In case you missed it, since Monday an "Irish-related" attack on Britain has been "a strong possibility". At the same time, an al-Qaida attack is "highly likely" and "only a matter of time". This presumably means one will occur – though, since August 2006, when this alarmist language was first to put us on continuous alert, terrorism has been like mad flu disease, afflicting Whitehall but strangely absent from the nation at large.

I hesitate to tempt fate, but this dog's dinner of nouns and qualifiers cannot mean anything to the general public. Rather than describing a menace to the British state, the words are more a comment on English teaching in schools. They are verbal garbage, reflecting a habit of bureaucratic mind and relieving public services – airport security, railway guards, traffic police – of the need for courtesy. They just want to keep the public scared and paying taxes.

Travelling on a First Great Western train nowadays is like entering Guantánamo – a cacophony of repetitive announcements telling passengers to protect their belongings at all times and inform the police if they see anything suspicious. Likewise the fatuous frisking of old ladies at airports, the half-hearted searching of bags in shops, the reams of safety literature pouring from the nation's printers. It is the white noise of state fear.

Nothing is as absurd as Home Office "threat levels". They purport to grade the risk of something called an "attack". This is not defined, but graces a crime with the glamour of a soldierly act. It grants terrorism political status and thus dusts the security industry with the glory of defending the realm.

Above all the threat must be kept alive, sorted into classes of low, moderate, substantial, severe and critical. We are currently at severe. What regius professor of English chose these words? I would put severe below substantial, the word being a strengthener of very, while substantial has substance. But I assume Whitehall has done focus groups and sweat tests. Substantial was perhaps greeted with a shrug, while severe brought on the shakes. As for critical – mujahideen "expected imminently" to hurl bombs down Oxford Street – it is surely the most devalued word in the OED.

There is no way a member of the public can sensibly use the information that an al-Qaida threat has altered from substantial to severe. These are abstractions. Are we supposed to calibrate our dread with Theresa May each morning, treating all dark skin as suspicious and every beard as hiding a foe?

The former home secretary, Alan Johnson, raised the al-Qaida threat level in January from substantial to severe, yet added that it would be "pretty daft" to say why. Under his predecessor the security service boasted that it had tabs on 2,000 individual terrorists, 200 networks and 30 active plots. The impression was the more the merrier.

The public pays the police and security services to protect them from these bombs going off, while accepting that occasionally one will get through. But it also pays not constantly to be reminded that there are bad people in the world. It pays to be relieved of fear. May claims to be "alerting not alarming" the public by "raising its awareness". She treats terrorism as, like gay rights and climate change, in need of an Arts Council grant.

In the mid-1970s, the Provisional IRA staged some 50 explosions in London, subjecting the city to far greater mayhem than today. Somehow we survived without the gargantuan counter-terror apparatus in place today. The bombing campaign came nowhere near toppling the British government or infringing the liberty of the state. The chief threat to that freedom today comes not from terrorists but from the government's response to them. Speaking in July on the fifth anniversary of the 7/7 tube attacks, the former head of the Met's Muslim Contact Unit, Robert Lambert, commented that the then Labour government, by taking its lead from a "flawed neocon" analysis of Islam, had "not reduced but increased the chances of terrorist attacks". The government had proclaimed that an evil ideology had entitled it "to derogate from human rights considerations" and "go to war not against terrorism but against ideas, the belief that al-Qaida was a violent end of a subversive movement".

To see what is happening we probably need to return to the old journalistic maxim, follow the money. There is now an extensive police and industrial lobby in Britain dependent for its resources on maintaining a high level of public fear. The lobby thrives on its own failures. The incidents in America on 9/11 (2001) and in London on 7/7 (2005) saw the greatest ever peacetime growth in spending on security. Unlike most forms of public spending, this one could by its nature demand cash with menaces and with no account of value for money.

The fear must be sustained if the resources are to flow. The west has been starkly free of terrorist "attacks" over the past decade. The lobby may plead this proves the money was well spent, but the staggering cost of anti-terrorism since 9/11, including two foreign wars, must have surpassed all actuarial calculation of western lives saved thereby.

Hardly a month goes by without someone in authority reminding us to expect another attack imminently. I have lost count of statements from MI5, the police and other experts that an attack is a matter of "not if, but when". The attacks never occur, or are brilliantly thwarted, like the one reportedly prevented this week, apparently by dropping bombs from drones on Pakistani villages. What is noticeable is that the tempo of such threats increases immediately before Christmas and when the security lobby is involved in a fight over money, as now.

This week the Police Federation chief, Paul McKeever, warned that policing the Olympics would be a "great burden" because of budget cuts. His union has constantly upped the "threat to the Olympics" to win £800m for just two weeks of cover – more even than Beijing. Now it wants more. Meanwhile the Met's John Yates, head of specialist operations, has declared that any cuts to his budget would be exploited by al-Qaida and "leave Britain vulnerable to terrorist attack". This is from a force with so much money that it can spend £48m on a "human resources computer" that is still not ready, and deploy a helicopter and 59 gunmen to kill one Chelsea barrister.

Britain's security/industrial complex has been allowed to run berserk under the long shadow of 9/11 and 7/7. It has been allowed to undermine civil liberty and tax the exchequer of a fortune. Now it has the effrontery to tell Britons that they are not safer but less safe as a result. After 10 years of soaring expenditure, the threat has actually risen.

I do not believe that this apparent failure to deliver value for money is real, or that some catastrophic explosion is imminent. I think this is just another lobby seeking money. As it plays with its words, the rest of us may shrug and go about our business. But I sometimes wonder who is the real terrorist.