18
CHANGING REQUIREMENTS AT
THE END OF THE COLD WAR
‘ N OTHING IS ETERNAL in this world.’ 1 Mikhail Gorbachev’s words of June 1989 about the Berlin Wall proved prophetic: it was torn down the following November. Germany reunified just under a year later. In 1990, Russia declared sovereignty from the Soviet Union and was quickly followed by other members of the communist bloc. After nearly half a century of Cold War, the fall of the Soviet Union was remarkably swift. This rapidity, however, belied the huge significance. It marked a major shift in international politics.
The end of the Cold War had a major impact on the British intelligence community. For the entire careers of most serving intelligence officers, the Soviet Union and international communism had been the primary target of their activity. Unsurprisingly, the JIC had spent the bulk of its existence watching Moscow, counting nuclear weapons and assessing the likelihood of future wars. And yet between 1989 and 1990, that threat suddenly crumbled. It was a rare cause for a typically understated JIC celebration. On hearing that the Soviet Communist Party had been proscribed, Sir Percy Cradock, Chairman of the JIC, invited his colleagues on the committee to join him for champagne. Raising his glass, Cradock toasted: ‘We didn’t have a war, and we did win.’ 2
Western intelligence agencies were caught off guard by the manner in which the Soviet Union collapsed. The CIA, however, has staunchly defended its record. Releasing many of its national intelligence assessments and estimates from the period for scrutiny, the agency has attempted to counter criticisms that the end of the Cold War was an intelligence failure. Even so, a number of senior American officials, from Lawrence Eagleburger, US Secretary of State in 1992, to Robert Blackwell, the CIA’s Soviet specialist in the 1980s, have since admitted to being taken by surprise. 3
British policymakers must have been surprised too, for the JIC seemingly did not foresee the Soviet bloc’s implosion. 4 On 8 December 1989, Charles Powell, Margaret Thatcher’s foreign policy adviser, confessed: ‘We are finding that we are almost daily being taken by surprise by the pace of developments in the Soviet Union and Eastern Europe.’ 5 In stark contrast to the Americans, however, the British government has refused to release any JIC document relating to the end of the Cold War. It is therefore unclear where the JIC went wrong and how its assessments were used by policymakers. Younger members of the Assessments Staff were keenly aware of the importance of the changes made by Gorbachev, but it appears the ‘grandees’ who dominated the JIC were more sceptical. 6 One potential explanation, put forward by Cradock, looks to the JIC’s obsession with missile counting and a consequent tendency to overlook broader economic and political indicators. 7 Detailed analysis however, is a task for future historians.
What is abundantly clear, however, is that the end of the Cold War dramatically changed the landscape of security. It ushered in a new era of instability and uncertainty. In the absence of the long-standing Soviet threat, intelligence actors faced a fundamental reappraisal of priorities and requirements. They had to determine the nature and direction of any new threats, whilst becoming more flexible so as to meet increasingly diverse targets. Forced to justify their existence in the post-Cold War world, this, in practice, meant severe budget cuts. MI5 was forced to make compulsory redundancies for the first time since the end of the Second World War. Similarly, by 1995, GCHQ’s budget had been slashed by £200 million a year. MI6 did not escape either. The Treasury inflicted poorly handled compulsory redundancies on the service. Overall staff levels dropped by 25 per cent, with cuts to senior management going even deeper. This left MI6 with a notably young senior management team. Young talent also formed part of the drive towards flexibility. Instead of retaining permanent and expensive assets on the ground across the world, MI6 sought to insert officers at short notice into a target country. 8
The end of the Cold War also led to a new era of openness and oversight of the intelligence services. The British intelligence machinery emerged from the shadows. Whitehall’s ‘open government’ programme included the gradual release of JIC documents for the first time in history. Meanwhile, the 1994 Intelligence Services Act placed MI6 and GCHQ on a legal footing for the first time. The Act also created the Intelligence and Security Committee (ISC). This was, and remains, a committee of senior parliamentarians (now chaired by Sir Malcolm Rifkind) and is charged with overseeing the expenditure, administration and policy of the UK’s intelligence agencies.
The document reproduced below illustrates these two core themes: changing priorities and increasing oversight. It is an extract from the first ISC annual report, which draws heavily on testimony from the diplomat Paul Lever, then JIC Chairman. Half a decade on from Cradock’s champagne toast, Lever was well aware of the shift in intelligence requirements that had taken place. He informed the new oversight committee that the United Kingdom now faced challenges that were a great deal more varied than those which had characterised the Cold War. Termed ‘functional’ topics, these myriad threats included terrorism, nuclear proliferation, international sanctions, and serious organised crime (such as drug trafficking and money laundering). Towards the end of the 1990s, the challenges of peacemaking and humanitarian interventionism had likely been added to the list. It was a decade of greater uncertainty in terms of threats – sandwiched between the dominance of the Cold War and the so-called war on terror. Lever’s was a similar sentiment to that expressed more poetically by a former US Director of Central Intelligence, James Woolsey. He famously stated in 1993 that ‘having slain the Soviet dragon, the intelligence community now found itself in a jungle full of snakes’. 9
Lever, however, emphasised the JIC’s lack of complacency towards the more traditional threats. The JIC assessed that neither Russia nor any other state belonging to the former Soviet Union posed a direct military threat to the United Kingdom. Despite this, it was certainly not forgotten that Russia still possessed a nuclear arsenal, vast strategic capabilities and the largest armed forces in Europe. Interestingly, Stella Rimington, Director General of MI5, reported that Russian espionage against the United Kingdom was again on the rise by 1995. Similarly, the conflict in Northern Ireland was another threat which transcended the end of the Cold War – although this is unsurprising given its disconnection to the Soviet Union and international communism. Nonetheless, it remained high on the JIC agenda and MI5 was able to approach the Irish challenges with renewed vigour.
Given that the JIC was responsible for tasking Britain’s intelligence agencies, Lever’s articulation of the changing nature of the threat is important. As outlined in the annexed document, in the mid-1990s the committee set requirements annually prior to ministerial endorsement. The JIC’s assessment of the changing priorities in the post-Cold War world therefore had ramifications for targeting and the activity of the individual agencies.
Placing the JIC at the apex of the British intelligence machinery, the ISC report is again interesting because it indicates how each intelligence agency responded to the JIC’s changing priorities. Despite the challenges of uncertainty, change and budget cuts, the heads of MI5, MI6 and GCHQ all recognised the importance of refocusing their efforts. Accordingly intelligence on eastern Europe was dramatically slashed, as revealed in the document.
Demonstrating the new oversight regime, the ISC’s report reached John Major, the Prime Minister. It was then laid before Parliament. Major responded by expressing his encouragement that the British intelligence community had responded rapidly and with flexibility to the changing world scene since the end of the Cold War. 10 This document also recalls the last full decade in which the JIC retained an important coordination function for the UK intelligence community, something which it no longer enjoys. 11
Intelligence and Security Committee
Annual Report 1995
Chairman:
The Rt Hon Tom King CH MP
Intelligence Services Act 1994
Chapter 13
Presented to Parliament by the Prime Minister
by Command of Her Majesty
MARCH 1996
Our work so far
Background
12. We set out first and foremost to build up our knowledge of the Agencies’ individual roles, working methods and current priorities. In our Interim Report in the Spring, * we identified our first major subject for enquiry as:
“how the Agencies have adapted in general to the new situations post-Cold War and, in particular, how tasks and the priorities attached to them have altered, and whether the resources now provided are appropriate to those tasks and used in a cost-effective way”
and gave a number of other major issues on which we proposed to focus as our work developed. These included:
– the extent to which it is appropriate to try to maintain a ‘global reach’ in intelligence terms;
– increasing resource pressures and their effects on Agency capabilities and staff;
– the extent to which the Agencies are able to maintain their ‘core’ capabilities and their major investment patterns and commitments;
– the protection afforded to Agency information and operations;
– the Agencies’ work with the police and other enforcement bodies in the UK, and their relationships with the civil community;
– how the Agencies are coping with the ever increasing flow of openly available information.
13. It is possible to approach all these questions from several different directions: structures and organisational responsibilities, resources and funding, and questions bearing on operations. We decided first to look in the round at the post-Cold War world; address in some detail the reduction in the military threat posed by the former Soviet Union (FSU), and the consequent resource allocation decisions taken in the Agencies; and focus in addition on some of the ‘functional’ issues, * in particular work against serious organised crime, † on which the Agencies have increasingly been tasked by Government and on which they are now concentrating significant proportions of their effort.
Tasking the Agencies
14. We examined the systems for tasking the Agencies. The UK’s requirements for the collection of secret intelligence are set annually by the Cabinet Joint Intelligence Committee (JIC), and endorsed by Ministers. ‡ Intelligence targets are divided into three broad priorities which reflect the importance of particular policy objectives and the significance of secret intelligence in helping to achieve them. § These requirements are elaborated in a series of ‘Guidelines’ papers, which enable SIS and GCHQ to plan the allocation of their resources in more detail. At the working level, the Agencies meet regularly with customer departments to ensure that they are meeting their needs. Outside this formal framework, customers put forward proposals for new or amended requirements, or downgradings or deletions, at any time. The Security Service does not, as yet, ** have ‘customers’ in the same sense as the other two Agencies, but its priorities in terms of threats to national security, and the Service’s plans to counter them, are examined and validated each year by a sub-committee of the Cabinet Official Committee on Security, and approved by Ministers. ††
The changing nature of the threat
15. The Chairman of the JIC told us that the past few years had seen a significant shift in the overall balance of intelligence requirements. With the ending of the Cold War, activity has moved away from traditional NATO-Warsaw Pact concerns towards a more varied range of threats to, and opportunities for, British interests at home and abroad. Increased emphasis is now placed on what are termed ‘functional’ topics, such as terrorism, the proliferation of weapons of mass destruction, serious organised crime * (which is taken to include drug trafficking, money laundering and other international financial crime) and international sanctions. †
16. Attention, however, continues to be paid as a matter of the highest national order of priority to some of the more ‘traditional’ concerns, in particular Russia. The JIC has assessed that neither Russia nor any of the other FSU states currently poses any direct military threat to the UK or to NATO. ‡ Russia, however, retains both a formidable strategic capability and the largest conventional armed forces in Europe; and Russian military equipment, which is of generally high quality, is being aggressively marketed around the world. Intelligence customers’ needs are, therefore, set increasingly in the context of risks of instability and proliferation concerns. Other high priority tasks include the UK’s continuing intelligence needs in relation to Northern Ireland following the 1994 cease-fires; the conflict in the former Yugoslavia, where British forces are operationally deployed; and certain countries in the Middle East. Lower down the priority list, intelligence needs in several regions of the world including Africa and South-East Asia have been considerably scaled down. §
The Agencies’ response
17. It is a measure of the significant shifts in the Agencies’ efforts over the past few years that SIS now devotes only about *** of its operational effort to Russia and the other FSU states , as against almost *** at the height of the Cold War, this being a reduction of about two thirds. The Service considers its current effort to be the absolute minimum that it can safely devote to the target. For GCHQ, about *** of the total Sigint effort is still devoted in one way or another to work on Russia (about a half of the previous level). ** ***.
18. Only rarely in the Agencies’ history have they had to face the major difficulties that are involved in significant shifts of effort and resources. The disintegration of the Soviet Union, however, was followed rapidly by the Gulf War. This led to a rapid, relatively short term, increase in SIS effort devoted to Iraq and other targets in the Middle East, and to a steady increase in counter-proliferation work. Since that time, the longer-lasting Balkan crisis has led to the Service devoting a significant proportion of effort to a target against which there had previously been very little work. These increases, and others designed to meet ‘functional’ †† requirements, in turn necessitated balanced reductions across other areas and, on occasion, the closure of less essential SIS stations abroad. ‡‡
19. GCHQ’s reallocation of resources over the same period followed a similar pattern, with the fall in effort against the FSU mirrored by significant increases in effort on the Middle East and the Balkans, and work on other regions of the world staying roughly constant. Among ‘functional’ topics, there was increased emphasis on work on counter-proliferation, terrorism and serious organised crime in particular. GCHQ has also been altering the balance of expenditure between manpower costs and technical facilities, placing increased emphasis on developing a flexible resource which can quickly be deployed against alternative targets as priorities change. *
20. For the Security Service, a significant reduction in the overall ‘intelligence threat’ posed by the former Warsaw Pact states allowed a consequent reduction to less than half the operational resources required five years ago. † We have been told, however, that covert intelligence activity against the UK by Russian intelligence services is now once again on the increase. ‡ This has led in turn to the reinstatement of some resources that had previously been moved to other areas of work.
21. Taken together with parallel reductions in the effort necessary to counter subversion, these changes meant that resources could be released to work against Irish terrorism, at a time (1992) when the Service was taking on the lead role in countering Republican terrorism on the British mainland. Monitoring Irish terrorist groups and their supporters has involved just under one half of the Service’s operational resources over the past couple of years, and will continue to do so ‘for at least the next year’ in order to produce intelligence in support of the Government’s conduct of the peace process. §
22. The scope of these changes presents major challenges of leadership and management for all three Agencies. The Agency Heads have each made clear to us that they recognise the crucial importance of the most sensitive handling of the reassignments and, in some cases, compulsory redundancies that have proved necessary. We welcome these assurances.
23. In view of these challenges, we also asked a number of questions on, and intend to pursue further, the methods of appointment of the Heads of the Agencies, with particular regard to the identification of successors to Sir John Adye as Director of GCHQ and Mrs Stella Rimington as Director-General of the Security Service. We have already stressed to the Foreign and Home Secretaries respectively the importance, in senior Agency appointments, of a conscious effort to include candidates from outside as well as inside these organisations, which tend by their occupation to be somewhat removed from the normal exchanges that exist between other departments. The Hurn Review of GCHQ shows how outside experience can be most usefully brought to bear.
24. We conclude that there have been significant and unprecedented changes since the end of the Cold War in the tasks all three Agencies are required to undertake for Government. Each has had to respond rapidly and with flexibility to these changes; all must be prepared for further changing demands in the years ahead. The reductions in the Agencies’ work on the former Soviet Union are appropriate to the changing nature of the threat, and have released resources to work on the newer ‘functional’ targets such as proliferation and serious organised crime.
25. We further conclude that the Security Service will need to keep under close review the resources it devotes to work against Russian espionage. On work against the hazard of Irish terrorism, we support the Service’s decision to keep deployed about one half of its total operational resources on this work for at least the next year, and recommend that the recent assumption of responsibility by the Service for the lead in work against Republican terrorism on the British mainland should be maintained .
*
Cm 2873, May 1995, paragraph 10-11.
*
See paragraph 15.
†
See paragraphs 26-30, and footnote 25 on page 16.
‡
Evidence from the Cabinet Office, December 1994.
§
Evidence from the Chairman of the JIC, May 1995.
Evidence from the Cabinet Office, December 1994.
**
See paragraphs 26-29.
††
Evidence from the Cabinet Office, December 1994.
*
See paragraphs 26-30.
†
Evidence from the Chairman of the JIC, May 1995.
‡
Evidence from the MOD, October 1995.
§
Evidence from the Chairman of the JIC, May 1995.
Evidence from SIS, March 1995; evidence from the Chief of SIS, May 1995.
**
Evidence from Director of GCHQ, May 1995.
††
See paragraph 15.
‡‡
Evidence from the Chief of SIS, May 1995.
*
Evidence from the Director of GCHQ, May 1995.
†
Evidence from the Security Service, October 1995.
‡
Evidence from the Security Service, May 1995; evidence from the Director-General of the Security Service, May 1995.
§
Evidence from the Security Service, May 1995; evidence from the Director-General of the Security Service, May 1995.
See paragraph 4.
Notes
1 .
Mikhail Gorbachev, quoted in Benjamin B. Fischer (ed.), At Cold War’s End: US Intelligence on the Soviet Union and Eastern Europe, 1989–1991 (CIA, 1999), available at https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/bo oks-and-monographs/at-cold-wars-end-us-intelligence-on-the-soviet-union-and-easter n-europe-1989-1991/art-1.html#rtoc8 (last accessed 11 November 2013).
2 .
Percy Cradock, In Pursuit of British Interests: Reflections on Foreign Policy under Margaret Thatcher and John Major (London: John Murray, 1997) p. 121; Percy Cradock quoted in Max Hastings, ‘Heroes of the war that wasn’t’, Telegraph website, 5 March 2002, http://www.telegraph.co.uk/culture/books/historybookreviews/3574020/Hero es-of-the-war-that-wasnt.html (last accessed 11 November 2013).
3 .
David Arbel and Ran Edelist, Western Intelligence and the Collapse of the Soviet Union, 1980–1990: Ten Years That Did Not Shake the World (London: Frank Cass, 2003), p. xii.
4 .
Richard J. Aldrich, GCHQ: The Uncensored Story of Britain’s Most Secret Intelligence Agency (London: HarperPress, 2011), p. 465. Christopher Andrew has stated that it took MI5 by surprise – historians can assume that it also therefore took the JIC by surprise (Christopher Andrew, The Defence of the Realm: The Authorized History of MI5 (London: Allen Lane, 2009), p. 771).
5 .
Powell (Strasbourg) to Wall (FCO), also copied to Robin Butler (Cabinet Office), 8 December 1989, RS 020/2/3, Document 70, in Patrick Salmon, Keith Hamilton and Stephen Twigge (eds), Documents on British Policy Overseas, Series III, Vol. VII: German Unification, 1989–90 (Abingdon: Routledge, 2010).
6 .
Gordon Barrass, The Great Cold War: A Journey through the Hall of Mirrors (Stanford, CA: Stanford University Press, 2009), p. 410.
7 .
Richard J. Aldrich, review of Percy Cradock: Know Your Enemy: How the Joint Intelligence Committee Saw the World (London: John Murray, 2002), International History Review 15/1 (2003), pp. 216–18.
8 .
Andrew, The Defence of the Realm , p. 780; Gordon Corera, The Art of Betrayal: Life and Death in the British Secret Service (London: Weidenfeld and Nicolson, 2011), p. 316; Aldrich, GCHQ , p. 495.
9 .
James Woolsey, statement before the Permanent Select Committee on Intelligence, US House of Representatives, 9 March 1993.
10 .
Major to King (chairman, ISC), 26 March 1996, reproduced in Intelligence and Security Committee Annual Report, 1995 , Cm 3198 (London: HMSO, 1995).
11 .
This was transferred in 2009 to the National Security, International Relations and Development Committee Official Subcommittee on Intelligence (NSID(I)(O)).