This hardback has been sitting on my shelf for over a decade -- finally tackled it. A worthy read. One topic I found of interest is the history of why GCHQ doesn't have their employees take polygraphs. Here's some excerpts (page numbers from the 2010 hardback):
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p101: since 1948 the CIA had been using the polygraph or lie detector test, initially only to screen people who had access to sigint, although its use was soon extended to all CIA employees. By May 1951 it had been adopted for all American code-breakers, and polygraph examiners were testing 'from seven in the morning till eleven at night' to clear the backlog. Polygraphs soon became an embedded part of American sigint culture, but were not introduced at Britain's GCHQ.
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p381: In February 1983 Beach took his commission on a visit to Washington, which they found to be 'most valuable'. All the Americans and 'particularly the NSA and CIA made no secret of their belief that their personnel security procedures are more effective than our own'. What impressed them most was the routine use of the polygraph. They noted that in 1962 a secret and unpublished section of the Radcliffe Inquiry into security procedures in the Civil Service had recommended its use. The Security Commission thought it significant that during his interrogation Prime had conceded that if he had faced a polygraph test prior to joining GCHQ in 1968, he would not have applied to the organisation. Their strongest recommendation was a pilot scheme for the introduction of the polygraph at Cheltenham. They accepted that it would take time to build up expertise in its use, and that the political obstacles to its introduction would be 'formidable'. Benson Buffham, a former Deputy Director of NSA who had recently served as the American Liaison Officer to GCHQ, or 'SUSLO', visited London to confer on security, and made it very clear that the Americans were keen to see the polygraph arrive at GCHQ.
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P424: As we have seen, in July 1983, having reviewed the Prime case and Visited NSA, the Security Commission had recommended the introduction of the polygraph at GCHQ. The unions feared that the polygraph was inaccurate, and that many innocent individuals would fail the test. Staunch union resistance was guaranteed, so the removal of the unions seemed to be a prerequisite for the introduction of this unpopular security measure.
The dark shadow of the polygraph also explains why government did not pursue obvious options such as a 'continuity of service' agreement — effectively a non-strike agreement — with the unions. Brian Tovey told the Employment Select Committee of the House of Commons that this would have left him perfectly satisfied. However, it would not have solved the underlying problem of union resistance to the polygraph. This left managers with no choice but to go down the more radical road of replacing the unions with a staff federation. The polygraph also shut off the other sensible option of closing union membership to new joiners. Given that union membership at Cheltenham was only about half the staff, this would have reduced it significantly over a decade, with the unions gradually withering on the vine. However, the polygraph issue required them to be removed abruptly.
NSA did not give GCHQ any sort of directive on the issue. Brian Tovey has stated that the Americans never explicitly requested the removal of trade unions at GCHQ, and that it was his own initiative. However, they had directly and repeatedly requested the introduction of the polygraph, and former Deputy Director of NSA Benson Buffham had come to London to reinforce this. The team NSA sent to Britain to assess the damage caused by Geoffrey Prime concluded that while the systems for handling sigint product securely were standardised throughout the UKUSA alliance system, the protocols for personnel security were lamentably weak. The sense of urgency was increased by the fact that some believed that Prime had assisted the KGB with the recruitment of further moles. The pressure for the polygraph influenced the way in which the trade union ban was implemented.
The unions were clearly petrified by the polygraph. In May 1983 the Cabinet Secretary, Sir Robert Armstrong, assured them that 'no loyal servant has anything to fear' from the polygraph, and promised further talks before it was introduced. However, the unions believed it would be introduced quickly, and perhaps operated by Americans. In July 1983 Armstrong explained that there was 'a risk that the USA would question UKUSA exchange if the UK did not at least, run a pilot scheme to see if the polygraph was feasible'. He assured the unions that the machines would not be operated by Americans, but by M15 personnel who were even now undertaking a fourteen-week training course in the USA. The unions now saw the introduction of the polygraph as a foregone conclusion. At Cheltenham, both security (R Division) and personnel (E Division) were thought to be keen, since it was known that Russian agents were briefed to avoid exposure to the polygraph if at all possible. By November 1983 the unions suspected that E3, part of the personnel division, already had machines hidden on the premises at GCHQ, although there were fervent denials. The following month, senior staff at GCHQ volunteered to act as guinea pigs, and a pilot machine was allocated to Personnel Security Branch (R12). Margaret Thatcher was personally committed to the polygraph, arguing that 'people employed in work which makes them privy to that nation's highest secrets would accept the logic' and realise that it was aimed at strengthening their organisation against 'hostile penetration'.
The trade unions had good reason to resist the polygraph. The Royal Commission on Criminal Justice Procedure had recently examined the device, and concluded that while the claimed 86 percent success rate sounded good, what it meant in practice was that there existed a high chance of honest people being branded a security risk. Moreover, any agents who slipped past the polygraph — which required only a modicum of training — would have their reliability falsely confirmed. No fewer than four NSA staff who defected to the Russians had taken and passed the polygraph test. .... The worry was not so much the testing of new entrants to GCHQ, but that many loyal staff" with years of service might fail the test and have their clearances removed.
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P433: Ironically, the government's drive to bring in the polygraph arguably the main reason for the abrupt nature of the ban in January 1984, failed. In 1985 the House of Commons Select Committee on Employment took a close look at the polygraph with experts from the British Psychological Society. They were scathing, and dismissed the machine as useless. Whitehall now chose to run a field test on members of M15, hoping to prove its effectiveness. Although the tests were secret, the results were leaked to the Sunday Times by mutinous officials. Two hundred members of M15 were tested. No less than 37 per cent failed, and in theory would now have to be removed from their posts as security risks. The government did not want to admit to the Americans that things were not going well. On 3 March 1986, Bill Odom, Director of NSA, made a note to himself to 'Ask Peter Marychurch about poly of his people,' but he does not seem to have had a clear answer from his British counterpart. By the end of the year, NSA realised that GCHQ was dragging its feet, and was reported to be 'angered and dismayed'.
It was not until 8 December 1988 that Margaret Thatcher quietly announced that, after considering a new report by the Medical Research Council, and a further report by the Security Commission, the so-called 'second phase of trials would not now go ahead'. This was a quiet admission of defeat. Everyone knew that the polygraph was unscientific and inaccurate. Its main value was that it deterred those with a guilty conscience. NSA had observed that the greatest benefits it provided were the things people confessed to before or immediately after taking a polygraph test because of the state of anxiety it created. Infamously, President Nixon once discussed the polygraph with his inner circle and offered remarks in much the same vain: 'don't know anything about polygraphs, and I don't know how accurate they are, but I know they scare the hell out of people.'