Fiasco Royale: how the ineptitude of Labour betrayed the real Bond

Fraser Nelson reveals the mounting fury within the intelligence community at ministers’ failure to set in place a serious framework for smashing Islamic terrorism. Too little too late is the angry verdict of the spooks Throughout their history, James Bond films have shown an eerie ability to predict national security threats. Dr No (1962) looked beyond the Cold War towards a new brand of international terrorism. In Goldfinger (1964) the menace was rogue nuclear weapons, and in Moonraker (1979), biological warfare. In Casino Royale, released this week, Bond fights terrorists by cutting off their sources of funding — precisely the mission which Gordon Brown has set himself in real life. The tragedy for Britain is that this time both 007 and the Chancellor have got it wrong.

The premise of the 21st Bond film is only marginally more fanciful than the Treasury’s. Both believe that extremism requires huge funds — and that it can be conquered by tracking down the terrorists’ banker (Bond) or shutting their bank accounts (Brown). Yet the intelligence community’s problem is that the terrorists cannot be tracked or controlled in such a way: as we have seen time and again, they require almost no resources, just the promise of untold bounty in Paradise. And the security service has lost years in this deadly race because the government has dithered for so long.

The fiasco of Tony Blair’s terror strategy has been one of the best-kept secrets in Whitehall. As a matter of principle, the Prime Minister never answers questions about MI5 or MI6 — although he enjoys flaunting what he claims is his close relationship with the ‘professionals’. Those affected by his years of indecision have tended to keep their counsel. But fractured pieces of information can be collated to form a wider picture of chaos, disharmony and a sense of betrayal. I wrote a brief item about this in a newspaper last weekend, and found the response remarkable. Since then, I have spoken to a range of sources who concur that the problem is grave and that much of the blame should be attributed to indecisive politicians.

The head of MI5 came as close as she could to making this exasperation in the intelligence community explicit last week. In a rare public speech, Dame Eliza Manningham-Buller said she wished her job was as simple as fiction would have us believe — the spook dramas in which a small team of people hunt a known enemy, one at a time. In reality, MI5 is monitoring 1,600 suspects, with 2,800 staff trying to Afterwards, the spies held a secret party at the Imperial War Museum to celebrate the 70th birthday of the Joint Intelligence Committee. It was a jovial affair where Margaret Beckett, the Foreign Secretary, surprised guests by making a thoughtful and touching speech. Former Qs came out of retirement and mixed with today’s agents. In all these decades of British espionage, with the ever-changing threat, MI5 has never changed as much as it is changing now.

What Dame Eliza did not say is that the political framework within which MI5 and MI6 must operate is in appalling disarray and that the delay in setting a sure trajectory has given the terrorists a long and potentially lethal head start. The current strategy, ‘Project Contest’, was designed in 2002 — a time when Mr Blair thought fighting terrorism meant firing Tomahawk missiles into Kabul. What should be a Bond-style blueprint for rooting out terrorists with urgency and ingenuity reads like the woolliest sociological lecture by Sir Ian Blair into the causes of crime.

In the document, Islamic terrorism is explained in terms of social exclusion. ‘Most Muslims suffer high levels of disadvantage,’ it says — as if this were somehow a reason to blow yourself up on the London Underground. Amazingly, the Sure Start nursery scheme, Mr Brown’s pet project, is billed as a means of helping to defeat terrorism by promoting ‘cohesion in communities’. Of course, the biographies of the London bombers disproved the deprivation theory: they included university graduates, keen cricketers and teachers. One had been received in the House of Commons by an MP. Like the 9/11 bombers, they were not drawn from the underclass.

For more than a year, Mr Blair has known that his terrorism strategy is useless. Last autumn the No. 10 Delivery Unit handed him a confidential report based on an investigation into the way in which Project Contest was seen within Whitehall. Its findings were devastating. ‘The strategy is immature,’ the document said. ‘Forward planning is disjointed or has yet to occur. Accountability for delivery is weak. Real world impact is seldom measured.’ This is what intelligence officials — from Special Branch to the Ms and Qs of Whitehall — thought of their marching orders. Yet, staggeringly, Project Contest has survived for want of a better idea.

So when John Reid became Home Secretary, he inherited a terrorism strategy that was no more fit for purpose than the rest of his dysfunctional department. He has set about rectifying this in a series of confidential Thursday afternoon meetings where MI5 and MI6 meet with various Whitehall officials to try to piece together some kind of plan. One who has been present at these gatherings assures me that Project Contest is ‘not completely rubbish’ and its ideas about preventing terrorism are basically sound. The problem is that no one has implemented the agenda, or any other agenda. In effect, there is no coordinated approach to counter-terrorism.

So five years after the 9/11 attacks and 16 months on from the London bombings, there is still no clear strategy. Mr Reid is holding his meetings in an attempt to piece one together at last. Several proposals are under consideration: a Security Council to tackle terrorism; even the old Tory idea of a homeland security minister. But — intriguingly — there is one policy which neither MI5 nor MI6 is pressing for: the power to detain suspects for 90 days without charge.

The police continue to campaign for such powers, and want Mr Blair to introduce the proposal afresh (it was defeated in the Commons last November). But even now MI5 is making no such recommendation, and I am told Dame Eliza resents Mr Blair’s occasional suggestions to the contrary. There is talk of former senior intelligence officials going public about their concerns, declaring that 90-day detentions would fuel terrorism, as Muslim fundamentalists would be better able to argue that the British state is now openly their enemy.

Critics of Mr Blair’s terrorism strategy (or the lack of it) believe the 90-day detention proposal is exactly the sort of stunt — or ‘eyecatching initiative’ — which has delayed a proper intelligence strategy for so long. It provides political drama, but does nothing to address the structural problems within the existing system.

Dame Eliza would like new laws allowing terror suspects to be questioned after they have been charged. At present, all the questioning must be made before charges are pressed, which is why detectives want to prolong questioning as long as possible. It would require a simple change in the law, and Mr Reid has agreed to it.

The Bond girl in Casino Royale is an official from HM Treasury sent to ensure Bond does not become bamboozled by the financing of terrorism. He finds her irksome at first, then indispensable. In similar spirit, though in rather less glamorous form, Mr Brown has dispatched a Treasury official to keep an eye on Mr Reid’s terror committee. But in their joint attempt to salvage an anti-terrorism strategy, the two great rivals are actually working well together. The Chancellor has indeed offered MI5 all the cash it wants: Dame Eliza is in the unusual position of resisting the bonanza he is keen for. Her agency will suffer, she believes, if it expands too fast.

Mr Brown is doubtless motivated by guilt, or the political equivalent: awareness that he has made an error which must be corrected if he is to avoid future trouble. He froze the intelligence agencies’ budgets when he arrived at the Treasury, and even after 9/11 denied them the increases they asked for. At the time, MI5 was identifying 250 domestic terrorism suspects — or ‘primary investigative targets’, as the spooks say — each year. Within two years this figure had doubled to 500, and Mr Brown was forced by the new realities to concede substantial budget increases. But his failure to start the process earlier, to heed the spooks in his 2002 spending review, is an error the agency is paying for now.

The crisis is not one of funding but of its timing. Dame Eliza’s speech was interpreted in some quarters as a plea for more resources, but she had no such intention. ‘Had it been a coded protest, Reid would not have let her say it,’ one old hand says. ‘MI5 cannot grow any faster. It was on its maximum budgetary growth path before 7/7, as were the other agencies, and it will probably reach its full strength next year.’ But to reach the strength it needs to be today, it should have started five years ago. This delay is born of political indecision.

Dame Eliza was trying to make two main points by implication, I am told. The first is that the typical homegrown Islamic terrorist is far more dangerous than the public understands: he is not the young, amateur extremist talking wildly about making fertilised bombs in his bathtub. Now, the suspects categorised as ‘essential’ by MI5, the highest risk of the three categories, are more likely to be trained by al-Qa’eda professionals — and seeking chemical weapons. Qualitatively and quantitatively, the threat is of a different scale. The deadly sophistication of the plans hatched by Dhiren Barot — the al-Qa’eda terrorist sentenced at Woolwich Crown Court to at least 40 years in prison earlier this month shows how right Dame Eliza is on this score.

Her second point was to prepare the public for a terrorist success. When she gave the figure of 30 separate terrorism plots being kept under surveillance, those familiar with MI5 idiom knew what she was really saying. If one plot is considered active, as the Heathrow plot was in the summer, it consumes literally half the manpower of MI5. If three or four plots go live at the same time, the agency would be overwhelmed. Even now, it is working to such capacity that its headquarters, Thames House, will run out of desk space by Christmas.

Each terror suspect discovered usually leads to several more, so the problem, by definition, increases exponentially. MI5 casework has jumped by 80 per cent this year alone and it is impossible to train agents, analysts and even Moneypennys at the same rate. So in releasing these figures Dame Eliza was effectively saying that she is overwhelmed. This was a message which ministers were happy for her to send out in whatever code she wanted: sooner or later the terrorists will succeed. So we should not blame MI5 (or their ministerial overlords) when this happens.

On Wednesday morning, Mr Reid observed that such a message coming from a politician would not be heeded. ‘But coming from the director-general of MI5 it carries a great deal of weight.’ Not for the first time, the intelligence services are helping the Labour government make a political point. But it is precisely this steady politicisation of the intelligence agencies, which we saw during the Hutton inquiry three years ago, that is the problem for the spooks. Their overall strategy has been marinaded in the same political correctness which infects the rest of government policies. In Dame Eliza’s speech, as with the Queen’s Speech, it is possible to detect the passages inserted by a Labour spin-doctor. Is it really possible that the head of MI5, who spends her time tracking plots to wreak mass loss of life on the British public, thinks that climate change is a ‘worse problem’ than terrorism?

The betrayal of the real Bond would be difficult to depict on screen. It would have to be an incongruous mix of the American series 24 and Fawlty Towers: a chaotic leadership bumbling around making it almost impossible for highly skilled agents to catch the deadly enemy. It would have to show the terrorist enemy spending five years developing and multiplying while the nation’s hapless leaders desperately searched for a strategy. In the real Bond movie, our hero would be betrayed not by anyone in his agency, but by the more mundane reality of ministerial fecklessness.