Unlock the secret services - for their sake as well as ours

General Vernon Walters, the distinguished and polyglot American soldier diplomat whom George Bush made ambassador in Bonn, used to enjoy recounting the remark made to him at a Washington dinner by a senior Soviet armed forces figure accompanying Mikhail Gorbachev on his first visit to the US. "For 40 years," said the eminent Communist general, a World War II veteran, "I have been reading the KGB's top secret reports on your country. But I have learned so much more in the last 48 hours."

This story tells you more about detente than the quality of Soviet intelligence. It's nevertheless a graphic illustration of how the thawing of the Cold War transformed the role of the great intelligence services of East and West: how it changed the rules of the Great Game itself. Which was why in 1992 it was no longer remotely sensible, if it ever had been, for MI5 to be keeping live files on Peter Mandelson because he had once, in the early 1970s, been a member of the Young Communist League. Did it also, for example, keep files on Denis Healey, an ex-Chancellor and Defence Secretary, who had also never made a secret of his youthful membership of the Communist Party? It now looks a little more possible, in the wake of the scattergun, and in some cases rather vague, revelations by the ex-MI5 agent David Shayler, that we will find out. And it is altogether possible that the answer, reprehensibly, will be yes.

But that isn't the main point. Shayler may be a rather flaky witness. He doesn't seem to be quite sure whether the main fault of his former employers was that they were too cautious or not cautious enough. But by telling us at least a few things we didn't know, he has dramatised the central problem of the intelligence agencies: their chronic lack of accountability to the taxpayers whose money keeps them in business and whom they are there to protect. And that problem becomes more, rather than less, acute now that the fall of the Berlin wall has made a lot of what the security services' paymasters are being protected from, if not less substantial, at least less obvious.

This isn't at all a case for abolishing the security services. MI6 has employed some outstandingly brave public servants, as different as it's possible to be from the gross, bibulous bully depicted in John Le Carre's latest novel The Tailor of Panama. And anyone who thinks that high quality, secretly acquired intelligence shouldn't have been deployed against the IRA is living in a sentimental dream world. Shayler's claim that MI5 could have somehow stopped IRA terrorism in its tracks if it had been less bureaucratic is easily the least convincing he has made; what evidence there is suggests that the security services - which have a record of sifting and analysing complex data which the police acknowledge they don't have - have been successful in Northern Ireland. Senior police officers also attest to some early successes for MI5, using the same skills, in its more recently conferred lead role against organised crime. Which suggests that Robin Cook may have been sensible yesterday to outline an important role for MI6 in the war against international drug trafficking. State-sponsored international terrorism remains a potent threat. Even postwar Russia remains an unstable geopolitical force. If British troops are in Bosnia, so too should be British intelligence. And so on. But precisely because so much of what the security services do goes on in the dark, and because at least some of its surveillance will inevitably cover those innocent of any threat to the security of the state, they need to be subjected, as agencies, to more, rather than less, scrutiny.

Looking at the money would be a good start. The obscurity behind which the security services allocate their resources makes it impossible to ask the crucial questions. How much of what MI5 and MI6 are doing is what they're good at? And how much of it either shouldn't be done at all, or should be done by someone else? The security and intelligence services admit, under the Cabinet Office heading of "administration and operations", to spending pounds 713m this year, rising to pounds 776m in 1999-2000. But is that the whole picture? And how is it, as most Treasury officials suspect, that this expenditure has increased since the mid-1980s while the defence budget has gone down from something like 5 per cent of GDP to around 3.5 per cent? Have the services been spending more on necessary counter-terrorism measures? Or simply inventing new and mysterious things - like stealing other countries' negotiating briefs at international summits - to do now the Cold War is over? It is in no one's interest not to know the answers. And it simply isn't credible that the services could not do more to break their spending down publicly without compromising operational security.

As it happens the new government has taken the bold step - which rather surprisingly it has not yet announced - of submitting the intelligence services to one of the comprehensive spending reviews ordered by Gordon Brown and Alistair Darling. An interdepartmental committee is currently seeking to expose them to zero-based budgeting, a Treasury discipline which asks the department or agency concerned to explain from first principles the value of everything it does. But ministers will have to be tough; when an effort was made from within the Treasury to do the same thing in the 1980s, it foundered when the security services, almost certainly with Margaret Thatcher's backing, put the shutters up.

There is more: either the forthcoming Freedom of Information Bill, or forthcoming Data Protection Bill, or both, should afford a right, even if it hedged by national security exemptions, to citizens to inspect their own files. And the parliamentary scrutiny committee, which reports directly to the Prime Minister, and seems to be able to uncover not very much, at least in public, should be given a much enhanced role, with the obligation to report to Parliament.

John Major's record on these issues is not discreditable. He made the services avow themselves. He set up some scrutiny, however rudimentary. Now the challenge for Labour is to give them at least the transparency that surrounds the CIA in the US. This is in the interests of the security services themselves. And the brightest and the best in MI5 and MI6 surely know that.