Baldwin publicly admitted to intelligence failure, explaining to the House of Commons that his forecast of German air power expansion, given the previous year, was off the mark.104 In a dramatic confession, he continued, ‘Where I was wrong was in my estimate of the future. There I was completely wrong.’ He also admitted that there was simply a lack of good intelligence. ‘I tell the House so frankly, because neither I nor any advisers from whom we could get accurate information had any idea of the exact rate at which production was being, could be, and actually was being speeded up in Germany in the six months between November and now.’ He did not stop there. Going beyond lamenting a dearth of facts, he added: ‘We were completely misled on that subject.’ This was a damning judgement of the intelligence assessments, and amounted to an admission that the British secret services had been defeated by a German deception. ‘I will not say we had not rumours,’ the prime minister continued. ‘There was a great deal of hearsay, but we could get no facts’ – aside from those which came from Hitler himself: hardly the most reliable source.105
Baldwin was refreshingly unafraid to admit mistakes.106 Like so many prime ministers publicly discussing intelligence, however, his performance was ‘dishonest, if politically expedient’.107 The Foreign Office and the Industrial Intelligence Centre had offered a less complacent view. By publicly blaming intelligence, Baldwin had put at least one MI6 officer’s job on the line, while Christopher Bullock, the permanent secretary at the Air Ministry, also worried about his future – after all, he had provided Baldwin with the soothing air intelligence estimates. In the end, though, Baldwin used the opportunity to sack Lord Londonderry, the secretary of state for air.108 The prime minister had misused the intelligence débâcle publicly in the House of Commons for political purposes and to effect ministerial change. It soon became apparent that Hitler had exaggerated his air power parity claims anyway.
The failure of British intelligence on the key question of air power actually makes Baldwin look rather better. He deserves more credit for increasing rearmament, given the weak intelligence support he received on this vital matter, and it could be argued that his decisions helped ensure victory in the Battle of Britain in 1940.109 Yet, as the historian David Dilks has argued, had intelligence been stronger, and had ‘the British appreciated the magnitude of their peril at an earlier date, had they embarked on an ambitious rearmament programme in 1934 instead of 1936’, Hitler might have been deterred altogether.110 Weak British intelligence in the 1930s, and the lack of any central assessment mechanisms, probably contributed to appeasement. Conversely, good intelligence ‘might have been the only means possible to tear the blinkers’ from ministerial eyes.111
For both MacDonald and Baldwin, intelligence services became entangled with matters of the heart. A former lover allegedly blackmailed MacDonald with compromising letters during the latter stages of his final premiership in the mid-1930s. Various accounts exist as to what happened next, but some suggest MacDonald used secret service funds to pay her off, or even asked MI6 to swoop in and seize the offending letters. Either way, somehow the blackmailer, one Mrs Forster, was prevented from sending her evidence to the press. MacDonald’s biographer sees some truth in the story, but maintains that it was ‘out of character for MacDonald himself to have authorised – much less ordered – the use of public money for such a purpose. But desperate men do sometimes act out of character.’112
For Baldwin, the stakes were higher. In 1936, increasingly frail and looking to retire, he confronted the abdication crisis. King Edward VIII was determined to marry the American Wallis Simpson. Baldwin considered her completely unsuitable, since she had divorced her first husband and was seeking a divorce from her second. The security service also knew of her Nazi sympathies, and for this reason Baldwin and his foreign secretary Anthony Eden had decided that the new King should no longer be supplied with secret documents.113 Baldwin staunchly believed that it would be better for the whole government to resign than to allow any such marriage to proceed. Running on phosphorus pills prescribed by his doctor, he was ready for this final challenge, and wondered whether destiny had kept him in office solely for the task. Oddly, this delicate piece of constitutional management was perhaps the prime minister’s most concerted effort as a personal user of intelligence.114
Edward VIII became King in January 1936. Baldwin liked the new monarch on a personal level, and met Wallis Simpson in May. By the autumn, having shown the King gossip about the couple’s relationship from American newspapers, Baldwin felt ‘the ice had been broken’. He was comfortable warning the King to be careful and discreet.115 Although the affair received front-page coverage in America, remarkably the King persuaded the British press to say nothing. The crisis erupted in November, when Edward summoned the prime minister and declared that he intended to marry Mrs Simpson. Unsurprisingly, he was used to getting his own way, and was immune to appeals to duty from Baldwin.116 In addition to creating tension between Buckingham Palace and Number 10, the crisis brought Baldwin into direct conflict with Vernon Kell at MI5. In December 1936, the prime minister demanded that MI5 investigate Mrs Simpson, but Kell declined. Baldwin certainly disliked the American socialite, once stating ‘I have grown to hate that woman.’ He felt she had done more to harm the monarchy ‘in nine months than Victoria and George the Fifth did to repair it in half a century’, and noted approvingly that a friend of the King had referred to her as ‘a hard-bitten bitch’.117 It was more than personal, though – Baldwin feared a constitutional crisis of sovereignty. He also felt ‘no other suitable machinery existed’ to conduct such a sensitive operation.118
In what was a rare confrontation with a prime minister, Kell disagreed. He argued that the proposed marriage would not threaten the realm, and was consequently no business of MI5’s. The prime minister refused to give up. He pressed Kell further, and the director-general felt compelled to discuss the issue with his deputies. They were seemingly persuaded, and reluctantly agreed to conduct telephone and physical surveillance. MI5 consequently made ‘certain delicate enquiries’. Surveillance of Mrs Simpson’s phone revealed that she had another secret lover, a Ford car dealer in Mayfair. The King was never informed. Special Branch also apparently watched Mrs Simpson, and drew up a file documenting her liaison with the car dealer, whom they described as ‘very charming, very good looking, well bred and an excellent dancer’. Even while the King was considering abdication, Mrs Simpson was seeing her other beau, upon whom she lavished expensive gifts and money.119
Baldwin’s government also targeted the King. Horace Wilson, the prime minister’s adviser at Number 10, asked the head of the General Post Office, Thomas Gardiner, to intercept all phone calls between the King’s addresses, including Buckingham Palace, and certain addresses in both Continental Europe and London where Simpson was likely to be staying. Five days before the abdication, the Home Office put the ‘most secret’ request in writing.120 ‘Tar’ Robertson, an MI5 officer better remembered for his wartime role in the Double Cross deception operations, claims to have been involved. He apparently entered Green Park at night to access a GPO junction box hidden in the bushes and tap the phone line between the King and his brother, the next in line to the throne, in order to ‘see how the situation was moving’.121
Intelligence gathered by such means not only helped Baldwin to deal with the King by providing context, it also enabled him to monitor and control the international press during the crisis. Several unhelpful stories were intercepted