Parliament: Intelligence: Committee breaks silence on cost of keeping spies

BRITAIN'S SECRET and intelligence services were castigated by an all-party group of MPs last night for allowing huge cost overruns on their luxury headquarters in London.

The rising cost of housing Britain's UK-based spies, MI5, so alarmed Baroness Thatcher when she was prime minister that she forced the security service to cut the cost of its headquarters by pounds 70m. The details of the overspending by Britain's spy masters were disclosed to Robert Sheldon, the former Labour chairman of the Public Accounts Committee but were covered- up on the grounds of national security.

They were brought to light yesterday when the special committee giving oversight to MI5 and MI6 decided to publish the figures for the first time. The cost of refurbishing Thames House, the MI5 headquarters, for the security service rose more than three times from an estimated pounds 60m to a final figure pounds 227m, which would have been more had Lady Thatcher not intervened.

A similar story of spiralling costs arose over fitting out the MI6 headquarters, Vauxhall Cross, which rose from pounds 22 m to pounds 81m. The committee, chaired by Tom King, a former member of Lady Thatcher's cabinet, said there had been no justification for keeping the figures secret and in future they should be published.

The MPs warned that similar cost overruns would not be tolerated for the new listening post, the GCHQ headquarters. David Davis, the Tory chairman of the Public Accounts Committee, said he strongly supported putting the costs into the public domain. He said it was necessary to keep some things secret in the democratic oversight of the secret and intelligence services but it "should be confined to issues which are genuinely secret in nature".

The committee also urged the Government to give MI5 and MI6 more money for combatting tobacco smuggling after receiving evidence that the agencies were unable to allocate resources of "any significance" to combat the illegal trade. The Treasury reckons it loses pounds 1,500m a year from duty and tax avoidance on cigarettes. "We believe that any additional resources given to the agencies to allow them to conduct work in this area could be self-funding for the Exchequer through the recovery of duty and tax," said the MPs.

They were told that Colombians supply the majority of cocaine in the UK and that Turkish groups supply 90 per cent of the heroin. `The committee believes that more could be done by the agencies to prevent the drugs reaching the UK," they added.

The threat posed by international terrorism, includingdrug smuggling, and the proliferation of nuclear or chemical weapons was growing. The Secret Intelligence Service, MI6, had devoted much of its effort to stop weapons of mass destruction spreading from the former Soviet Union and Saddam Hussein's Iraqi forces.