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When Anthony Blunt was unmasked as a member of the Cambridge Spy ring in 1964, Rothschild was questioned by Special Branch (though Blunt was not publicly identified as a Soviet agent until 1979 in the House of Commons by Prime Minister Margaret Thatcher). Rothschild was cleared, and continued working on projects for the British government.
Rothschild was head of the Central Policy Review Staff from 1971 to 1974 (known popularly as "The Think Tank") a staff which researched policy specifically for the Government until Margaret Thatcher abolished it.
In 1971 Rothschild was awarded an honorary degree from Tel Aviv University for the advancement of science, education and the economy of Israel. It was followed in 1975 by an honorary degree from Jerusalem's Hebrew University. The annual "Victor Rothschild Memorial Symposia" is named after Rothschild.
Thatcher years and Spycatcher
In the 1980s, Rothschild joined the family bank as chairman in an effort to quell the feuding between factions led by Evelyn Rothschild and Victor's son, Jacob Rothschild. In this he was unsuccessful as Jacob resigned from the bank to found J. Rothschild Assurance Group (a separate entity, now St. James's Place plc).
In 1982 he published An Enquiry into the Social Science Research Council at the behest of Sir Keith Joseph, a Conservative minister and mentor of Margaret Thatcher.
He continued to work in security as an adviser to Margaret Thatcher.
He appears several times in the book Spycatcher, which he hoped would clear the air over suspicions about his wartime role and the possibility he was involved in the Cambridge spy ring.[citation needed] In early 1987 Tam Dalyell MP used parliamentary privilege to suggest Rothschild should be prosecuted for a chain of events he had "set in train, with Peter Wright and Harry Chapman Pincher" which had led to a "breach of confidence in relation to information on matters of state security given to authors"
He was still able to enter the premises of MI5 as a former employee and was aware of suspicions there was a "mole" in MI5, but felt himself above suspicion. While Edward Heath was Prime Minister, Rothschild was a frequent visitor to Chequers, the Prime Minister's country residence. Throughout Rothschild's life, he was a valued adviser on intelligence and science to both Conservative and Labour Governments.
In 1993, after the dissolution of the Soviet Union, six retired KGB colonels, including Yuri Modin, the spy ring's handler, alleged Rothschild was the "Fifth Man". Modin claimed, "Rothschild was the key to most of the Cambridge ring's penetration of British intelligence. 'He had the contacts,' Modin noted. 'He was able to introduce Burgess, Blunt and others to important figures in Intelligence such as Stewart Menzies, Dick White and Robert Vansittart in the Foreign Office...who controlled MI6."Christopher Andrew and Vasili Mitrokhin, in The Mitrokhin Archives, make no mention of Rothschild as a Soviet agent and instead identify John Cairncross as the Fifth Man.
Rothschild published an autobiography, Random Variables in 1984.
Despite being an opposition Labour party peer, in 1987, during the Thatcher Government, Victor played a role in the sacking of BBC Director General Alasdair Milne, who had backed the programmes Secret Society, Real Lives, and Panorama: 'Maggie's Militant Tendency' which had angered the Thatcher government. Marmaduke Hussey, who was Chairman of the BBC Board of Governors at the time, implied Rothschild initiated the Milne sacking in his autobiography Chance Governs All.
Rothschild took the step of publishing a letter in British newspapers on 3 December 1986 to state "... I am not, and never have been, a Soviet agent".
He was an advisor to William Waldegrave during the design of the Community Charge, which led to the Poll Tax Riots.