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TheTelegraph

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Royal cutbacks Prince reorganises businesses in face of financial difficulties

Playing the prize for laughs The judges say this year’s Man Booker shortlist is funniest ever

BUSINESS P33

WORLD NEWS P14

Iran nuclear threat NATO SecretaryGeneral calls for missile shield

Spreading the blame BP report points finger at Halliburton and Transocean

LOTTO 08/09

LOTTO 11/09

10 8 26 34 48 49 4 20 21 35 39 40

Bonus Ball 6

Bonus Ball 28

There was one winner of Wednesday’s £2.6m jackpot and two winners of Saturday’s £5.0m prize

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Saints and sinners Our full MPs’ expenses database can be found online telegraph.co.uk/mpsexpenses

By Gordon Rayner Chief Reporter PHIL WOOLAS, the former immigration minister, could be thrown out of Parliament after being accused of breaking electoral law with a “toxic” dirty tricks campaign against a general election rival.

The Labour MPwas appearing at the High Court this week to face allegations that he told “devastating and far-reaching” lies about his Liberal Democrat opponent as he tried to cling on to his seat, which he won with a majority of just 103 votes.

MrWoolas is the first MP for 99 years to face a challenge to his election victory on the basis of publishing false statements about an opponent. If he loses the case, which is scheduled to last five days, he would face being disqualified by the court from sitting in the House of Commons.

MrWoolas denies the allegations made by Elwyn Watkins, the defeated Liberal Democrat candidate in the Oldham East and Saddleworth constituency.

The most damaging claim is that MrWoolas deliberately played on racial tensions in his constituency by falsely claiming that MrWatkins was “in league with extremist Muslims”.

His team allegedly hoped that by exploiting the racial divide in Oldham, the scene of race riots in 2001, they would “bring out the white Sun-reading vote”. The incendiary remark was made in an email allegedly written by Steven Green, MrWoolas’s campaign adviser, which is contained in court papers seen by The Telegraph.

The MP’s election agent, Joseph Fitzpatrick, allegedly sent an email in the run-up to the poll saying: “We need … to explain to the white community how the Asians

Phil Woolas celebrates retaining his seat in May. His Lib Dem opponent Elwyn Watkins alleges that false claims made in newspaper-style election leaflets, below, swung the vote in the former minister’s favour will take him [Woolas] out … If we don’t get the white vote angry he’s gone.”

MrWoolas is accused of fighting a “dirty and dishonest” campaign full of “lies, smears and totally false allegations”. MrWatkins’s lawyers argue in High Court papers that: “MrWoolas, believing that he was going to lose the election, resorted to terrifying white voters into believing that there was an extremist militant Muslim element in Oldham, who were in cahoots with MrWatkins. He wished to convey the message that a vote for Mr Watkins was a vote for extremists.”

Emails between members of MrWoolas’s campaign team, obtained by Mr Watkins’s lawyers, detail their alleged plans to claim falsely that MrWatkins supported Islamic extremists and was “prepared to condone death threats” against MrWoolas to secure their vote. Pamphlets sent out by MrWoolas also falsely suggested that Mr Watkins was receiving illegal funding from abroad and had lied about where he lived, it is claimed.

MrWoolas is accused of breaching the Representation of the People Act 1983, in which it is an offence to “make or publish any false statement of fact” about an opponent. MrWatkins’s legal

ANDREWSCHOFIELD/REXFEATURES

team claims that “MrWoolas exploited the privilege of free speech in order to demonise his opponent and to mislead the electorate … the false statements were devastating and far-reaching, and were made in an exceptionally marginal constituency”.

MrWoolas, the MP for Oldham East and Saddleworth since 1997, faced an uphill battle to cling on to his seat following disclosures about his expense claims by The Daily Telegraph last year.

He submitted receipts for items including tampons and women’s clothing, though he denied that he had claimed back money for the items on his expenses.

Continued from page 1

au pair. We all knew her because she used to hand out drinks at constituency social events.”

The Morris Chase report details an alleged “conspiracy” among Tories to undermine Mr Djanogly. The private detectives conclude: “There does not appear to be any current activity among the conspirators to revive the expenses allegations.

“This is because they do not have the time or resources to conduct investigations to trace the au pairs.” It added: “All four sources say that you have been damaged severely politically. Brown said, ‘Jonathan has lived to die another day.’” Their private report also alleged that another senior aide was too “scared” to speak out over “the whole inside story” of his expense claims.

Last week, Downing Street sources said Mr Djanogly’s actions “can’t be condoned”. The MP defended his actions because he wanted to identify the source of allegations in newspapers. In a statement referring to the private detectives, he said: “A report of their investigation was prepared and sent to me on a confidential basis and I am very disappointed to see the report released publicly without my consent. I would never have contemplated condoning anything unlawful and dishonest in the investigations, and the investigators have assured me that their inquiries were carried out in an entirely lawful manner.

“I am sorry if some people judge that I made a mistake. With hindsight I can see that I may have overreacted, but I was being subjected to very malicious, anonymous attacks on my family. I paid for the cost of the investigation myself and did not claim it back on parliamentary expenses.”

Morris Chase was in a controversy in 2007 when it was hired by a firm of lawyers for a civil case. It emerged that details of bank accounts had been obtained illicitly and provided to the client. Morris Chase said it had hired another company and had “not instructed” it to obtain the confidential data. The judge agreed that Morris Chase had not instructed anyone to obtain the information but concluded that it had “almost certainly” been obtained illegally.

Commons emergency debate over Coulson allegations, page 6 telegraph.co.uk/expat

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News

Sorry, Coleen Parents of girl in Rooney sex claims issue anapology

By Rowena Mason and James Hall FINANCIAL regulators have reached a deal to force global banks to double the spare cash they hold in the biggest shake-up since the economic crisis nearly brought down the system.

Mervyn King, the Governor of the Bank of England, is one of 27 “heads of supervision” who helped agree on a deal in Basel, Switzerland.

Details of the Basel III regulations were unveiled on Sunday in a move designed to prevent banks from running out of liquidity as they did in the autumn of 2008. The new rules, to be phased in between 2015 and 2018, demand that banks hold 4.5pc of common equity and retained earnings. The current minimum for core Tier 1 capital is 2pc.

They also insist on a “buffer” of 2.5pc to be built up in good times, taking the total capital required to 7pc. Banks can dip into the buffer in times of hardship, but if so, they must restrict dividend payments.

Jean-Claude Trichet, the President of the European Central Bank and chairman of the committee, called the agreement “a fundamental strengthening of global capital standards”.

The new requirements may prompt a new wave of rights issues in Europe, kicked off by Deutsche Bank’s record €10bn (£8.2bn) issue announced last weekend. Deutsche Bank’s giant cash call is partly to fund a greater move into retail banking through buying a bigger stake in Postbank, but it is also aimed at shoring up its balance sheet.

“We can expand our strong position in our home market, take a leading position in the European retail banking business and significantly enhance Deutsche Bank’s revenue mix,” said Joseph Ackermann, the bank’s chief executive.

“Furthermore, with this capital increase we are strengthening the bank’s equity capital in light of expected regulatory changes.”

On Sunday, the three main US banking regulators expressed support for the new rules. In a joint statement, the regulators said: “The agreement represents a significant strengthening in prudential standards for large and internationally active banks.”

European banks in Germany, Spain, Portugal, Greece and France are likely to be the worst hit by the rules, because they are generally the least well capitalised.

The European Banking Federation has written to Mr Trichet warning that tight rules may have a disastrous effect on inter-bank and customer lending.

However, British banks are expected to remain relatively unscathed. The UK regulator has insisted that banks save high levels of capital after the 2008 crash, with Lloyds already boasting a 9pc capital ratio and Barclays 13pc.

“Once the new rules and requirements are in, this may improve stability of banks and of the financial system,” said Angela Knight, the chief executive of the British Bankers’ Association.

“The transition is the critical bit as the rules take money out of the economy. Even though the UK banks are in a much stronger place than most on capital, the Basel changes need to be implemented over a long timetable and very carefully sequenced to avoid prolonging the downturn.”

Business, pages 33-37

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THEcouplewhosedaughter is at the centre of allegations aboutWayne Rooney apologised to the footballer’s wife last week.

Hamish andDanaThompson spoke out following claims that Jennifer, 21, waspaid £1,200 regularly by the England star to sleep with himwhile Coleen Rooney waspregnant.

MrandMrsThompsonissueda statement, saying: “Following the various newspaper articles concerning our daughter Jennifer, wewould like to offer ourmost sincere apologies to Coleen Rooney andher family.

“Mywife and I would never condonewhat has ormayhave happened. Wehadabsolutely no idea about any of the allegations.”

Their daughter is said to havemet theManchester United striker for sexual intercourse at the city’s fivestar LowryHotel. MrsRooney, 24, waspregnant with their sonKai, now 10monthsold, at the time. She is at her parents’ home in Huyton, Liverpool, as she decides what to do.

MrandMrsThompsonwere believed to beonholiday whennews of their daughter’s relationship broke. The couple requested privacy and said they would not discuss the matter further.

“Wewouldalso like tomake it clear that wearenot interested in being interviewed byanynewspaper ormagazine nomatterwhat offer has ormaybemade,”thestatement said, indicating that this included their three sons andother family members.

Miss Thompsonwasborn in Aberdeen but brought up in Qatar.

Jennifer Thompson slept with Wayne Rooney when his wife Coleen, left, was pregnant, it is claimed

Her father is reportedly anoil companyexecutive. After the family returned to Britain andmovedto Heaton, in Bolton, shewasprivately educated at Lord’s Independent School, which charges £1,555 a term.

ABritish Airways employee claimed last week that Rooney attempted to seduce her during his stag party in Ibiza. Rebecca Haynes said she rebuffed Rooney after he approached her in anightclub.

By Christopher Hope UNIONS are threatening co-ordinated strikes, civil disobedience and a “campaign of resistance not seen for decades” as they seek to increase the pressure on the Government over public sector cuts. Mark Serwotka, general secretary of the Public and Commercial Services Union (PCS), described industrial action as “inevitable” and said the public should prepare for “a campaign of resistance the like of which we have not seen in this country for decades”.

Bob Crow, general secretary of the Rail Maritime and Transport union, suggested a campaign of “civil disobedience” was needed to fight spending cuts.

Delegates to this week’s annual meeting of the Trades Union Congress will be asked to support joint industrial action as well as other forms of protest.

A motion to oppose “attacks on jobs, pensions, pay or public services” has been signed by most of the biggest unions including Unison, Unite, GMB, PCS, the Fire Brigades Union and the NASUWT teachers’ union.

A demonstration is being planned for next March, which could attract hundreds of thousands of people.

TheTelegraph

By James Kirkup INFLICTING deep cuts on the Armed Forces could threaten the special relationship between Britain and the United States, President Barack Obama’s defence department has warned the Government.

In private exchanges, the Pentagon told defence ministers and senior officials that the US was worried that Britain’s cuts could widen the transatlantic divide in military power and spending.

The warning could put new pressure on the Treasury to limit planned cuts in Britain’s defence capabilities.

The National Security Council will soon meet to discuss the detailed impact of the cuts. Its Strategic Defence and Security Review will reshape the nation’s defence strategy and raise questions about Britain’s role in the world.

An agreement between Nato countries commits them to spending at least 2 per cent of their gross domestic product on defence. Britain is one of the few Nato members apart from the US that currently meets that goal. The £37billion annual defence budget could be cut by almost a fifth as the Treasury squeezes public spending and Dr Liam Fox, the Defence Secretary, struggles to pay for an unfunded “black hole” for new equipment. Dr Fox is considering flying out to Washington to meet US officials to assuage worries.

Whitehall sources have disclosed that provisional estimates from Ministry of Defence negotiations with the Treasury show core defence spending could fall below

Nato’s 2 per cent standard — perhaps to as little as 1.7 per cent of GDP. The US routinely spends more than 4 per cent of GDPon defence, and military analysts say the widening gap will make it harder for European forces to work with US forces equipped with ever more sophisticated equipment.

It is understood that a senior American official recently called the MoD to discuss “concerns” about the prospect of an even greater spending gap.

Questions over Trident, page 4