Starmer, spies and China’s threat to national security

0:00How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

0:30Richard Dearlove:Coming up, the former head of MI6 tells me the UK isn't taking the threat from China seriously enough after the collapse of the prosecution of two men accused of spying for them. So what's going on? How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

1:14Richard Dearlove:It's all a bit murky. Two men accused of spying for China were due to face trial. They'd always maintained their innocence and denied all charges against them. But ultimately, the case collapsed after the government refused to label China a threat to our national security. The rationale? Well, here's Sir Keir Starmer. The trial would have had to take place on the basis of the situation as it was at the time under the previous Tory government. So whatever their position was, was the only position that could be presented at trial. So it wasn't as well this government's position, it was the Tory government before's position.

1:50Now that's not a political to and fro, that's a matter of law. You have to prosecute people on the basis of the circumstances at the time of the alleged offence. And so all the focus needs to be on the policy of the Tory government in place then.

2:03Richard Dearlove:Funnily enough, the Conservatives see things rather differently. Alicia Cairns was once chair of the Foreign Affairs Select Committee. She's now Shadow Minister for Home Affairs. So the government needs to answer who spiked the prosecution because the CPS is independent. I have no question that they have had to do what they've had to do because they were left with no other course of action. So the question is who made the decision, which results in the CPS being unable to move forward with that prosecution. And look, this isn't necessarily a point being made for partisan political reasons. There's plenty of grumbling on the Labour benches, especially since the government made it pretty clear they want a closer relationship with China, something we'll be discussing with a former head of MI6 in just a little while.

2:45Is communist China a threat to our national security? Yes, of course it is.

2:50Richard Dearlove:But let's begin with our political correspondent, Mari Aurora. Mari, just remind us who these two men were and what exactly they were accused of. These are two men accused of spying for China, Christopher Berry and Christopher Cash. So Christopher Cash was a former parliamentary researcher. He actually worked with Alicia Kearns, who previously was the chair of the Foreign Affairs Select Committee. They were charged with providing information prejudicial to the interests of the state in breach of the Official Secrets Act. these alleged crimes took place between December 2021 and February 2023. And the Crown Prosecution Service have basically said, we can't go ahead with this because the evidence threshold has not been met.

3:35Up until quite recently, it appears, they thought they could get this prosecution going. They thought it was worth pursuing. Clearly, something has changed because then about halfway through September, that trial collapsed and suddenly they didn't feel they had the sufficient evidence to be able to prosecute. Now the difficulty is that we're getting different stories from the Labour Party and the Conservative Party on exactly what has gone on here. The government is arguing that the reason the evidence threshold has not been met is because at the time when these alleged crimes were committed, the Conservative government did not label China an enemy or a threat to national security.

4:18And therefore, at that time period that we're talking about when these alleged crimes took place, you cannot then foreprove that these two men were spying for an enemy state if that state was not labelled as a threat to national security or an enemy. They've changed the law now. And if this were to happen now, that wouldn't be possible. You would still be able to prosecute. But because Obviously, when these alleged crimes took place, the rules were different. The threshold was different. What Labour is arguing is, therefore, you cannot prosecute because you can't change it retrospectively.

4:50Richard Dearlove:I suppose then it all comes down to what exactly we mean by a threat to national security. And it sounds like that is a somewhat official designation. Yeah, exactly. We've had ministers from the Labour government on Sky News where they said, you know, we're not calling China an enemy or a threat. We're calling it a challenge. and that's really a continuation of the position from the Conservative Party when they used to call it an epoch-defining challenge. Here's the thing I don't understand. How did they only just realise this? The Director of Public Prosecutions was going hell for leather with this particular case.

5:23Well, this is what is so confusing because we're in a situation where this has collapsed all of a sudden, basically, despite the fact that the CPS were clearly confident enough that they could prosecute, otherwise they wouldn't have bothered all this time. And so the question you rightly ask is, well, what changed? Because if you follow the kind of arithmetic of what Labour is telling us, then actually the CPS never should have bothered in the first place. But clearly they didn't feel that way, which is why there's been so much speculation and reporting on this.

5:52Richard Dearlove:Did ministers know that this case was imminently going to collapse? We've had the government say that they are extremely disappointed that the CPS have dropped the case. So clearly they are suggesting that they want this to go ahead. They want this prosecution to go ahead. However, they won't tell us officially whether they genuinely thought this was actually going to be able to be prosecuted, whether, you know, everything was on track until the middle of September. And so we don't actually know whether they genuinely believe that this trial could have gone ahead or if perhaps they secretly saw it and thought this was never going to work.

6:28This is always going to collapse, but we're just not going to say anything and leave the CPS too.

6:31Richard Dearlove:It would be fair to say, though, that since this Labour administration entered Downing Street, they have had a relatively positive attitude towards the Chinese. In fact, you can almost argue they've been courting them. Well, that's been the criticism from some of the more kind of hawkish MPs and figures on the right and the Conservative Party, where Labour are trying to balance delicately things like trade and therefore boost economic growth with possible challenges or threats, however you want to call it, from China. We still do a lot of trade with China and we don't want to aggravate them at a time where Rachel Reeves is in a really unenviable position in terms of the economy.

7:15It's not getting the growth that she would have hoped for as of yet. And therefore Treasury clearly don't want anything that might put those plans for economic growth and improving the economy into jeopardy. The Conservative Party are directly accusing Labour of putting things like economic growth and trade over national security. They are going that far and saying that Labour is jeopardising national security because of economic growth and trade relationships.

7:43Richard Dearlove:Whatever the truth of the matter, none of this looks good for Securstan. No, it doesn't. And this is part of the problem, is because there are still so many unanswered questions, then the speculation rumbles on and while you have speculation and essentially this kind of information vacuum of exactly how on earth we got here then you get more and more reporting about what could have happened and so the difficulty for for Keir Starmer is he's now on this trip to India and he's trying to show how great he is and how great he can be in terms of bringing you know money into the UK investment into the UK while back at home there is this ongoing row and confusion about exactly what has gone on with this China spy trial that is no more and what he knew and when he knew it.

8:31And I think that is what's uncomfortable for the Prime Minister at the moment.

8:34Richard Dearlove:Thanks, Mary. Well, let's think a bit more about the potential threat from China. So Richard Dearlove was head of the Secret Intelligence Service, or as we best know it, MI6. He now hosts the foreign policy podcast, One Decision. Richard, compared to other nations, How active is China in terms of espionage? It's become very active. This has been a sort of process over the last, I would say, 20 to 30 years. And it operates through three principal agencies, the Chinese military intelligence, the Ministry of State Security. And then there's a third organization which people don't talk about much, which is a very large department of the Chinese Communist Party, which is the United Front Works Department.

9:21China now operates globally as an intelligence power, and it is very active. And if you go back into sort of recent communist Chinese history, the intelligence organisations have been a primary vehicle for China's economic growth.

9:45Richard Dearlove:Just walk me through then some of the methods that these disparate entities, these disparate intelligence agencies are using to project Chinese power. Basically, they use all the tools that sophisticated intelligence services use. I mean, they're trying to suborn individuals who will spy for China. They are, let's say, interfering politically in countries where they have strong influence economically. You know, they're using a whole range of techniques and they become much, much more active. Richard, I mean, the director of public prosecutions says that evidence was not provided that Beijing represented a threat to the national security of the United Kingdom.

10:34Richard Dearlove:Does such evidence exist? Well, of course it does. I mean, I just can't see how the government got themselves into such a ridiculous tangle over this case. I mean, I'm mystified. I mean, either the law is an ass or the government's an ass or both of them are.

10:58Is China a threat to national security? Well, of course, it's a threat to national security. And, you know, there are many, many, many examples in front of us. China is certainly in some senses an adversary and is certainly in strategic competition with us and has been carrying out hostile acts against us and other Western countries. So, you know, my advice to the government would be to go back and look at this and do it again.

11:28Richard Dearlove:The argument that is being made by the opposition as of this point is that, in essence, this case was dropped because there are bigger concerns. The Chancellor, for example, wishing closer financial ties with China. What do you make of that charge? That's complete rubbish. I'm not advocating the isolation of China. I understand the economic importance of China. I understand the fact that we almost, you know, we need a relationship, a commercial relationship. But the only thing that the Chinese understand absolutely clearly is reciprocity. We treat them like they treat us. Just because we want a commercial relationship with them, it doesn't mean we can't prosecute them when they aspire on us.

12:12I'm sure you're aware of the Pollard case in the United States. I mean, he was an American Jew who worked for Israeli intelligence. But the Americans locked up for life. Yet, you know, Israel's their closest ally.

12:27Richard Dearlove:So in your mind, let's put it as plain as we can, we're just not taking China seriously enough. Well, no, we aren't. Well, first, there is an organised rip-off of the West's intellectual property. And there are certainly organised groups of students in UK universities who are there to harvest, as an intelligence operation, anything that might be useful to the Chinese. I mean, that's a clear example. But there are other long-term issues which are much more worrying and concerning in my book. Now, we've all seen the debate that occurred in the UK about 5G and Huawei, And I was one of the voices shouting loudly from the sidelines that, you know, it was absolutely out of the question that China should be allowed to build the UK's 5G for reasons of national security.

13:30And we eventually won that argument, despite the fact that the intelligence agencies, the security service and GCHQ were actually lent on, in my view, to say, oh, it wasn't really a problem. Well, it was a problem. And, you know, we followed the policies of Australia and the United States in keeping 5G out. But we now have all sorts of issues. I mean, let me just take the issue of Chinese electric vehicles.

14:03Richard Dearlove:I'll bet you something. If you turn up to GCHQ driving one of them, you're probably not going to be allowed in. Well, the Chinese do not allow Tesla vehicles onto strategic sites in China. Why? You know, they have closed areas where you can't have a Tesla vehicle in China. Why? Because, you know, Chinese cars are Chinese computers on wheels. We have a grid which is, you know, under reconstruction being adapted to, you know, transfer renewables, renewably generated electricity across the country. the switching mechanisms in the grid. Some of them are of Chinese manufacture. If you take wind turbines, the software in those, they're Chinese manufacturing with Chinese software.

14:56And all of this stuff makes us incredibly vulnerable to Chinese interference, if they wish to do it.

15:05Richard Dearlove:Richard, currently the decision over whether to award planning permission for what's become known as the Chinese super embassy is sitting on the housing secretary's desk. What should Steve Reid do about that? Well, basically, he should say no way. But, you know, OK, maybe I am biased in taking that view. But the reason I take that view is because that is a strategic location, and I understand that there are significant communications cables that go under the site. And, you know, those would be vulnerable to Chinese interception if you're going to build a Chinese embassy on top of it. once they've built the embassy up there, what goes on inside the embassy, we haven't got any control over whatsoever.

16:01If I was assured that that was not the case and that there were no cables, although all those cables were disconnected and rerouted, if they're there, and I mean, I don't know categorically that they are, but my belief is that my information is correct, then, yeah, maybe. but, you know, the Chinese, because we want to rebuild our embassy or extend our embassy in Beijing, is my understanding. Are we getting exact reciprocity from the Chinese? Because that's basically all that they understand. And just a final thought, Richard, if we don't tackle the threat posed by China

16:43Richard Dearlove:head on and soon, where are we going to find ourselves? Well, they'll take us to the cleaners. over time. The front line of their competition with the West is an aggressive development of science and technology. And, you know, that is the means at the moment that they're going to use to try to, as it were, be a dominating global power. The big issue for the 21st century, really, in international affairs, is the relationship that the West develops with China. and okay we are bit players quite important bit players but this is largely about the united states and china how are they going to deal with each other in a state you know of dynamic change the chinese are massively important players um but we have to go into that relationship with our eyes wide open they've got to think it through very carefully and this this china audit that the government has supposedly carried out, it's completely inadequate.

17:52It just doesn't even begin to address the problem. And we have to be very, very careful about how we develop this relationship. And we have to be very careful about allowing the Chinese a foothold in our critical national infrastructure.

18:11Richard Dearlove:My thanks to Sir Richard, Mary, and, of course, to you for listening. The Daily's back tomorrow. Till then, take care.

18:46New podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.