MI5 calls on Chancellor for more cash to fund fight against terror

Published on Monday 21 November 2005 00:52

MI5 chiefs have made an urgent request to Gordon Brown for more money to support the "frightening" number of counter-terrorism operations they are mounting around Britain.

The appeal for funds, which will be decided by the Chancellor within weeks, comes amid growing fears that the security service is overstretched in the wake of the July attacks on London.

While Treasury sources described the request as "quite exceptional," Whitehall insiders are confident Mr Brown will grant it.

The Chancellor will present his pre-budget report to MPs on 5 December, and has previously used such statements to increase counter-terrorism spending.

Last year, Mr Brown increased total counter-terrorism spending by 145 million, some of it going to MI5.

Overall spending on domestic security will rise from 1.5 billion in 2004-5 to 2.1 billion by 2007-8, the Chancellor told MPs last December. The security budget has more than doubled since 11 September, 2001.

As part of that process, MI5 has seen a massive increase in its budget, which is an official secret but is believed to be rising towards 300 million.

But the earlier increases are mainly earmarked for "capital expenditure", which will see the service expand from 2,000 to 3,000 staff and open eight branch offices around the UK.

In recent weeks Dame Eliza Manningham-Buller, the director-general of the security service, is understood to have argued she needs more money for counter-terrorism "current expenditure" from the start of the next financial year.

Under Treasury rules, Whitehall spending allocations are set for three-year periods. Within those periods, departments and agencies can make urgent "reserve claims" on central funds for extra cash.

In recent years, reserve claims have been granted to departments struggling with sudden crises such as the 2001 foot-and-mouth outbreak.

Dame Eliza meets Mr Brown regularly when she briefs senior cabinet ministers on security issues. Both are robust characters but are said to have developed a mutual respect.

In the course of those meetings, Mr Brown has been informed about the security service's current work, which one source said involves a "frightening" number of surveillance operations.

"They were extremely busy before July, and the requirements since then have only grown," said the source. "The investigation into 7/7 continues, and there are a lot completely separate operations into other potential threats too."

One consequence of the huge focus on counter-terrorism is that MI5's other "business areas" have been deprived of resources.

The agency is also responsible for stopping foreign governments spying on British interests, and supporting police operations against organised crime.

In recent weeks, industry groups have warned of an increasing threat of economic espionage from foreign powers, particularly China.

That concern follows MI5's counter-espionage division being stripped of resources in order to support counter-terrorism work.

Parliament's intelligence and security committee has recently taken evidence from MI5 officers including Dame Eliza.

The committee has previously said that counter-espionage work is being neglected, and is now expected to use its annual report in January to warn that the risk of British secrets falling into foreign hands has increased.

The Treasury last night declined to comment about spending plans before the pre-budget report.