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

‘Both path-breaking and a very good read. Calder Walton reveals for the first time the full role of British Intelligence in the end of the largest empire in world history’

PROFESSOR CHRISTOPHER ANDREW, author of Defence of the Realm: The Authorised History of MI5

‘People who believe there’s not much left to learn about the British Empire should read this book. Calder Walton has sculpted a fascinating study of where spycraft touched palm and pine’

PROFESSOR PETER HENNESSY, author of The Secret State

‘Comprehensive and perceptive … It is one of those books that no student of the subject can ignore’

Spectator

‘Empire of Secrets is an important addition to the literature on decolonisation. It shines new light into the murky world of intelligence that underpinned the formalities of departure, the anthems and flag-lowering ceremonies, the wheeling parades and high-flown sentiments of nationalism’

Financial Times

‘An entertaining and welcome demystification of the intelligence services and their role in the demise of Britain’s empire’

Sunday Times

‘There is enough human anecdote and eccentricity in Empire of Secrets’ “high-octane” narrative to please even the most satiated consumer of such subjects … a story that often left me wondering what on earth we pay these people for’

Literary Review

‘With fluency and judiciousness, he tells how Britain’s secret services responded to, then helped engineer and fine-tune, and later hushed up one of the most important historical events of the last century … The history of Britain’s decolonisation will now begin to be rewritten. Walton’s first draft is acute, well-researched and agreeably lively’

Sunday Telegraph

‘For those interested in the Cold War, intelligence history, and British decolonization, [Empire of Secrets] proves indispensable’

New York Journal of Books

‘Fascinating … moves the spooks from the periphery of history to its heart … A well-documented, courageous and incisive first book by an author who has inhabited the real world of intelligence rather than a James Bond fantasy … required reading’

The Tablet

TO JENNIFER

We are quite impartial; we keep an eye on all people.

HERBERT MORRISON, Home Secretary (February 1941)

Contents

Cover

Title Page

Praise for Empire of Secrets

Dedication

Epigraph

List of Illustrations

Abbreviations and Glossary

Map: Principal MI5 posts in the empire and Commonwealth in the early Cold War

Introduction

1. Victoria’s Secrets: British Intelligence and Empire Before the Second World War

2. Strategic Deception: British Intelligence, Special Operations and Empire in the Second World War

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

4. The Empire Strikes Back: The British Secret State and Imperial Security in the Early Cold War

5. Jungle Warfare: British Intelligence and the Malayan Emergency

6. British Intelligence and the Setting Sun on Britain’s African Empire

7. British Intelligence, Covert Action and Counter-Insurgency in the Middle East

Conclusion – British Intelligence: The Last Penumbra of Empire

Picture Section

Note on Sources and Methodology

Notes

Bibliography

Index

Acknowledgements

About the Author

Copyright

About the Publisher

Illustrations

1. Sir Vernon Kell, the founding father of MI5. (Getty Images)

2. The original ‘C’, Sir Mansfield Cumming. (Imperial War Museum)

3. T.E. Lawrence. (Imperial War Museum)

4. RFC plane with aerial reconnaissance camera, 1916. (Imperial War Museum)

5. The ‘Colossus’ at Bletchley Park. (Topfoto)

6. Jasper Maskelyne. (Mary Evans Picture Library)

7. Dummy tank, Middle East, 1941–42. (The National Archives, ref. W0201–2022)

8. Dummy Spitfire. (The National Archives, ref. AIR20/4349)

9. Dudley Clarke. (Courtesy of Churchill Archives Centre)

10. László Almásy. (akg-images/Ullstein Bild)

11. Long Range Desert Group, North Africa. (Getty Images)

12. Sir Percy Sillitoe. (Popperfoto/Getty Images)

13. Police use tear gas during a riot in Calcutta, 1947. (Getty Images)

14. The bombing of the King David Hotel, Jerusalem, 22 July 1946. (Getty Images)

15. Menachem Begin wanted poster. (Getty Images)

16. Sir John Shaw. (The Bodleian Libraries, the University of Oxford)

17. MI5 report on Jewish terrorism in the Middle East. (The National Archives, ref. CO 733/457/14)

18. British soldiers question a group of schoolboys in Jerusalem, 1947. (Getty Images)

19. Major Roy Farran at his brother’s grave, 1948. (PA/PA Archive/Press Association Images)

20. British paratrooper in the Malayan jungle, 1952. (Getty Images)

21. Ghana’s independence ceremony, 1957. (Time & Life Pictures/Getty Images)

22. Jomo Kenyatta. (Popperfoto/Getty Images)

23. Suspected Mau Mau victim. (Getty Images)

24. Mau Mau prisoners in Kenya. (Gamma-Keystone via Getty Images)

25. The arrival of the Empire Windrush at Tilbury, 22 June 1948. (Topfoto)

26. The Petrov affair, 1954. (National Archives of Australia)

27. British paratroopers embarking for Suez, 1956. (Popperfoto/Getty Images)

28. Cheddi Jagan with ousted ministers, British Guiana, 1953. (Bettmann/Corbis)

29. Archbishop Makarios visiting a British Army camp in Cyprus, 1960. (Topfoto)

30. British soldiers in Cyprus, c.1956. (Getty Images)

31. British soldier threatening Arab demonstrators, Aden, 1967. (Getty Images)

32. Chris Patten, Hong Kong, July 1997. (Eric Draper/AP/Press Association Images)

33. The US base on Diego Garcia. (Corbis)

Abbreviations and Glossary

Abwehr – German espionage service

ASIO Australian Security Intelligence Organisation – Australian domestic intelligence service

ASIS Australian Secret Intelligence Service – Australian foreign intelligence service

CIA Central Intelligence Agency – American foreign-intelligence-gathering agency

CID Criminal Investigation Department – Department of regular police force

CPGB Communist Party of Great Britain

DIB Delhi Intelligence Bureau – Pre-independence Indian intelligence agency

DSO Defence Security Officer – MI5 liaison officer in a colonial or Commonwealth country

FBI Federal Bureau of Investigation – US law-enforcement agency

GC&CS Government Code & Cypher School – Pre-war and wartime British SIGINT service

GCHQ Government Communications Headquarters – Renamed post-war British SIGINT service

HOW Home Office Warrant – MI5’s mechanism for mail and telephone interception

HUMINT Human intelligence

IB Intelligence Bureau – Indian intelligence service, another name for DIB

IPI Indian Political Intelligence – Pre-independence agency in London responsible for intelligence on Indian affairs

JIC Joint Intelligence Committee – ‘High table’ of British intelligence community

KGB Committee for State Security – Soviet foreign intelligence-gathering agency

LIC Local Intelligence Committee – Regional colonial intelligence set up in colonies on MI5’s advice in early Cold War

MI5 – British intelligence service responsible for counter-espionage, counter-subversion and counter-sabotage in British territory

MI6 – Secret intelligence service responsible for gathering HUMINT from non-British territories

NSA National Security Agency – US SIGINT agency

RCMP Royal Canadian Mounted Police – Canadian law-enforcement agency

SAS Special Air Service – British special forces

Security Service – MI5

SIFE Security Intelligence Far East – MI5 inter-service intelligence outfit in the Far East

SIGINT Signals intelligence

SIME Security Intelligence Middle East – MI5 inter-service intelligence outfit in the Middle East

SIS Secret Intelligence Service – British foreign-intelligence-gathering service

SLO Security Liaison Officer – MI5 liaison officer in a colonial or Commonwealth country

Introduction

In times of travail, Britain’s tendency was to rely more, not less, on spies. Her entire empire history urged her to do so. The thinner her trade routes, the more elaborate her clandestine efforts to protect them. The more feeble her colonial grip, the more desperate her subversion of those who sought to loosen it.

JOHN LE CARRÉ, The Honourable Schoolboy1

On a cold morning in April 1947, a female terrorist slipped into the main headquarters of the Colonial Office in London. After politely asking a security guard if she could shelter from the chill indoors, she placed an enormous bomb, consisting of twenty-four sticks of dynamite, wrapped in newspaper, in the downstairs toilet, then calmly walked back out into the busy street and disappeared into the crowd. Her identity was not known at the time to either the police or MI5, but she worked for a terrorist ‘cell’ in Britain belonging to the Stern Gang, one of the two main paramilitary organisations fighting the British in Palestine. The explosives used for the bomb had been given to her by another Stern Gang agent, a wounded Franco-Jewish war veteran, known as the ‘dynamite man’, who had avoided detection by smuggling the dynamite into Britain in his artificial leg. The aim of these agents, and of other Stern Gang cells operating in Britain, was to use violence to force the British government into establishing an independent Jewish state in Palestine.

Even before this incident, MI5 had already been placed on high alert for possible terrorist outrages to be conducted in Britain. In the light of increasingly alarming reports from its sources in the Middle East, warning that Jewish paramilitaries planned to extend their ‘war’ against the British from Palestine to Britain itself, MI5 mounted intensive surveillance operations on known radical Jewish and Zionist groups in Britain. MI5’s investigations revealed a number of terrorist cells operating in London, whose members were planning bombing campaigns and assassinations of leading British politicians. In 1946 the head of MI5 briefed the Prime Minister that he and cabinet ministers were targets. That same year, another terrorist cell launched a letter-bomb campaign directed at every member of the British cabinet. All of the bombs, found to be potentially lethal, were successfully intercepted.

The bomb left in the Colonial Office was only detected after, by sheer luck, it had failed to go off because its timer broke. If it had successfully detonated, it would have caused carnage and chaos at the centre of Whitehall, probably on a similar scale to an attack that the other main militant group fighting the British in Palestine, the Irgun, had carried out in Jerusalem in July 1946, blowing up the King David Hotel and killing ninety-one people.

When the bomb at the Colonial Office was discovered, it led to an immediate Europe-wide search for the female Stern Gang agent, headed by MI5, SIS (MI6) and the London Special Branch. She was eventually apprehended in Belgium. MI5 also identified Irgun members operating in Britain, who were kept under surveillance or arrested. The head of the Irgun, however, remained at large, and continued to plan attacks against the British, in both Palestine and Europe. His name was Menachem Begin. He went on to become the sixth Prime Minister of the state of Israel, and the joint winner of the Nobel Peace Prize. 2

This episode is just one among a vast number of remarkable, and mostly undisclosed, security operations that Britain’s intelligence services were involved in during the period immediately after the Second World War, when Britain began to lose its empire. It has only recently been revealed through declassified intelligence records, and it not only adds a new chapter to the history of the early Cold War, but also has a chilling contemporary resonance. In a striking parallel with the world today, it reveals that the infiltration and radicalisation of a terrorist minority from the Middle East was experienced in Britain more than half a century ago. In fact, as this book reveals, in the aftermath of the Second World War the main threat to British national security did not come from the Soviet Union, as we might expect, but from Middle Eastern terrorism. However, the terrorists then did not come from Palestinian and Islamist groups, as they would do in the late twentieth century, and do today, but from Jewish (or ‘Zionist’) extremists. As Niall Ferguson has argued, terrorism is the original sin of the Middle East.3

This book tells the secret, largely untold, history of Britain’s end of empire – the largest empire in world history – and is the first study devoted to examining the involvement of British intelligence in that story. Like Britain’s secret services themselves, it offers a global perspective: the agency responsible for imperial security intelligence, MI5, was involved everywhere in the empire where British national security was threatened – which in the early Cold War included almost all of Britain’s territorial holdings. It provides a panoramic tour of Britain’s declining empire after 1945, and the clandestine activities of the British government as this occurred. Its subject matter ranges from wartime espionage campaigns waged in the deserts of North Africa to shady back-channel communications with African dictators; from violent counter-insurgencies (or ‘Emergencies’) in the jungles of Malaya and Kenya, and the hills of Cyprus, to urban warfare campaigns in Palestine and the Arabian Peninsula. It reveals CIA plots and covert activities in British colonies, KGB assassinations, and failed coups sponsored by the British and US governments in the Middle East, primarily intended to secure oil and other natural resources.

Intelligence is the ‘missing dimension’ of the history of Britain’s end of empire (or ‘decolonisation’, as it is known to historians), which took place largely in the two decades after 1945. The activities of Britain’s intelligence services are conspicuously missing from almost all histories of that period. Part of the reason for this is perfectly understandable. During Britain’s rapid retreat from empire, the British government unofficially acknowledged the existence of MI5, but did not officially recognise that of SIS or GCHQ. This meant that there were no officially-released intelligence records for historians to study – it was obviously impossible for government departments to release records if the departments themselves did not officially exist. Intelligence was, therefore, quietly and subtly airbrushed out of the history books.4

But while historians in the past were crippled by a lack of official records relating to British intelligence and the end of empire, the same is not true today. Britain’s intelligence services have at last come in from the cold. In the late 1980s, the British government finally gave up its practice of denying the existence of its intelligence services, and placed them, for the first time, on a statutory basis – MI5 in 1989, and SIS and GCHQ in 1994. One of the consequences of this was that the intelligence services have, in recent years, at last removed themselves from the historical never-never land they previously occupied, and begun to acknowledge that they do actually have a past. In 1992 Whitehall departments began the so-called Waldegrave Initiative on Open Government, which for the first time brought independent historians into the review and declassification process of government records, including intelligence records. Since then, Britain’s intelligence services have begun to declassify records in earnest. This has meant that this book, and others like it, can finally place Britain’s secret departments in the historical position they deserve. In fact, the result of the government’s declassification process is that there are now almost too many intelligence records relating to the British empire to study.5

Despite the unprecedented volume of records that have been crashing into archives in recent years, the overwhelming majority of historians of Britain’s end of empire have continued to ignore the role of Britain’s intelligence services. Even the best, and most recently published, histories of the period have a yawning gap when it comes to the role of the intelligence services. In the few books that do mention them, they usually appear as little more than an afterthought, in the footnotes of history. This omission is even more bizarre considering that almost every history of the Second World War now mentions the successes of Allied code-breakers at Bletchley Park in cracking the German Enigma code, known to the British as the ‘Ultra’ secret. However, hardly any currently available history of Britain’s end of empire (or for that matter of British activities in the Cold War) mentions Bletchley Park’s post-war successor, GCHQ. Judging from these books, we are supposed to believe that British code-breakers abruptly stopped operating in 1945. Unsurprisingly, this was not the case. Far from being a mere footnote to post-war history, in reality Britain’s intelligence services were as active in the years after 1945 as they were during wartime. In fact, since the early twentieth century they had been actively working behind the scenes, removed from public gaze, just as they continue to be today in many of the countries that formerly comprised the British empire. With this in mind, the basic proposition of this book can be summarised concisely: it argues that the current state of the history of Britain’s end of empire is in the same position that the history of the Second World War was in before the disclosure of the Ultra secret. By ignoring the role of intelligence, our understanding of the demise of the British empire is at best incomplete, and at worst fundamentally flawed.6

It is impossible to understand how and why British intelligence was involved in Britain’s often violent retreat from empire after 1945 without first understanding the root causes of why Britain relinquished that empire. Readers should be warned that this is an enormous subject, with as many different interpretations as there are historians. Pinpointing an exact moment for the beginning of the end of the British empire is an archetypal brain-teaser, which historians are unable to agree on – some have argued that it began in the early twentieth century with the Second Boer War in South Africa, between 1899 and 1902, when it took Britain much longer than predicted, and 45,000 troops, to defeat rebellious farmers in the colony. Others date it to the Second World War, particularly with the Atlantic Charter in August 1941 and then the Lend Lease programme, by which the United States provided Britain with urgently needed war supplies, both of which meant that Washington could largely dictate the future of Britain and its empire after the war. Others believe the decisive moment was the advent of the new Labour government in 1945, committed to the reform of local government in British colonies. Still others believe that it occurred much later, with the disastrous Suez crisis in 1956. The reality is that it is probably impossible to pin down a single event that conclusively represents the end of Britain’s imperial power, though if I were forced to choose one, it would perhaps be the Suez crisis, which, for reasons we shall see in this book, represented a humiliating failure for Britain and revealed that it was no longer a major world power.7

Nevertheless, out of all the ink devoted over the years to understanding why Britain ‘scuttled’ its empire in the post-war years, it is possible to divide the explanations given by historians into four distinct categories. One is that given by nationalist historians, who argue (unsurprisingly) that anti-colonial ‘freedom fighters’ were responsible for forcibly ejecting the British from their colonies. A second explanation is economic necessity: Britain emerged from the Second World War essentially as a bankrupt state, facing a credit crunch of epic proportions, and was forced to slash its defence budget in the two decades after 1945, at precisely the time that its military commitments in its colonies abroad increased. As the historian Paul Kennedy has put it, Britain was overstretched in its imperial commitments in 1945, and was forced to relinquish control of its colonies because it could not afford to keep them on. A third interpretation is a failure of will: Britain won the war in 1945, but then proceeded to lose the peace, no longer desiring to maintain a colonial empire. A fourth interpretation is that of external pressures: after 1945, the British government was attacked on the international stage for its colonial empire, a repugnant anachronism in the post-war world, which was widely criticised by the United States and the Soviet Union alike.8

It is tempting to suppose that there was a linear decline in Britain’s status in the post-war years, from a leading world power to a second-rate nation, but this was not the case. Even labelling British decolonisation a ‘process’ is misleading, because it implies that it was a planned programme. However, it only seems like a process when viewed in retrospect. The liquidation of the empire was never written down as a deliberate policy, by the Colonial Office or any other government department. It would be reading history backwards to suppose that Britain somehow marched triumphantly towards an enlightened, post-colonial future in the years after 1945. The fact is that few, if any, official British records dealing with anti-colonial movements in the late 1940s and early 1950s actually discuss ‘independence’. Instead, they refer to ‘self-government’, which meant that colonies would begin to take control of their own affairs, but with Britain usually retaining control over their security, defence and foreign affairs.