Empire of Secrets: British Intelligence, the Cold War and the Twilight of Empire. Calder Walton

to F-Division in London. MI5’s DSO in Tehran, Alan Roger, explained in one report in December 1944 that although gathering information on Soviet intelligence was not part of his official mission – the Foreign Office ban still outlawed it – he nevertheless thought that it might one day become useful. He was more right than he could have known. The Kiss case collapsed in March 1945, apparently due to bitter mutual mistrust between Soviet and British officials – a forewarning of events that were to follow with the onset of the Cold War.⁶⁸

      Occupied Iraq and Iran gave an early indication of the kinds of problems Britain would repeatedly face in the post-war years, as relations between Western countries and the ‘great bear’ to the east deteriorated. Towards the end of the war, the head of CICI in Baghdad despatched back to London a series of stark warnings about the consequences of Britain pulling out of Iraq and Iran too quickly at the end of hostilities. If it did so, he predicted, both countries would soon be overrun by Soviet intelligence officials, who would seek to turn them into Soviet satellite states. As we shall see, this fear would greatly colour London’s reaction to colonial ‘liberation’ movements in the post-war years, as the Cold War set in.⁶⁹

      As the war in Europe wound down, MI5 and SIS began to address the problem of the Soviet Union in earnest. In December 1944 Sir David Petrie noted that for a long time he had been ‘a complete convert to the view that the role of F. Division will appreciate in importance after the war’. After the end of hostilities in Europe in May 1945, as Petrie was preparing to leave his position as MI5’s Director-General, he circulated a long memorandum ‘on the shape of things to come’, in which he forecast – pessimistically but accurately – that one form of totalitarianism in Europe would be replaced by another. In August 1945 he held a high-level meeting with the Chief of SIS, Sir Stewart Menzies, about the problem of crypto-communists employed on secret work – on which Philby in SIS would certainly have been briefed – and on 5 September 1945 he, Hollis and other F-Division officers discussed at length, the ‘leakage of information through members of the Communist Party’. Their meeting was more significant than either Petrie or Hollis realised. Later that same day, a cypher clerk working at the Soviet embassy in Ottawa, Igor Gouzenko, defected to the West, bringing with him alarming and dramatic evidence of wartime Soviet espionage. It confirmed Britain’s worst fears. The Cold War had begun. However, before MI5 could deal properly with the new situation, it first had to deal with a different and even more urgent threat: international terrorism.⁷⁰

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       ‘The Red Light is Definitely Showing’: MI5, the British Mandate of Palestine and Zionist Terrorism

      A bomb outrage to have any influence on public opinion now must go beyond the intention of vengeance or terrorism. It must be purely destructive.

      JOSEPH CONRAD, The Secret Agent¹

      I have always been clear that the best method of dealing with terrorists is to kill them.

      GENERAL SIR ALAN CUNNINGHAM, High Commissioner for Palestine and Transjordan²

      Despite all of its wartime successes, the British secret state did not emerge from the Second World War in a strong position. Reports from the ‘high table’ of the British intelligence community, the Joint Intelligence Committee (JIC), stated frankly that it had little available intelligence on its ‘new’ enemy, the Soviet Union. The JIC’s immediate post-war reports are revealing as much for what they do not say as what they do. Although it seems incredible with hindsight, between December 1944 and March 1946 – that is, at precisely the time when we would imagine that the JIC would have been focusing on the re-emerging Soviet threat – the JIC was totally silent on the Soviet Union. Taken as a whole, JIC reports from this period do, however, shed light on the origins of the conflict that would shape the whole second half of the twentieth century: the Cold War. We can now see that in the immediate post-war period, during the transition between World War and Cold War, the JIC was relatively optimistic about Britain’s future relations with Moscow. It was certainly not expecting a war to break out between Britain or its allies and the Soviet Union.³

      However, by 1946 JIC reports, which were circulated to Britain’s leading military figures, a small circle of cabinet ministers and top civil servants, had begun to take a much more pessimistic and hard-line approach, and were warning that a war with the Soviet Union could erupt as the result of a series of mutual miscalculations between Western governments and Moscow. This supports the most recent research on the origins of the Cold War, offered by historians such as John Lewis Gaddis and former intelligence practitioners such as Gordon Barrass, which suggests that it arose essentially because of conflicting signals given by the West and the East, and a range of mutual misinterpretations.⁴

      WINNING THE WAR, LOSING THE PEACE

      The essential problem for the JIC was that between 1944 and 1946 it lacked any useful intelligence on the Soviet Union, either from SIS, GCHQ (the new name given to GC&CS at Bletchley Park after 1945) and MI5, or from their counterparts in US intelligence. This is not entirely surprising, given how difficult it was to gather any objective intelligence on the Soviet Union. As with the Third Reich, British and US intelligence found it virtually impossible to penetrate the heavy police and surveillance presence in the Soviet Union, run as a police state, and London and Washington also found it virtually impossible to understand the mindset of the post-war Soviet leadership. Churchill was close to the mark when he famously remarked in October 1939 that the Soviet Union was ‘a riddle wrapped in a mystery inside an enigma’. At the end of the war, MI5’s in-house historian John Curry lamented that the position in which MI5 found itself regarding the Soviet Union in 1945 was the same as it had been regarding Nazi Germany in 1939: it faced a complete dearth of intelligence. In reality, the situation was even worse than Curry and MI5 assumed. From his position as head of Soviet counter-intelligence in Section IX within SIS, Kim Philby almost certainly helped to prepare some of the post-war JIC papers on the Soviet threat. Through the Cambridge spies and other well-placed agents in the West, the Soviet Union was able to obtain the most sensitive secrets of Britain and other Western governments in the post-war years.⁵

      One of the priorities for British and Allied intelligence in 1945 was dismantling Axis intelligence networks. As the end of the war approached, a stream of apparently reliable reports stated that the Nazi leadership was making megalomaniacal plans to rise again if Germany were defeated. These schemes focused on Hitler’s so-called ‘Werewolf’ organisation, through which SS officers planned to orchestrate guerrilla warfare against the victorious Allies. Meanwhile, the German security service (Sicherheitsdienst) was apparently planning to disperse sabotage sleeper agents across Europe and the rest of the world to help create a Fourth Reich out of the rubble of the Third ‘Thousand Year’ Reich. The first alarming reports along those lines came to MI5 in March 1945, when a four-man team of German sabotage agents was captured and interrogated in Allied France. They had been flown in a German-captured US B-17 Flying Fortress deep behind Allied lines in France, from which they parachuted in with instructions and equipment to organise sabotage networks. The agents revealed that their sabotage colleagues had been equipped with a number of poisons, ‘not the usual ampoules of hydrocyanic acid, with which agents have been equipped in recent months to commit suicide after arrest’. Instead, they were planning to kill Allied officers with poisons infused in everyday commodities such as sausages, chocolate, Nescafé, schnapps, whisky and Bayer aspirin. They had also been instructed on how to leave arsenic and acids on books, desks and door handles.⁶

      Alarm was heightened when the Supreme Headquarters of the Allied Expeditionary Force (SHAEF) discovered sabotage plots involving secret weapons such as poisonous cigarette lighters which would kill the smoker; a belt buckle with a silver swastika that concealed a double-barrelled .32 pistol; and germ warfare ‘microbes’ that were to be hidden in female agents’ compact mirrors. SHAEF also obtained some mysterious pellets and brown capsules that would emit fatal vapours when placed