasingly be carried out with greater anonymity behind a cloak of binary digits and encryption. It is a rapidly growing threat to our security and prosperity, and the ISC in previous reports had urged the Government to increase the funding and priority of this work. Therefore, we welcome the Government’s decision to list cybersecurity as a top-tier threat in their national security strategy, and we welcome the new funding that has been made available to fund cyber-related work. Half of this new money will go to the intelligence agencies, which is very much in our view to be welcomed. However, there is still a great deal of work to be done in this area.

While the committee has welcomed the increased priority being given to cyber, the downside has been the proliferation of new teams and units working in this area. There are at least 18 departments, units and agencies involved in this work in some way, and the committee remains concerned at the risk of duplication and lack of co-ordination in this essential field.

Many other important matters are mentioned in our annual report, including the very welcome establishment of the National Security Council itself, matters relating to detainees and rendition, counterterrorism work and Olympic security, to name but a few. I do not propose to cover them now, as the report sets out our views clearly, and no doubt your Lordships will wish to raise some of them during the course of the afternoon, as I am confident will my colleague, the noble Lord, Lord Butler.

I want to turn now to the wider issues that we mention in the report. One that has exercised the committee this year and which we touch on in our annual report is the future of the committee itself. The ISC has been in existence under statute for some 17 years now. Since it was established under the 1994 Act, the threats that we face have changed and, in response, the intelligence community has had to change as well. The work of the committee has evolved to take account of this. However, public expectation of transparency and openness has increased significantly during this time, and the committee must ensure that it has the powers and the remit necessary to provide reassurance to the public and to Parliament. We therefore made it a priority in the first year of this Parliament to review the committee’s role, structure, remit and powers. We concluded that the current arrangements are now significantly out of date. The committee therefore produced radical proposals for change designed to increase accountability, transparency and capacity for oversight of the intelligence community as a whole. The timing of our review was fortuitous; the Government were in the process of producing a Green Paper, now published, on the protection of intelligence material in the courts and were considering how, if they were to recommend changes in the power of courts, oversight of the agencies should be strengthened to compensate for that. The committee therefore put its proposals for change to the Prime Minister.

Noble Lords will have seen that the Government’s Justice and Security Green Paper for the most part reflects the committee’s recommendations. Under the proposals, the Intelligence and Security Committee will become a committee of Parliament, something that it has not been in the past; it has been a statutory committee of parliamentarians under the authority of the Prime Minister. We are seeking for it to become a committee of Parliament, with the necessary safeguards, reporting to Parliament and to the Prime Minister. The remit of the committee will reflect the fact that the ISC has for some years taken evidence from and made recommendations regarding the wider intelligence community and not just SIS, GCHQ and the security services, which were its statutory responsibility. It will also reflect the fact that the committee is not limited to examining just policy, administration and finances, which were also part of its statutory remit, but encompasses all the work of the agencies. Further, the committee will have the power to require information to be provided.

However, there are two issues on which the Green Paper does not entirely reflect the Government’s proposals, which I wish to raise now with the Minister. The first relates to oversight of operational activity. The work of the agencies cannot be understood fully, let alone scrutinised effectively, without regard to operational matters. The ISC has for many years had access to operational material and has reported on operations publicly and in confidence to the Prime Minister. That includes reports as far back as the 1999 inquiries into Sierra Leone and the Mitrokhin archive, when the committee was still relatively new, through to more recent examples, such as the 2007 inquiries into the 7/7 bombings and the 2009 inquiry into the Binyam Mohamed case. Some of these investigations were at the express request of the then Prime Minister, and others were instigated by the committee itself. They were all specific operations that gave rise to public concern and significant national interest. They were all inquiries in which the committee had access to specific, detailed operational material.

The committee considers that the arrangements that have taken place in practice should now be formalised and that this work should be placed on a statutory footing. However, the Green Paper is less than forthcoming in this regard. It states only that,

“the Government is giving careful consideration to the ISC’s proposal to extend its remit to include operational aspects of the work of the Agencies”.

I underline once again that this is not something new, but something that has been happening over the past few years. Access to operational information is fundamental to the work of the committee. The Government must recognise that to deny the committee access to operational material would be a major step backwards from the current arrangements at a time when the Government say that they are seeking to strengthen oversight. I would welcome my noble friend’s assurance that he and the Government will look forward in this respect and not backwards.

The second issue on which I would welcome clarification from my noble friend is the committee’s resources. Currently, it has limited personnel resources. However, the changes that are envisaged to its powers and remit will increase that requirement and will involve new ways of working. The key difference will be as a result of the committee’s new power to require information to be provided. At the moment, it is reliant on the agencies themselves considering and summarising their information.

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[Lord Foulkes of Cumnock]

My Lords, let me first say how much I welcome this debate, with two reservations—it would not be from me if there were not a couple of reservations. The first is that we are having the debate in Grand Committee and not on the Floor of the House. Secondly, the debate follows two Treasury instruments, which suggests that the House does not give enough importance to the work of the Intelligence and Security Committee and the agencies. I hope that, in the future, the usual channels will think of the possibility of holding the debate on the Floor of the House so that a larger number of people may not only participate but hear about the work, so that it can get to a wider audience.

However, I congratulate my noble friend the Marquess of Lothian. He is my friend because in the other place he and I were paired for many years—we managed to find opportunities to travel the world together—and then we were members of the Intelligence and Security Committee, which I served on for four years. I know how diligently he serves on it and how impressive he is as a questioner on that committee. He has shown by his introduction today the depth of his knowledge and understanding of the committee’s work.

I commend the work done by the noble Lord, Lord Butler, who brings a slightly different perspective to the committee. Now that he is here, I repeat what I said earlier with absolutely no disrespect whatever to him. He is clearly a very powerful and important Member of this House and I know, from the accounts of members of the committee, that he does an extremely good job on it. It is very unfortunate that this House is not better represented on a committee such as this. I argued this, as did others, in the debate on 30 March last year. We succeeded in doubling the representation but it is slightly odd that there is not a Member of the Official Opposition from this House serving on the committee. It was unfortunate that No. 10 saw fit not to take account of the representations made very forcefully by our Chief Whip. It was a pity that that happened.

On 30 March last year, we had a very interesting debate, in which the noble Lord, Lord King, participated. I am sorry he is not here today; he participated very effectively, as those Members who were here will recall—it is included at column GC 544 of the Hansard of that day. He argued very strongly that the credibility of the committee would be much greater if it had an opposition member as chairman. Obviously, that did not carry much weight with the new Government when they took over. Again, I mean no disrespect to Sir Malcolm Rifkind, whom I have known for as long as I have known the noble Marquess, Lord Lothian, and for whom I have the greatest respect. I think that the noble Lord, Lord King, had a very good argument there that, on a committee such as this committee, it helps to increase its credibility if an opposition member chairs it.

Those are my general comments, but I also want to comment on the reform of the committee. We discussed that when I was a member of the committee, and I hope I am not giving away too many secrets—on that committee, we learnt the importance of not giving away secrets. As far as the committee was concerned, I strongly supported the change in the nature of the committee, and I am sure that the noble Marquess will recall that. Indeed, it was the then Prime Minister Gordon Brown who suggested that the committee might become more open, have public sessions and look towards becoming a parliamentary committee of both Houses. He urged movement in that direction. I supported that, but there were members of the committee who did not agree. I am very glad to hear that the committee is now, as I understand it, unanimously in favour of moving towards reform of the structure of the committee. I hope that the Minister will give an indication in his contribution as to whether that has the support of the Government and whether we will see the necessary legislation in the forthcoming Session of Parliament. I think it would be right to move in that direction. I agree with the committee. It would be more transparent and accountable if that took place. There are problems in relation to certain parts of the evidence being dealt with in public, and meetings would have to be held in private, but the more meetings that can be held in public and the more that Parliament is responsible for the nomination of the members of the committee, the better.

The items that I want to raise that arise from the report relate not to the specifics that the noble Marquess raised but to wider questions of national security policy and, specifically, to the role and the nature of the national adviser. I am now a member of the Joint Committee of both Houses of Parliament on the national security strategy, which is under the chairmanship of my right honourable friend Margaret Beckett. We recently had evidence from the current national security adviser Sir Peter Ricketts, and I was disappointed in it in a number of ways. Page 39 of the Intelligence and Security Committee report records that the national security adviser has three main roles and that the second is,

“to act as personal adviser to the Prime Minister on foreign and security policy”.

I think that is a very important point. When Sir Peter Ricketts appeared before us—I am quoting from the uncorrected evidence—he said:

“The second role is effectively as a foreign policy adviser to the Prime Minister”.

He did not say “foreign and security policy”. I think that, with his Foreign Office background, Sir Peter—who is on his way back to the Foreign Office to become our ambassador in Paris—unfortunately sees himself very much as a Foreign Office person. There is a problem in that kind of role of national security adviser where the two roles have been combined. Sir Peter sees it very much in foreign policy terms. With no disrespect to the Minister, Foreign Office officials sometimes have a particular set of blinkers that means that they do not look at the wider context.

There was also a very strange exchange between the noble Baroness, Lady Ramsay of Cartvale, and Sir Peter Ricketts. I will quote from the transcript. The noble Baroness, Lady Ramsay, as well as having served with great distinction on the ISC, has a better working knowledge of the agencies than most of us here. She asked:

“Is it not constitutionally slightly odd that you are writing the confidential annual reports of the heads of intelligence agencies?”.

He told us that he is in effect the line manager of the heads of the intelligence agencies. When I served on the Intelligence and Security Committee, that never occurred to me. It occurred to me that C and the director-general and the head of GCHQ were working independently and with their own, wider authority, reporting directly to Ministers and particularly to the Prime Minister, but Sir Peter Rickets said that,

“agency heads are also Permanent Secretaries of departments in the same way that I was Permanent Secretary of the Foreign Office”.

I do not know about the noble Marquess, or the Minister, or other Members of this Grand Committee, but I never saw them as that when I was on the committee. I wonder whether something has subtly changed over the last couple of years in terms of the reporting arrangements for the heads of the intelligence agencies. That would be unfortunate.

Another thing that came up in our evidence was that Sir Peter Ricketts has the responsibility for co-ordinating the work of agencies throughout government and for this whole aspect of the work of government. When we asked who had replaced the noble Baroness, Lady Neville-Jones, in particular terms—and previously the noble Lord, Lord West, who had a wider remit than just in the Home Office, although Mr Brokenshire deals with it in the Home Office—we were told that each department on the National Security Council has a Minister responsible. But it seems that no one at ministerial level, apart from the Prime Minister himself, is co-ordinating national security right across government—across all aspects, whether it be energy supply, defence or a whole range of other responsibilities. That seems unfortunate. The interesting thing was that Sir Peter thought that he could co-ordinate it as an official but somehow it was impossible for a Minister to take on that role as well.

My penultimate point is that I also raised with Sir Peter Ricketts on that occasion the question about Scotland, and the potential threats to national security arising from the demands of the present Scottish Government for independence. The astonishing thing was that no work is being done, according to Sir Peter Ricketts, to look at the security implications of the increasing demand for Scottish independence. I hope that the Minister will either confirm or deny this. I raised the question, and was supported by a Conservative Member of Parliament on the committee, about the division of oil reserves if there was a dispute on that, or if the policy of the Scottish Government was different from the United Kingdom on the deployment of Trident—as it is—and on membership of NATO. This raises some implications that ought to be thought about.

Those are the only substantive points that I want to raise today. I want to conclude as the noble Marquess concluded, with a word of thanks not just to the members of the intelligence and security services—MI6 or SIS; MI5 or the Security Service; and GCHQ—who do, as the noble Marquess said, a fantastic job. But as I am sure the noble Marquess would concur, we should say a word of thanks to the staff of the committee, who came under sustained pressure during my time on the committee and weathered it extremely well. One advantage of moving towards a different structure for the committee, where the responsibility is not to the Cabinet Office but to Parliament, is that it would protect them in a way that they were not protected during a very difficult situation in the very important and excellent work that they do to service the committee.

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[Lord Butler of Brockwell]

My Lords, it is an honour to represent your Lordships’ House on the Intelligence and Security Committee, not least because I share the view which has been expressed that the committee’s work is very important. It is also a pleasure to serve on such a distinguished and experienced committee, which is very ably chaired by Sir Malcolm Rifkind, with his experience as a former Foreign Secretary and Defence Secretary, and is supported by a first-rate secretariat. I was glad to hear the noble Lord, Lord Foulkes, refer to that. The committee also contains others with ministerial and Front-Bench experience in the Home Office and the Northern Ireland Office, including, notably, the noble Marquess, Lord Lothian, with whom it is a special pleasure for me to share the representation of your Lordships’ House.

As the noble Lord, Lord Foulkes, has referred to the chairmanship of the committee, I see the argument that such committees should have a chairman drawn from an opposition party. However, I am absolutely confident that I speak for the whole committee when I say that when we have the good fortune to have a chairman of the calibre, energy and experience of Sir Malcolm Rifkind, that trumps every other argument.

[Lord Foulkes of Cumnock]

Perhaps I may make two things clear. First, I was repeating the argument that the noble Lord, Lord King of Bridgwater, made last year; it was not I but he who was arguing for an opposition chairman. Secondly, having known Malcolm Rifkind since we served together on Edinburgh City Council, I wholly endorse what the noble Lord, Lord Butler, has said.

[Lord Butler of Brockwell]

My Lords, the importance of the work of the committee has grown because of the greatly increased salience that the intelligence services have gained in our national life. It is a long time—many decades—since their activities were directed only against foreign antagonists of this country. Sadly, the growth of terrorism—first Irish and then other forms of criminality and terrorism, not only Islamic—has meant that the activities of the intelligence services have had also to involve citizens of our own country. It is therefore right that the agencies should no longer operate wholly in the shadows but that legislation should have been passed to put them on a statutory basis, to regulate them and to hold them accountable to Parliament.

At the same time, much of their activity has to remain secret. On that secrecy their effectiveness and the trust and co-operation of allied countries and those who would help them depends. We have to combine accountability with the protection of legitimate secrecy, and that is where a committee of parliamentarians has an important role to play.

Two other circumstances have affected the role of the intelligence agencies in today’s world. One—and this point has not been made this afternoon—is that their work has become much more international. Terrorism, espionage and criminality no longer respect national boundaries, if they ever did. This means not only that we have to work much more closely with allies and other countries with shared interests, but that the agencies within our own country—both outward-looking and inward-looking—have to work much more closely together. The committee has seen that development and it welcomes and encourages it.

The second development is that the advance of technology means that the methods and instruments of intrusion into the lives of individuals and institutions have greatly expanded. The noble Marquess, Lord Lothian, and the noble Lord, Lord Alderdice, rightly referred to cybercrime and the threat that it presents to public and private institutions in our country. Other examples are the extraordinary development of satellite imagery and the more mundane but equally intrusive proliferation of close-circuit television cameras, through which those pursuing their legitimate business around the streets of London may these days be recorded several hundred times in a single day. Quite rightly, the Protection of Freedoms Bill before your Lordships’ House provides for regulation of the uses to which such recordings can be put.

I mention these developments because it must be the responsibility of those who supervise the agencies on behalf of Parliament, within the ring of secrecy, to ensure not only that the agencies are efficient and effective in their vital work, but that they use the instruments of intelligence-collection available to them both proportionately and responsibly. I want to refer to a point made by the noble Lord, Lord Alderdice, picking up on the report, about the remuneration and character of those who work within the agencies. On the character of those people I think that I can reassure him. When one has the privilege of meeting staff of the agencies, one can be certain that it never has been the case that they are conventional, like any other civil servants. There are a lot of unconventional personalities.

Two other things hold them to the agencies—in addition to remuneration, which is very important. One is the importance with which they regard their work, which is a very important factor in morale, and the other is the excitement, originality and opportunities for enterprise within the law. They are the sort of people who can be relied on to operate in that way.

I was Cabinet Secretary when the legislation establishing the Intelligence and Security Committee was passed in 1994. I well remember the hesitation and anxiety with which the Government and agencies regarded the admission of parliamentarians into the ring of secrecy at that time—hesitation and anxiety which I confess I wholly shared. The committee has come a very long way since then in building the confidence of successive Governments and the intelligence community. The fact that it has done so has been due to the responsibility and wisdom shown by successive members of the committee, and I pay tribute to them. Over the past 17 years, there really has not been a major incident to damage that confidence, and that is essential to the work of the committee. The committee needs to be prepared to be a frank critic of the intelligence community when criticism is justified, but also—as was said earlier—its champion when external criticism and antagonism from those who know little of the agencies’ work is unjustified.

The noble Marquess, Lord Lothian, made the point that, as the confidence of the intelligence community and the responsibility and discretion of successive members of the intelligence and security community have grown, the committee’s work has extended well beyond the restrictions in the original legislation. This has benefits for Parliament and the intelligence community itself. The committee’s surveillance is no longer restricted in practice to the administration, policy and expenditure of the Security Service, SIS and GCHQ, the terms in which the original legislation was expressed. It has extended more generally to the work of the intelligence community as a whole, including—retrospectively—specific operations. This has been of general benefit.

However, if the committee is to achieve its full value, it needs to command the confidence not only of the Government and the intelligence community but of Parliament and the public generally. What has happened de facto therefore now needs to be recognised in legislative changes while retaining the necessary safeguards. The committee should now become a parliamentary committee instead of a government-appointed committee of parliamentarians. The wider extent of its activities should be explicitly provided for. Picking up the point that the noble Lord, Lord Foulkes, made, this would increase the independence of the secretariat of the committee who would then become servants of Parliament and not simply members of the Executive. I agree that that would be valuable. The committee should be able to reassure the public that it can require information from the intelligence community and not just request it—require it subject to the veto of a Secretary of State, without being at the mercy of the agencies in respect of the information they can obtain. These are changes that the committee has proposed; in fact, successive committees have proposed them. It is very welcome that the Government have endorsed them in their Justice and Security Green Paper.

As the noble Marquess, Lord Lothian, said, the Government have so far reserved their position on the extent to which the committee should oversee the operational activity of the agencies. Like the noble Marquess, I urge the Government to have confidence about this. I make one point in particular. The committee has already shown itself to be competent in examining specific episodes, often at the Government’s request. However, the public are much more naturally concerned with the operational activities of the agencies—such as their part in the treatment of terrorist suspects or the events leading up to 7/7—than in the agencies’ financing and administration. If the committee is to command the public’s confidence in holding the intelligence community to account, it must reassure them that the agencies are being properly supervised by Parliament. It is essential that the Intelligence and Security Committee be able to play a role in that, as indeed it already has done. It is not as though we want to look at such operations currently; we will always look at them retrospectively. Nor do we want to go as far as the US congressional committees, which are required by legislation to be informed of the agencies’ current operations. Does the Lord Chairman think I am going on too long?