SECURITY (Hansard, 12 November 1964)

§ Dame Irene Ward (Tynemouth)
I am very glad to have this opportunity on the Adjournment to discuss the very important matter of security. I very much regret that I was originally informed that a Treasury Minister would answer the debate. I presume that this 1330 is so though I have not been told if it is to be the Paymaster-General, though, of course, he may be also a Treasury Minister. So far as I am concerned, I should be glad to have an answer to the questions I propose to raise.
I am asking for an assurance tonight in the matter of security. It is, of course, the responsibility of the Prime Minister and the Home Office and it is on this that I want an assurance so that it can be recorded in the Official Report of the House. I want an assurance that there will be no diminution in the security regulations which cover the security of this country, without Parliament being informed.

§ Mr. Deputy-Speaker
Order. I apologise to the hon. Lady for interrupting her, but I am calling the right hon. Gentleman on the Front Bench to order.

§ Dame Irene Ward
That is very kind of you, Mr. Deputy-Speaker. I am delighted.
I am asking for this assurance as there has been so much difficulty and controversy since the new Government took office that I think it right that we should have an assurance on the records of the House. I am asking that there shall be no diminution or alteration in the security regulations without Parliament being informed. Implicit in this is, of course, that there shall be no directive to—and no interference—with the security committee of the Civil Service Commissioners in relation to their responsibilities to deal with anyone who has had any contact with Communist or other organisations which are antagonistic to this country.
It is difficult in Parliamentary life always to keep track of what happens and I think it most important that we should have assurances on this point—that there shall he no whittling down of the responsibility of those who are responsible for our security services without Parliament being informed. That is one assurance which covers two points I am asking about.
I do not want to make a controversial speech—this is a most important matter, which should be treated most seriously—but the country was very disturbed when it was announced that the Prime Minister, in regard to personal appointments, one to himself and one to the 1331 Chancellor of the Exchequer, had decided to waive the regulation that no one of foreign birth should be appointed to any of the Departments dealing with various aspects of the Services and covered by the security regulations.
I am not arguing—I could not do so, in any case—that the Prime Minister has not the right to do this under the present regulations. Of course he has. If I assess the position correctly—and it is difficult for anyone like myself, who is an outsider, to be able to interpret the regulations accurately—the regulation was embodied by the Civil Service Commissioners in 1956, after the unfortunate episode of Dr. Fuchs, since when no foreign-born national, however reliable, has been appointed to any Department covered by the regulations.
That the Prime Minister should rush into taking this responsibility on his shoulders immediately after his appointment caused great anxiety to very many people in this country. I must move very carefully here, but I must say that, this having happened in such a very short time, I do not believe that either the Prime Minister or the Chancellor of the Exchequer has had sufficient experience in security matters to rush into creating a new situation like that. I very much regret it.
I have been following as closely as I can one or two of the new arrangements that have already been made, but until I asked a Question in the House it was very difficult to find out that this arrangement was to take effect on 1st January, 1965. It seems to me that for the Secretary of State for Foreign Affairs or the Secretary of State for Commonwealth Relations to be able to put aside deliberately laid down regulations about foreign-born nationals, and to say whether those people are to be employed in the Foreign Service or the Commonwealth Office, is putting a great responsibility on them. We seem to be almost back to the situation when, by the personal intervention of a Minister—in all good faith—Guy Burgess was established in the Foreign Service.
The Prime Minister's answer about his position has been rather lightly referred to—and I do not like the type of language used in connection with these important matters—by some of the spokesmen sup- 1332 porting the right hon. Gentleman saying that the "security chaps" would take care of the security position of the people who have been appointed. That may well be, but that is why I am asking for this further assurance that there has been, and will be, no alteration in the responsibility of those who administer the regulations under the Civil Service Commissioners security committee without Parliament being informed.
My hon. and gallant Friend the Member for Harrow, East (Commander Courtney), who knows much more about these things than I do, is to follow me, but I take a great interest in these matters, and in view of the hurry in which the Prime Minister has abandoned established practice I felt it absolutely essential to have it made quite clear that if there were to be any alterations of any kind that diminished our security they should not be promulgated without reference to this House, where they can be discussed in detail.

§ Commander Anthony Courtney (Harrow, East)
I wish to support my hon. Friend the Member for Tynemouth (Dame Irene Ward) and to say how grateful I am to her, as I think the House and the country should be, for raising the question of security on the Adjournment Motion. We discuss these matters far too little in this House.
We should realise what a grave effect there might be on the future of our country if our security arrangements are not perfect, as they should be. In the short time available, I wish to draw attention to one anomaly in comparatively recent regulations which I believe seriously handicaps members of our security services in the performance of their duty, and which deserves the attention not only of the House but of the country.
It is known generally, from a number of disturbing security cases over the past few years, that the operations of certain foreign embassies in London include espionage activities carried out under the cloak of the diplomatic immunity and privilege accorded by international convention. I am sure that the hon. and learned Gentleman the Financial Secretary to the Treasury will agree with me in that flat statement of fact.
1333 The privileges and immunities granted to foreign embassies are governed throughout the world by a Convention arrived at three or four years ago to which we and the vast majority of civilised nations subscribe. It lays down certain immunities and privileges. I draw attention to a particular point I have in mind. On 2nd October in the London Gazette there were published the identities of four countries with whom Her Majesty's Government have special bilateral arrangements for the granting of special immunities and privileges to certain personnel of their embassies in this country.
I make a statement here, which I believe to be true, that certain of those embassies—I shall not specify how many or which—come into the category of those which have been operating under the cloak of these immunities to the detriment of the security of this country over many years in the past. I think it anomalous in the extreme that our security services should be handicapped by the fact that these special bilateral immunities and privileges accorded to the members of the missions of these particular four nations in London include practically every single member of the embassy staff. They are well outside and above those privileges which are granted internationally by usage and under the terms of the Vienna Convention, so much so that in these particular embassies in London individual domestic servants, chauffeurs, cooks and bottle-washers have equivalent diplomatic privilege and immunity with their ambassadors.
While that situation exists it surely represents an intolerable strain on our security services. I ask the hon. and learned Gentleman to refer this point, now it has appeared in the London Gazette, to his right hon. Friend so that something can be done about it.

§ The Financial Secretary to the Treasury (Mr. Niall MacDermot)
I think that the whole House knows, as I certainly do, the great concern and interest which the hon. and gallant Member for Harrow, East (Commander Courtney) has in matters concerning security. I have not had notice of the point that he raised in the short speech he made and it was not very easy to follow the precise details from the careful remarks he made. 1334 I cannot, therefore answer them, but, if he will be good enough to write to me, giving me any further particulars he wishes to give, I shall let him have such information as I can, although he will understand if I cannot give very much.
The hon. Lady the Member for Tyne-mouth (Dame Irene Ward) is also known to the House to have had a long interest in matters affecting security. It is an interest which I personally can share with her, because I spent six and a half years of the war in security, or, as it became later known, counter-intelligence. I think that it is a matter for regret that the hon. Lady has allowed her interest in these matters to be diverted into what I regard as a particularly un-English activity, and that is to take part in a mounting attack from the benches opposite on two gentlemen who are not in a position to hit back.
The hon. Lady has not referred at all by name to the two appointments to which she was alluding. They are, of course, the appointments of Dr. Balogh and Mr. Kaldor as advisers to the Government. Their names have been published in the Press and have been referred to by some hon. Members already in our debates.

§ Dame Irene Ward
Surely the hon. and learned Gentleman would agree that, if the Prime Minister takes unprecedented action, it would be very odd if one did not mention the case in Parliament. That is the Prime Minister's responsibilty, not mine.

§ Mr. MacDermot
Perhaps the hon. Lady would wait and allow me to reply to her remarks so that she can see whether it is unprecedented. The hon. Lady appears to think that these appointments represent some change of policy, or the breaking of the normal rules governing the access of foreign persons to secret information or to appointments in the Civil Service. In fact, that is not so at all. The Nationality Rules for appointments to the public service are set out in Regulations by the Civil Service Commissioners in the Civil Service Order in Council 1956, with the approval of the Treasury and the Secretary of State for Foreign Affairs. The relevant Regulations were published in HANSARD the other day in answer to a Written Question by the hon. Lady.
1335 The application of those Regulations to both Dr. Balogh and Mr. Kaldor is as follows. They are both British subjects, both having been naturalised before the war. They would, in fact, both have been eligible for appointment under these rules for the established staff of the Civil Service, since they are British subjects with residence in this country for at least five out of the last eight years. In the case of Dr. Balogh, as he is appointed to the Cabinet Office, he would come within the provisions of a special regulation to which I will refer in a moment.
They are, in fact, not established civil servants. They are both temporary civil servants. The same requirements on nationality normally apply to temporary appointments, but Departments have discretion in the public interest to employ any person in a temporary capacity. Even an alien can be employed though an alien can be employed only if the responsible Minister, with the consent of the Treasury, issues a certificate under the Aliens Employment Act, 1955. It follows, therefore, that in the case of temporary staff the nationality rules are not exclusive, but serve to remind Departments that aliens should be employed only where there is either some special requirement for their service or suitable British staff are not available.
With regard to the question of access to secret papers, this is quite distinct from the nationality rules, because the principle is that no one, whatever his origin, is allowed access to classified information, unless the head of his Department is satisfied that he can be trusted and he is subject to the necessary security inquiries. A special consideration arises in the case of persons of alien origin in case they may be liable to pressure, for example, through having relatives behind the Iron Curtain. Such persons are not given access to classified information, unless the benefit to the country outweighs any security risk. There is a great variation in the degree of risk involved, and it would be wrong to apply too rigid a rule. Each case is considered on its merits and Departments are given discretion to allow cases where the risk is likely to be small.
No change has taken place in the application of these principles by the present 1336 Government, nor have they made any alteration to the security rules since they took office. The position personally of Dr. Balogh and Mr. Kaldor, I would remind the House, is that they have both rendered distinguished service to the country of their adoption. Dr. Balogh, as is well known, is a Fellow of Balliol College, Oxford, and has been since 1945. He has acted as chairman of the Minerals Committee of the Ministry of Fuel and Power besides being an author of many well know works. Mr. Kaldor, apart from advising a number of British overseas territories on economic questions, is a Fellow of King's College, Cambridge, and was a member of the Royal Commission on the Taxation of Profits and Income in 1951–55. He also contributed to Beveridge's "Full Employment in a Free Society."
The regulations have been set out fully in HANSARD and hon. Members will be able to refer to them in detail for themselves. The special provision to which I have referred, which comes under paragraph 2 of Regulation 12, is that in certain offices, which include the Cabinet Office, the requirement that a person shall have been a British subject by birth can be waived by the special permission of the Minister responsible for the Department. There is nothing new in this provision. It is something which was laid down and was applied by the previous Government.

§ Commander Courtney
Could the hon. and learned Gentleman clear up one point? I think this shows the confusion which I and some of my hon. Friends are in. The hon. and learned Gentleman, I am sure perfectly correctly, says that arrangements for the handling of security have not been altered during the time of this Government. I should like to ask this question. It was understood, I think on both sides of the House in the last Parliament, that questions affecting security should normally be dealt with by the Home Secretary unless they were broad questions of policy in which case they would be handled by the Prime Minister personally. May I ask the hon. and learned Gentleman why, then, these questions are being answered by a Treasury Minister?

§ Mr. MacDermot
The question might have been asked a little earlier. The reason is that I am the Treasury Minister 1337 responsible for pay and establishment questions in the Treasury covering the whole Civil Service. The question that has been raised is on security conditions on the employment of persons in the Civil Service. It is that which I am answering. We were given notice by the hon. Lady the Member for Tynemouth of the questions that she would raise and I have been seeking to answer them. I would then refer briefly to—

§ Dame Irene Ward
May I—

§ Mr. MacDermot
No, I cannot give way again.

Hon. Members
Order.

§ Dame Irene Ward
I can stand if I want to. May I have an assurance—

§ Mr. Deputy-Speaker
Order.

§ Mr. MacDermot
I am not prepared to give way any further. I have already given way a good deal.
I want to answer some of the allegations which have been made in this House about Dr. Kaldor in the last few days. At Question Time on 10th November the hon. Member for Surbiton (Mr. Fisher) asked me a question in these terms: In view of the fact that the economic advice hitherto tendered by, for instance, Dr. Kaldor to overseas Governments has usually resulted in a situation of near riots and almost of revolution—I am thinking particularly of British Guiana—is it wise in these circumstances to pay outside economists of foreign extraction to create chaos in Britain?"—[OFFICIAL REPORT, 10th November, 1964; Vol. 701, c. 812.] The assertion in that question is wholly untrue.
On the same evening the right hon. Member for Bexley (Mr. Heath), in his winding-up speech, thought fit to gain a laugh from the House at the expense of a civil servant who was not in a position to reply, in these terms: He has a remarkable reputation of advice to Governments. He has been official adviser to six countries. The net result has been: in two, bitter opposition, in one, the Minister resigned, in one, there was a general strike, in one, the Government fell, and in the last there was a revolution."—[OFFICIAL, REPORT, 10th November, 1964; Vol. 701, c. 953.] None of those statements is true. I am sure that the right hon. Gentleman extracted them from the front page of 1338 the Daily Telegraph. The Daily Telegraph was very careful in mentioning the fact that Dr. Kaldor had tendered advice to certain Governments, not to allege what the right hon. Gentleman alleged, that certain events that occurred afterwards were the result of that advice. He chose to do it. I invite him to repeat that allegation outside the House and to face the consequences of doing so.

§ Mr. Edward Heath (Bexley)
rose—

§ Mr. MacDermot
Only a little time remains at my disposal—

§ Mr. Heath
rose—

§ Mr. MacDermot
—and I will not give way.

§ Mr. Heath
rose—

Hon. Members
Outside the House.

§ Mr. Heath
On a point of order. Is is not customary in the House when a Minister answering an Adjournment debate has given one notice that he is going to attack one that, having made his attack, he should at least give way and give one an opportunity to comment on it?

§ Mr. Deputy-Speaker
That is not a point of order.

§ Mr. MacDermot
I did not give the right hon. Gentleman the Member for Bexley (Mr. Heath) notice that I would attack him merely notice that I would reply to the attacks which he made upon a distinguished civil servant who is not in a position to defend himself—quite a different matter. It is obvious that the right hon. Gentleman is aware that only three minutes remain for me to reply to the debate. I propose to get on with my reply. [Interruption.] Hon. Members opposite are interrupting and I can assure them that this is certainly to do with security.
Let us consider the right hon. Gentleman's allegations. First, he referred to "bitter opposition". That presumably referred to the references in the Daily Telegraph to Dr. Kaldor's advice to the Ceylon Government and the Mexico Government. The Ceylon Government adopted his proposals and they were put into legislation. In Mexico, the proposals were never even published because they were not followed. They were 1339 rejected by the Government there. Thus there was no question of bitter opposition arising.
His next allegation was that in one country a Minister had resigned. That, he alleged, was the result of the proposals. It presumably referred, again, to what appeared in the Daily Telegraph about Dr. Kaldor's recommendations to the Government of India.

§ Sir Douglas Glover (Ormskirk)
rose—

§ Mr. MacDermot
I must get on.

§ Sir D. Glover
On a point of order. Would you give us some guidance, Mr. Deputy-Speaker? What have these economic considerations of Mexico and Ceylon got to do with an Adjournment debate raised by my hon. Friend about security?

§ Mr. Deputy-Speaker
The Minister has not said a word which has yet been out of order.

§ Mr. MacDermot
It is obvious that the hon. Gentleman, by raising spurious points of order, is trying to prevent me from replying to the debate.

§ Dame Irene Ward
Answer me.

§ Mr. MacDermot
I have answered the hon. Lady.
The position in India was that after Dr. Kaldor had made his proposals, which had been adopted by the Finance Minister, there were mounting attacks made on that Minister. He resigned, the reason being due to insurance corporation scandals being revealed involving officials in his Ministry. Apparently in India there is still a custom, which under the last Government we saw fall into desuetude, that Ministers accept responsibility for the acts of people in their Departments.
The next allegation was that in one country there had been a general strike. That, presumably, referred to Ghana where, following the publication of the tax proposals recommended by Dr. Kaldor, there was indeed widespread 1340 opposition from the vested interests who would have suffered from those tax proposals. There was not a widespread general strike but a railway strike. It was a peculiar feature of the settlement of that strike that the strikers required and made as one of their demands the removal of taxes on foreign companies, which would not have affected the strikers in any way. That might give some indication of the source and instigation of that strike.
The final allegation was on the same subject as that of the hon. Member for Surbiton (Mr. Fisher); namely, British Guiana. Following the publication of the proposals for the Budget, which were based on the advice tendered by Dr. Kaldor, there were, it is true, riots. The Commonwealth Secretary in the last Government appointed three judges to hold a commission of inquiry to investigate the causes of those riots. Their conclusions were published in a document published by the Colonial Office and obtainable from the Stationery Office. If any hon. Member wishes to receive a copy of the document, I will be glad to supply one with the relevant passages marked.
They set out all the Budget measures in full and also set out the fact, and commented on this in their report, that It will be seen that there was nothing deeply vicious or destructive of economic security in the Budget. It had been drawn up on the advice of an experienced economist, who could not be said to have any Communist prepossessions. The Budget won immediate approval from many persons. They proceeded to quote favourable comments on it from the London Times and the New York Times. They set out the strong attacks made on the proposals in the Budget by—