18

Postwar planning

As the war drew to a close SIS, like everyone else, began to think about the postwar situation. In this respect the Foreign Office were quicker off the mark than most, commissioning a review of postwar intelligence needs and organisation in 1943-4 which was strikingly to lay the basis for the future development of SIS.

The Bland Report

During 1943 a number of people began to think about the future of the intelligence machine. In March, Duff Cooper (then head of the Security Executive) suggested to Churchill that a committee be set up to consider the matter, and proposed that there should be a unified Secret Service combining MI5, SIS and SOE into three branches: Information, Security and Operations. Churchill was not so keen. ‘Every Department which has waxed during the war’, he wrote, ‘is now considering how it can quarter its officials on the public indefinitely when peace returns. The less we encourage these illusions the better.’ Churchill was against a committee being set up, but suggested that monthly meetings between the heads of the three organisations (which Desmond Morton could attend on his behalf) might enable ‘causes of friction’ to be ‘smoothed away and common action promoted’.1

Like previous suggestions for the formal co-ordination of secret agencies (for example the 1940-1 Secret Service Committee, or the Joint Planning Staff proposals of May 1942, which had proposed ‘unified control’ of SIS and SOE),2 this proposal came to nothing. A Secret Service Committee meeting was held on 9 April 1943 at which ‘it was pointed out that on matters of common concern liaison between the [secret] Services was already extremely close’. There were monthly meetings, for example, between SOE and the Foreign Office, at which Menzies was present, and ‘S.I.S. and the Security Service had their own extremely close liaison’. It was bluntly agreed that Churchill should be told ‘that monthly meetings of the Secret Services were not considered necessary’ and that meetings could be arranged ‘as occasion required’. Co-ordination, thus, continued on an ad hoc basis, but the problem of intelligence organisation generally remained in the air. When Geoffrey Vickers at the Ministry of Economic Warfare suggested in May 1943 that after the war a special department should be set up to collate economic intelligence, Denis Capel-Dunn, secretary of the Joint Intelligence Sub-Committee, counselled caution. ‘Among the many lessons I have learned during the past 2½ years,’ he wrote, ‘one has been how unsatisfactory it is for small, or indeed large, independent organisations to grow up with indeterminate responsibility, e.g. S.O.E., the Security Executive, with all its ramifications.’ The ‘future of economic intelligence’, he continued, ‘cannot possibly be considered apart from the future of the intelligence organisation as a whole’.3

At about the same time that Vickers’s idea was being discussed, Peter Loxley was also contemplating the matter. The thirty-eight-year-old Loxley was an extremely well-regarded official, ‘quite the most promising of the younger men at the Foreign Office’, who was killed in an air crash flying to the Yalta conference in February 1945.4 Like previous private secretaries to the Permanent Under-Secretary, he provided one of the main links between the Foreign Office and SIS, so much so that the Service was occasionally described in official minutes as ‘Mr. Loxley’s friends’. On 2 April 1943 Loxley wrote to Menzies that postwar planning was ‘in the air’ and it struck him ‘that the time has come when you ought to be doing some serious future planning for S.I.S.’. He thought that a number of matters needed particular attention, including recruitment, which appeared to him to be haphazard, and conditions of employment, which under existing conditions offered neither security of tenure nor pensions. He also felt that the Chief should have a designated deputy. At the moment Menzies was carrying far too great a personal burden, and on the rare occasions when he was absent, there was ‘no one man in charge of S.I.S. as a whole’; instead, ‘four deputy directors, plus Vivian and probably one or two others, each continue to run his own sectional affairs but without anyone of them really overseeing the whole organisation’. Loxley finally raised the question of the relations to be established in the post-war world between British diplomatic missions and SIS representatives abroad.

Perhaps prompted by Loxley, during April 1943 the SIS Board of Deputy Directors were urged to begin thinking about forward and post-war planning. At the end of the month, the chief of staff, Commander Howard, circulated a paper on the ‘Re-establishment of S.I.S. posts in Europe’, which raised questions both of the scale of the planned postwar organisation and of the cover under which representatives would operate. Another quite urgent problem was that of recruitment. The Deputy Director/Army had reported ‘that we have now reached the limit of candidates from the War Office’. The other services, moreover, ‘have been practically barren for some time’. It was suggested that more use might be made of women, ‘at any rate under present war conditions’. This raised an important question. The number of women employed by SIS increased enormously over the war, though almost invariably they were used only in subordinate clerical and office support roles. Even when they were employed, entrenched male attitudes caused problems. Reporting ‘difficulties’ among the secretaries in his station at Bari in southern Italy, John Bruce Lockhart observed that ‘most of the male officers are fairly pudding-like and are either misogynists or else consider that a woman’s place is the bed and the kitchen, certainly not the mess’.

Inside the Foreign Office, Loxley argued that it was a particularly opportune moment to consider the future of intelligence organisation generally. Reflecting the fact that the Office was less pressed by work at this stage of the war than was anticipated would be the case after it had ended, and because he and his colleagues had ‘a very real interest in the matter’, Loxley argued that ‘there is every advantage in our trying to clear our own minds on the subject while there is still time to do so at leisure’. He ‘diffidently’ put forward the case for a ‘single Government intelligence body devoted to the study of military intelligence in the widest sense of the term’. This would be like the Joint Intelligence Sub-Committee (JIC), but ‘more unified’. He was not sure which government department should take responsibility for this organisation, but thought perhaps it would be the Ministry of Defence, although he observed that the Foreign Office had a major interest in ‘what may loosely be called civilian, as opposed to service, intelligence’.5

This matter essentially concerned the organisation of intelligence-assessment, but, as Loxley observed at the end of August 1943, ‘intertwined’ with the role of the JIC after the war was ‘the future organisation of intelligence relating to foreign countries’.6 SIS was central to this discussion and early in October Cadogan appointed a three-man committee under Sir Nevile Bland to report on ‘the future organisation of the S.I.S.’. Bland was at the time ambassador to the Netherlands government-in-exile. Having first been posted to The Hague in September 1938, he had had the disagreeable task of fielding the diplomatic fall-out from the Venlo incident in 1939, an experience which could have prejudiced him against SIS. But he was already well acquainted with intelligence matters, as in the 1920s he had been private secretary to five successive permanent under-secretaries, and had been secretary to the Secret Service Committee in the 1920s. The other two members of the committee were Loxley, Bland’s successor in that crucial private secretary position, and Victor ‘Bill’ Cavendish-Bentinck, who had been chairman of the Joint Intelligence Sub-Committee since the beginning of the war. The surviving documentation confirms that Loxley was the key member of the group. He acted as secretary and prepared the text of the report, which among other things addressed all the issues he had raised in his original letter to Menzies. Bland told Cadogan that the ‘principal credit’ for the report was due to Loxley, who was no doubt also responsible for the lightly ironical tone which suffuses parts of the text. From the very start the committee worked ‘in conjunction with “C”’, and Loxley circulated drafts not only to his fellow committee-members, but also to Menzies at SIS.7

The Bland Report – ‘Future Organisation of the S.I.S.’ – which was completed in October 1944, is a crucial document in the history of the Service. Despite the vicissitudes which SIS had suffered thus far during the war, its continued autonomous existence was powerfully embedded in the report. Its findings formed the basis for the organisation of the Service as it emerged after 1945. And if, as seems to have been Loxley’s intention, the report was designed as a pre-emptive strike, seeking to establish the Foreign Office vision of SIS’s future role and relationship with the rest of government, then it was outstandingly successful. Menzies, too, could hardly have hoped for a more favourable result. Summarising the ‘cardinal points’ of the report for Cadogan, Bland stressed first that SIS and GC&CS ‘must always remain under the direction’ of the Foreign Secretary. Second was the conclusion that ‘no secret organisation should again be allowed to operate abroad’, except under the direction of SIS. Thus was SOE’s future decided (at least by the Foreign Office). Bland further proposed that SIS ‘must start to build up a really secret organisation behind its existing, much too widely known, façade’, and the report also included a remarkably forthright and positive manifesto for the future role of the Service, embodying an assumption that in the postwar world human intelligence would be of enhanced importance:

S.I.S., however costly, is far the cheapest form of insurance in peace time against defeat in war, but to be effective it must be efficient. It can only be efficient if staffed with the best men we can get. We can only hope to get the best men if we can offer them first class pay and prospects. We must never again try to run the S.I.S. on the starvation level of the lean years between 1920 and 1938. It is necessary to emphasise the importance of an efficient S.I.S. now more than ever, inasmuch as it seems unlikely, in the light of developments in cyphering, that we can count indefinitely on obtaining the bulk of our most valuable and secret information through the G.C. & C.S.8

The opening section of the ‘Bland Report’, which laid the basis for the postwar Service.

The report itself is a substantial thirty-eight-page document, in which all aspects of the Service were considered. Recruitment, as Bland had indicated in his letter to Cadogan, was fundamental to its success, but it was also ‘the most difficult of all the problems that at any time face C. If . . . the S.I.S. does not succeed in attracting the right men, first-class results cannot possibly be forthcoming.’ Good pay was essential, and the prewar practice of seeking recruits ‘among men with private means or enjoying a pension from some other service, merely to enable the S.I.S. to economise in salaries’, was firmly dismissed. The committee recommended that ‘men between the ages of 30 and 45 who of their own volition would prefer a change of employment’, as well as ‘a fair proportion of young men when they leave the University’, should be targeted. With a nod towards the modern world they also pointed out ‘that the S.I.S. has been backward in employing women’.9

Bland stated that the ‘main task’ of the SIS was ‘to obtain by covert means intelligence which it is impossible or undesirable for His Majesty’s Government to seek by overt means’. It followed that, with the exception of some counter-espionage work conducted ‘for the better protection of its own agents’, SIS did ‘not collect intelligence for itself but for its clients’. Consequently, if waste was to be avoided, it was ‘at all times important that S.I.S. should know what its clients want’. Requirements should be clearly indicated, and an appendix to the report included Foreign Office and service ministry priorities for SIS in the postwar period. But the committee also thought – and here perhaps is evidence for Menzies’s own discreet role in the formulation of their report – that it was ‘almost equally important that consumers should not try to foist on to the S.I.S. work which it is not really the latter’s function to perform at all’.10 Consumers were ‘apt to do this in three main ways’: by asking SIS for information which, ‘at any rate in the first instance’, could be obtained overtly; ‘by putting enquiries to the S.I.S. on quite trivial matters’ (though what constituted, or who decided, what was ‘trivial’ remained undefined); and by expecting the Service ‘to perform digestive work’, summarising and collating reports, which was properly the task of the consumers.

The Bland committee wanted to sort out the relationship between the Service and its consumers. Central to this was the role of the Foreign Office and Bland recommended that the wartime innovation of seconding a member of the Foreign Office as personal assistant to C should be continued after the war. This official would handle all liaison matters between the two departments, and a second Foreign Office representative would be attached to Major Woollcombe’s Political Section to deal with the transmission of SIS intelligence to the Foreign Office. The committee similarly thought that the policy of appointing senior service representatives to SIS should be continued (though not as deputy directors, but as senior naval/military/air representatives). Bland argued that ‘the ideal arrangement would be attained’ if these officers were ‘of high reputation’ and if it were understood that their career prospects would be enhanced by secondment to SIS.

Turning to the matter of SIS representation abroad, the committee pondered the various arguments for the Service operating under diplomatic or independent business cover. It had been suggested to the committee that, with or without the knowledge of the company concerned, SIS could recruit employees of British firms operating in foreign countries, or ‘suitable Chairmen of British Companies’ could be asked ‘to provide cover in their offices abroad for regular S.I.S. personnel’. In the former instance the committee worried about possible conflicts of interest, and in the latter it thought that ‘such obliging Chairmen are likely to be few’. While the committee were considering this matter, Claude Dansey wrote to Peter Loxley that he had been hearing ‘on all sides that everyone is recommending the use of “Big Business” for S.I.S. in the future’. Dansey was scathing about the possibilities and sent Loxley a memorandum about his difficulties with ‘Big Business’ before the war. ‘The plain truth’, he asserted, ‘is that the men in Big Business can never see beyond their own financial interests’ and would not directly help SIS. From the war itself, he asked, could anyone ‘quote an instance’ of any firm which had ‘ever delivered [a] drawing of machine tools – something which was very hard to come by – I doubt it’. He concluded: ‘The best service business can render to S.I.S. is to give cover to agents whose loyalty is primarily to S.I.S. and not to the business concerned,’ and he was ‘happy to say that there are here and there business firms which will give such cover without any questions, merely asking that every reasonable precaution shall be taken to prevent them being compromised’.11

Bland concluded that the best prospects would come from ‘the creation of small businesses which would in fact be solely run in the interests of the S.I.S.’; the recruitment of established British businessmen who ran their own private concerns and would ‘have no-one to fear in the shape of a board of directors in London’; and ‘the obtaining of cover from semi-national and often non-profit making British institutions with offices in foreign countries’. These could include British railway companies or the British Overseas Airways Corporation. Another possibility was the British Council, though it was somewhat grumpily noted that the Council had ‘never been ready in the past to lend the smallest assistance to the S.I.S.’.

As for official cover, which hitherto had in some cases been highly problematic, the committee had ‘no hesitation in recommending that, in the absence of very strong reasons to the contrary’, the Foreign Office should accommodate SIS personnel, though not necessarily with diplomatic or consular rank. ‘The advantages of obscurity’, they noted, ‘may often outweigh those of official standing.’ No single title, moreover, should be reserved for SIS representatives, and ‘it would seem desirable to ring the changes and to use as well, according to circumstances, such titles as Assistant Naval, Military or Air Attaché or Assistant Commercial Secretary. We note’, continued the report dryly, ‘that consumer Departments are always eager to receive high-grade secret intelligence, but that they are apt to show much less enthusiasm when they are asked to lend S.I.S. representatives the cover of their name.’ Whatever cover was adopted, Bland was sure that the SIS representative should live up to it: ‘If he has business cover, he must genuinely do business. If he is the Assistant Commercial Secretary or is a member of a Consulate, he must perform a sufficient amount of commercial or consular work, not only to deceive the natives of the country but also to sustain his apparent rôle among his colleagues at the Mission.’ The committee also reiterated the practice that SIS representatives attached to British missions ‘should not work against the country in which they are stationed without the prior knowledge and consent of the Foreign Office’. In the past, they noted, this ‘used to be a firm rule’, but during the war there had ‘been a considerable relaxation of standards and in neutral countries the rule is probably now as much honoured in the breach as in the observance’.

One area where this rule could be modified was counter-espionage, which the committee thought in foreign countries ‘need seldom be in any way compromising’. SIS representatives in this field would ‘be openly known to the police and the deuxième bureau of the country concerned, and will in many cases be actively collaborating with them’. These representatives, moreover, could safely retain the title of Passport Control Officer which almost all SIS personnel abroad had used before the war. ‘This fact’, remarked the report, ‘became so widely known that little extra harm would have been done by affixing a brass plate “British Secret Service” to the door of their office.’ There was even some advantage to using the PCO designation since ‘if all C.’s counter-espionage representatives bear this title and none of his other representatives do, it should furthermore act as a red herring to draw away to the former, who do nothing compromising, the attention of foreign police authorities which should really be devoted to the latter. Indeed, it is arguable that the more that C.’s counter-espionage representatives are really thought to be gatherers of secret intelligence, the better.’ Commenting generally on the particular importance of counter-espionage in wartime, the committee noted that it was ‘a branch of activity which demands, when at its height, heavy expenditure on staff, card indices and other records’ and ‘it would be a great mistake if the main branch of the S.I.S. were to be handicapped after this war through the expenditure on counter-espionage work not being ruthlessly pruned when it is no longer of major importance’. There was, moreover, a potentially difficult political dimension with counter-espionage work, and in an early draft of the report Bland firmly recommended that SIS ‘should not direct its energy to investigating the activities of political organisations’, such as ‘Communists, Anarchists, &c . . . unless specially directed to do so, and then only for such time as may be considered absolutely necessary’.12 The committee also recognised that there was much ‘duplication and overlapping’ in this area between SIS and MI5, and it was ‘grossly wasteful to have two separate bodies covering so much of the same ground’. They therefore recommended that ‘at an early date’ there should be a separate inquiry into the division of responsibilities between the two agencies.

Counter-espionage was an area which the committee thought was ‘always likely to be a fruitful field for collaboration’ between SIS and secret services in other countries. During the war there had been very close contact between SIS and ‘the secret services of our Allies’, with the result that those services were ‘now all very familiar with the personnel and to some extent the methods of the British S.I.S. This may not matter to-day,’ reflected Bland; ‘but we do not consider that it is a state of affairs which should be allowed to prevail for a day longer than is necessary once the war is over.’ The committee did not support ceasing all collaboration with Allied secret services as after the war it could ‘yield good fruits’. They felt, moreover, that ‘token open collaboration with the secret services of other countries may serve to conceal the fact that our real energies have been diverted to other channels’. Collaboration (or ‘liaison’ as it came to be known) ‘should only occupy a small part of S.I.S.’s energies’, which should primarily be directed towards developing an entirely self-sufficient ‘postwar organisation whose methods and personnel and other secrets should be entirely unknown to any foreign secret service’. Reflecting, among other things, continuing assumptions about Britain’s future status as an autonomous Great Power, the committee affirmed that ‘it is upon itself, and upon no one else, that the S.I.S. should in the main rely’.

Bland also addressed the tricky topic of special operations. Noting that SOE’s ‘present activities’ were not within their terms of reference, the committee somewhat disingenuously reported that they ‘therefore thought it wiser not to ask any members of the Organisation to appear before us’. But having consulted quite a few other people, including departmental heads in the Foreign Office, as well as ‘certain Service representatives’, they observed that it was ‘impossible to conduct any enquiry into the S.I.S. without coming across numerous examples of the harmful impact upon it of the present existence of a second, independent secret organisation functioning in the same fields’. The report therefore decided it to be ‘inconceivable that there should exist in peace-time any secret organisation operating in foreign countries that is not responsible to the Foreign Secretary’; that SOE should be wound up as an independent organisation; and that such special operations functions as it was thought appropriate to retain should be managed by SIS.

This had been the Foreign Office view for some time. In December 1942 Cadogan had written to Charles Hambro at SOE, explaining that the Foreign Secretary had ‘firmly concluded’ that after the war there would not be room for two secret services, and that no clandestine organisation would be allowed to operate on the Continent except under Foreign Office control. At the time it is evident that SOE themselves did not necessarily accept this as a final decision, and they certainly envisaged a long-term postwar presence in former enemy-occupied countries (a role which they proposed to the Chiefs of Staff Committee in May 1945).13 But a different view was taken elsewhere. In April 1944 Bill Cavendish-Bentinck wrote that he could not ‘believe that anybody in their senses and outside S.O.E. seriously contemplates that organisation continuing after the war separate from the S.I.S. and not firmly under F.O. control’. In June, when Rex Leeper, British ambassador to the Greek government, raised with Peter Loxley the question of SOE having any potential postwar role in the Balkans (to which Leeper was vehemently opposed), Loxley told him about the Bland committee and added that it was considering ‘a variety of matters of mutual interest to the Foreign Office and my friends [SIS] in the postwar world’. ‘Between ourselves,’ he told Leeper, ‘we shall almost certainly recommend that, if and when any organisation for covert action is required, it should be made part of my friends’ organisation and should on no account be a separate body.’ Implying that this effectively was a Foreign Office stitch-up, Loxley asked Leeper to ‘keep all the foregoing to yourself, especially the part about the Bland Committee, as S.O.E. are not in on this at all’.14

Bland did not by any means dismiss the entire idea of special operations, merely noting the unlikelihood of there being much call for them after the war. In notably cautious and conditional terms the committee thought, however, that it would be a ‘mistake to abandon the principle that in almost any foreign country occasions may arise when it may be useful for His Majesty’s Government to resort to bribery, &c., for the furtherance of their foreign policy (this in contrast to the strict S.I.S. practice of only paying money for the collection of intelligence)’. The committee thought that SIS should establish a small department to preserve and develop expertise in this field (including ‘deception’) and prepare specifically for ‘secret action in time of war’. The Foreign Office view was that the Middle East was the only region where such action was likely to be necessary in the foreseeable future. Various British agencies had for years paid ‘subsidies’ to regional leaders, but the committee also thought that an independent organisation might be necessary to run ‘news agencies, broadcasting stations, &c., which, while appearing to be Arab controlled, are in fact vehicles for the dissemination of the British point of view’. Bland considered a further variety of special operations, including ‘the employment of private individuals to work on political parties, specialised groups, &c., in foreign countries with whom they might have some influence’. It was suggested that there might be elements – such as ‘opposition parties, minority groups, press, labour, business or ecclesiastical organisations’ – with which ‘Englishmen of standing in different walks of life’ might be able to form closer and better contacts than could British diplomats. While this kind of activity – ‘the exercise of persuasion and influence by private persons’ – might not necessarily be particularly compromising to the British government, the committee delicately noted that it might not ‘seem desirable that there should be too obvious a connection between the Foreign Office and private individuals’. Although not expressing ‘a view on the merits of the proposal’, the committee thought that it would ‘in practice prove desirable to entrust the task to C.’.

Consideration of special operations naturally brought the committee to the technical aspects of secret work. It was accepted that the large wireless communications section which had grown up during the war would be very substantially reduced. Menzies told the committee that he thought it ‘most unlikely that in peace-time’ it would be necessary to provide agents with their own wireless sets. Assuming that the Foreign Office would develop its own wireless communications, it was thought that SIS could use it, and, moreover, that the costs of developing and maintaining secure communications could be transferred from the Secret Vote to the Foreign Office budget. As well as specialised wireless equipment, Bland noted that in wartime, ‘and to some extent in peace time’, secret organisations also required ‘secret inks and similar processes, microfilms, forged documents, seals, &c.’, and ‘sabotage and counter-sabotage equipment, including certain types of arms’. Obviously research in these matters ‘should not be abandoned when the war is over’, both to maintain British expertise and to keep up with ‘scientific developments in other countries’. Bland’s view was that this work, though itself highly secret, did not need to be borne on the Secret Vote, and that a new research department should be established for this purpose, which would have an analogous position to that of the GC&CS. The Chief of SIS would be its Director-General, and, since its work would be of most interest to the armed services, they, or the Ministry of Defence, could meet its costs.

Bland’s recommendations regarding the financing of future research reflected the committee’s general opinion that all possible expenditure should be accounted for openly: ‘We reach this conclusion partly on principle and partly because we see practical objections to the Secret Vote being larger than necessity dictates.’ The committee argued that the larger the Secret Vote, ‘the greater the risk of parliamentary comment and criticism at home’. On the other hand, too much economy could be very risky and the committee expressed ‘the strongest hope that it will be remembered how starved of funds the S.I.S. was from soon after the end of the last war until the Secret Vote began markedly to increase once more in 1936, and what increasingly great dividends the S.I.S. has paid since it has had ample funds at its disposal’. Thus they also wanted ‘to sound an earnest note of warning against again allowing the Secret Vote to be reduced too far’. The committee assumed that the wartime figure for the Secret Vote would be published. This had risen from £179,000 in 1936 to £15 million in 1943 (of which SIS’s share had been £117,000 and £4,170,000), and they worried about the impact this might have on public opinion. ‘We are concerned’, they wrote, that ‘there may be an idea among the British public that something like a Gestapo has been operating in our midst during the past few years, and lest a reaction against the employment of secret means to obtain information about the views and activities of British subjects may lead to an ill-informed revulsion against the S.I.S.’ They suggested that this possibility could be countered by the Prime Minister, or a senior military figure such as Field Marshal Montgomery, making public statements which confirmed the high importance of the intelligence provided by the secret service.

The last subject covered by Bland was the Government Code and Cypher School. The committee noted that GC&CS had ‘performed its task brilliantly’ during the war, though this success had been largely unexpected. Reflecting views expressed even at the time of the Hankey inquiry in 1940, they remarked that during the last war it was ‘generally thought’ that ‘never again could cryptography pay such a dividend as it was paying then. One is almost forced to make the same observation again to-day, for it seems unthinkable that we shall ever be able to read more traffic than we can read now. But it is highly rash to prophesy,’ and they agreed ‘that no time, labour or money should be spared to permit the G.C. & C.S. to read everything that is readable’. Nevertheless, ‘the probability that cryptography is a wasting asset strongly reinforces the need for a first-rate S.I.S.’. As for the relationship between SIS and GC&CS, the committee decided that they ‘should emphatically not recommend removing the G.C. & C.S. from the supreme control of C. since we are strong believers in the unified direction of all secret intelligence work directed against foreign countries’. But the committee, evidently aware of the danger of depending too readily on signals intelligence, were opposed to any complete integration of SIS with GC&CS ‘since it could only result in the long run in making the personnel of the S.I.S. feel they could rely on the fruits of cryptography, instead of having to bestir themselves to obtain intelligence through agents’.

Peter Loxley sent a draft copy of the report to Menzies, who said that he was ‘in general agreement with the main recommendations’. It was clear (and no doubt comforting to Menzies) that the committee counted ‘on the organisation of an S.I.S. of far greater efficiency in the Peace era than it was possible to create before the War’. Finance was obviously fundamental, and, allowing for as much spending as possible being provided on Open Votes, Menzies hazarded that ‘an effective Foreign S.I.S. should be maintained for under 1 million per annum’. He disagreed with the proposal to appoint ‘senior service advisers’, who, he reckoned, would lack ‘sufficient practical experience of S.I.S. work to enable them to accept extensive executive responsibility’. Liaison with the service ministries was much better secured by the Service Circulating officers – ‘in constant liaison with the individual sections of the Service Department concerned’ - assisted by able junior active service officers, seconded to SIS for two or, preferably, three years. Menzies noted the long-term nature of counter-espionage and asserted that funds should be provided for it. He agreed that ‘the C.E. budget must be reduced very materially below its wartime level’, but warned against doing this too drastically. With an apt allusion, he observed that ‘a counter-espionage service cannot be built up between a Munich and a declaration of war’.

Menzies agreed that there should be a separate inquiry into MI5. The present position was ‘not satisfactory’ and steps should be taken to eliminate ‘the present duplication of records and of research even though complete amalgamation of effort may prove to be neither practicable nor desirable’. Menzies, indeed, was fiercely anxious to maintain SIS’s monopoly of foreign intelligence-gathering and he strongly deprecated as ‘highly detrimental’ any proposal ‘which permitted M.I.5 to run a foreign Intelligence Service in any country parallel to, or in competition with, S.I.S.’. As for SIS’s relationship with GC&CS, Menzies said he was not yet in a position to offer firm advice, as this would have to await the conclusion of ‘a far reaching investigation’ which he had ordered about the future of signals intelligence work.15

One part of the report which particularly exercised Menzies was the specific injunction that SIS’s counter-espionage section ‘should not direct its energy to investigating the activities of political organisations, e.g. Communists, Anarchists, &c.’. This, he argued, ran ‘directly counter’ to what he had ‘thought to be the Foreign Office wishes in this matter’. He noted that the ‘Foreign Office desiderata in regard to Europe’ (provided in an appendix to the report) included as the first priority to watch for any revived ‘attempts by Germany to spread her influence in other countries’, and second ‘to observe Russian activities . . . and the activities of national parties or groups in different countries who look to Moscow for leadership or support’. Menzies added that in October 1943 SIS had been ‘expressly encouraged to build up an organisation’ to deal with ‘this type of work’ (hence the creation of Section IX). ‘In general,’ Loxley himself had written, ‘we can count on the N.K.V.D. and other Soviet organisations pursuing covert aims and activities in contradiction to the overt policy of the Soviet Government, but with the latter’s blessing.’ These activities, he added with a nice touch of ironic understatement, ‘are not likely to be for our benefit’. It was ‘only common prudence to learn as much as is possible about these aims and activities’, and it should be possible to do so without running any ‘undue risk – provided that you do this through foreign Communist parties outside the U.S.S.R.’. With an observation which was sadly much truer than even he might have suspected, Loxley concluded: ‘The Russians would surely think that we were fools not to do so when it is absolutely certain that they have a wide network of agents here.’16

Menzies felt that a blanket prohibition on dealing with ‘these semi-political matters’ would impose on him an ‘impossible’ and ‘unwarrantable handicap’. ‘In its more detailed aspects,’ he argued, ‘the study of Communism abroad is irremediably linked with counter-espionage Intelligence.’ He had, moreover, appointed a senior officer to co-ordinate all aspects of this work and proposed ‘to establish a separate section charged to deal with this particular subject’. Menzies wanted the restriction deleted from the report. He convinced Nevile Bland, who thought he had made an ‘irrefutable case’.17 Loxley was less impressed, and thought that Menzies’s comments were ‘the pure milk of the doctrine of Colonel Vivian’ (not inaccurately casting the veteran head of Section V as an inveterate anti-Communist). Forwarding Menzies’s paper to Cadogan, Loxley observed that while the Foreign Office certainly wanted SIS to watch ‘Russian activities’, which might, for example, include studying ‘the Communist Party in e.g. Greece’, he thought it wrong ‘that S.I.S. should go witch-hunting and study Communists for their own sake. The Communist Party’, he continued, ‘is a legal party in this country and it would be a great mistake if the S.I.S. ever came to be regarded as an instrument of the Right Wing.’ Loxley was ‘frankly scared of the “Indian policeman” outlook in connexion with counter-espionage’. Loxley also thought Menzies was wrong to resist the appointment of senior service officers to SIS. ‘The Service Departments’, he wrote, ‘will always make trouble if they aren’t allowed a nominee of their own at Broadway.’18

After further consultations with the Bland committee members and Cadogan, Menzies formally proposed some revisions for the report before a final version was circulated. Regarding SIS relations with the service ministries, it was conceded that ‘Senior Service Representative’ would replace ‘Senior Service Adviser’, but the only substantial amendment concerned potential counter-espionage activities. Evidently responding to Loxley’s worries about the potential political leanings of the Service, Menzies asked that the non-political nature of SIS activities should be firmly embedded in the text. Following a statement that SIS ‘may from time to time be required to investigate the activities of foreign political groups or parties, e.g. Nazis, Communists, Anarchists, etc’, he requested Loxley to include the following significant admonition, which covered Service activities generally as well as his own specific responsibilities as Chief:

We think it important that those concerned in the S.I.S. should always bear in mind that they are not called upon to investigate such organisations because of their political ideology; and that they should therefore only engage in such investigations when there is prima facie evidence that the organisation in question may be used as instruments of espionage, or otherwise when specifically requested to do . . . We consider it to be of great importance that the S.I.S. should avoid incurring any suspicion that it is the instrument of any particular political creed in this country, and we believe therefore that C would always be well advised to seek guidance from the Foreign Office as to what political parties in foreign countries need special watching, and for how long.19

Loxley accepted this, and Menzies’s statement, almost exactly as drafted, was included in the final version of the report.20 There was, of course, an advantage to having such a resounding and perhaps emblematic declaration of political disinterest placed on the record. And by following the correct constitutional line that the Foreign Office directed the work of the Service, it could usefully release SIS from having repeatedly to rehearse the impartiality argument every time a party political organisation was targeted for investigation.

The final version of the Bland Report was printed, and circulated to a very limited number of people, in December 1944. The service ministries were not slow in responding. Indeed, the Chiefs of Staff had evidently already got wind of the proposal to wind up SOE and maintain only a small special operations section within SIS after the war. Towards the end of November, clearly hoping that this was not a fait accompli, they expressed reservations about it to the Prime Minister. Edward Beddington (the Army Deputy Director) and Lionel Payne (Air), whose opinions had been canvassed by Peter Loxley during the writing of the report, both broadly concurred in its conclusions and strongly supported the importance of having senior service representation at the existing Deputy Director level in SIS. The service Directors of Intelligence were less unanimously accommodating about the report, however. While the Director of Military Intelligence (DMI), John ‘Sinbad’ Sinclair, thought that ‘the question of senior Service representation to the SIS’ was ‘of utmost importance’, filling the post was a difficult exercise. The army, he maintained, would be most unlikely ‘to appoint a first-class officer . . . to an appointment which is so completely out of the normal run of Army work. Still less are they likely to do so if the appointment is in no way executive.’ One possibility was that the post be abolished and the responsibilities taken on by the DMI or his deputy. The Director of Naval Intelligence (DNI), Edmund Rushbrooke, was more blunt. The appointment of naval representatives had ‘been tried and failed dismally’. Officers selected ‘either had nothing to do, having no executive authority, or else were absorbed into the S.I.S. organisation and ceased to be Service representatives’. Rushbrooke argued that the service Directors of Intelligence could quite well ‘protect S.I.S. from unreasonable requests’, and he suggested that ‘C’ himself could appoint three senior SIS officers, who had been members of the fighting services, to administer the work of their respective arms.21

There was disagreement among the services about the future of SOE. While for the navy Rushbrooke strongly concurred ‘that S.I.S. should absorb S.O.E. after the war and that a separate S.O.E. should never be revived’, Sinclair, reflecting the army’s more particular interest in SOE’s expertise, wanted the matter put before another committee ‘to consider the control of all secret organisations’. Sinclair’s views generally about the future organisation of SIS are of particular interest, as in September 1945 he transferred into the Service as Vice Chief and succeeded Menzies as Chief in 1952. Again clearly at this stage reflecting the War Office view, Sinclair asserted that it was ‘completely unacceptable that cover for SIS representatives should be provided by appointment as Assistant Military Attache’, and he suggested that the Ministry of Defence (rather than the Foreign Office) should assume overall responsibility for the Service. Sinclair was agnostic about the future relationship between SIS and the Code and Cypher School. He conceded that ‘it may be desirable that both organizations should be under the same Chief ’, and allowed that this was ‘essential while the present “C” continues in office’. Sinclair also commented on the question of recruitment (which was to be a major concern of his after he joined SIS). ‘The Committee’, he wrote, had ‘not mentioned that the war expansion of SIS took place at a very late date. In consequence many desirable recruits were already employed by the Forces, SOE, MEW, etc.’ He therefore recommended that ‘one senior member of SIS’ should be specially responsible for this matter, and ‘maintain and revise annually lists of suitable recruits’.22

One aspect on which the service Directors agreed was the future importance of scientific and technical intelligence. Edmund Rushbrooke observed that weapons of war were becoming more complex, ‘e.g. Radar, Rockets, Jet propulsion, Atomic energy, etc’. SIS officers in the field, therefore, would have to be well briefed about the latest developments. Rushbrooke proposed that ‘a small number of specially selected, skilled scientists and technicians should join S.I.S. in order to act as technical advisers’. These individuals, moreover, ‘should be of sufficient scientific status to enable them to gain an entree when necessary to foreign academic and university scientific circles’. It was in ‘such a milieu’, he argued, ‘that early information of interesting developments may be obtained’.23

While the Bland Report was being considered, the Joint Intelligence Sub-Committee commissioned Cavendish-Bentinck and Denis Capel-Dunn, the JIC secretary, to prepare a study on ‘The Intelligence Machine’. Like Bland, Cavendish-Bentinck and Capel-Dunn stressed the need for the ‘strongest possible Secret Service in peace’, but they also argued that only one agency should be responsible for counter-espionage, and that, since scientific and technical intelligence was likely to be of the highest priority, SIS should concentrate on this specific target. This clearly reflected the armed service departments’ intelligence priorities, as did their proposal that the whole intelligence machine should be co-ordinated by the JIC, under the general direction of the Chiefs of Staff. They further suggested that there should be a Central Intelligence Bureau, headed by the Chief of SIS, which would gather and collate material from all existing intelligence sources.24 Menzies, however, objected to this. He felt that the JIC should remain a non-executive and co-ordinating body, overseeing the whole machinery of intelligence. ‘It was’, he claimed, ‘quite impracticable for a consultative committee of this kind to wield any executive authority over organisations that had executive functions.’ As the head of an intelligence-gathering agency, he also thought it wrong that he should head the proposed Central Intelligence Bureau, a consumer organisation. In fact, something of the Bureau concept was established when, without involving SIS or Menzies, in August 1945 the Chiefs of Staff set up a Joint Intelligence Bureau to take over (primarily from the Ministry of Economic Warfare) the collection and study of information on transportation, defences, airfields and various economic subjects.

Although Cavendish-Bentinck was associated with both the Bland Report and the JIC study, the two papers broadly embodied different conceptions of how SIS, in both organisation and function, might fit into the wider government framework. The JIC paper reflected the operational, technical and scientific priorities of the armed services, which, moreover, dominated intelligence requirements in wartime. By contrast, the Bland conclusions embodied the longer-term, more political needs of the Foreign Office, which tended to be more apparent in peacetime. At the command level throughout the war (as had been the case in 1914-18), SIS was under continual pressure to integrate its organisation and activities into the military machine. For the most part, arguing both security considerations and a sustained obligation to gather political as well as military intelligence, the Service resisted these attempts to erode its autonomy, although in some places (notably South-East Asia Command) it was unable fully so to do. What the Cavendish-Bentinck and Capel-Dunn paper represented was an attempt at the highest level, once victory was in sight, to ensure that the peacetime organisation of ‘the intelligence machine’ largely matched the wartime needs of the service departments and their particular perceptions of what intelligence was about. Why this attempt failed was in part down to superior Whitehall footwork by the Foreign Office as opposed to the service ministries; but it also reflected the anticipated peacetime intelligence requirements. It may also indicate a more profound British uneasiness with military and potentially militarised organisations which the Bland committee hinted at in the concern their report expressed about public suspicions that ‘something like a Gestapo’ might have been operating in Britain. For British decision-makers, and perhaps also for the British people, part of the price of winning the war was the ostentatious rejection of those very military values and strengths which had largely made victory possible. In institutional terms, SIS, even though it embodied many military qualities and to a very great extent served the needs of the armed forces, was much more likely to survive and flourish in the postwar world as an explicitly civilian organisation under the accommodating supervision of the Foreign Office.

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