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Updated: 25 min 1 sec ago

International friendly: Germany 1-2 England

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There is much here in which England deserve to revel, but the most gratifying aspect of all must be that they did not let Germany limit them to a galling draw. While a misunderstanding between the captain John Terry and the substitute goalkeeper Scott Carson allowed an equaliser, the visitors pulled out of any descent into self-pity. They clinched a fully merited win against feeble opponents.

With six minutes left, Terry more than atoned for any error. The captain climbed to head home a free-kick from the outstanding Stewart Downing. The team had been on the verge of re-establishing the lead before that, when Shaun Wright-Phillips hit a post from 20 yards. In one form or another, the whole side was predatory.

Few had supposed that Gabriel Agbonlahor's debut here would come with a place in the starting line-up yet, as with previous surprises under Fabio Capello, the decision seemed logical. If a potential scorer had been ruled out when Theo Walcott dislocated a shoulder, why not draft in another quick player who has begun to finish more reliably in the past season or two?

England's side showed that Capello deemed the opposition's centre-back to be somewhat cumbersome. By pairing Agbonlahor with Jermain Defoe he had an alliance of elusive movers. There were signs of promise in the first minute, too. Defoe was offside when sent clear by his partner, but it looked as if they would be able to complement one another.

A hospitable banner in the stadium read, "Thank you for inventing the beautiful game". In England, where the awareness of the national team's relative lack of success is ingrained, such a message merely makes supporters ask yet again why other countries have made so much more of that invention.

Inferiority and dejection, all the same, were not to be the prevailing characteristics of the 7,000 England fans present. Each team may have been far from full-strength, but it was the weakness of Germany that was glaring in the first-half. The opener that Joachim Löw's side conceded was laughable. When Downing curled in a corner from the right, the goalkeeper Rene Adler missed the ball entirely. It then broke off Agbonlahor before Matthew Upson turned it home to record his first goal for England.

So incapable did Germany look that the visiting fans soon deemed it safe to chant, "Are you Scotland in disguise?" Capello's side then had an air of easy confidence. From the balance in central midfield between Gareth Barry and Michael Carrick, to the speed and width of the attack, England seemed well-equipped.

In contrast, Germany were disjointed and when Jermaine Jones shovelled a pass straight out of play, the home crowd cannot have been wholly surprised. Their side came to life solely at set-pieces with Heiko Westermann, for instance, heading askew from Bastian Schweinsteiger's free-kick in the 33rd minute. At that stage, England barely noticed Germany.

The surging confidence could be seen all over Capello's line-up. Downing was uninhibited enough to cut in from the left for an effort that needed a competent save from Adler. This friendly held significance then, particularly for the Germany fans, who booed their players from the field at half-time.

As has so often been the case, however, the most potent threat to England in periods of domination was England themselves. In the space of a minute a ghastly miss from a chance that would effectively have ended the contest was followed by Germany's equaliser. The blunder was Darren Bent's. The replacement for Defoe was put through by Barry but after rounding the substitute goalkeeper Tim Wiese, he then put the ball wide of a post.

It was so outlandish that it left minds boggling. That, at least, may be England's most viable excuse for what ensued. The ball was knocked forward by Germany and Terry tried to shield it in the hope that Carson, on for James, would gather it. Patrick Helmes capitalised on the complacency. Carson had not advanced fast enough and the striker, Miroslav Klose's replacement, contrived to get a touch and roll the ball into an unattended net.

Until then it had been England who held the edge. Downing, revelling in the occasion, forced his way through a tackle by Schweinsteiger before putting a shot wide. The temptation was to conclude that Germany were having a particularly severe off-night, but that tends to ignore the fact that most opponents have toiled against Capello's line-up of late.

There was much encouragement here, even if that slipped from the mind when Carson had to pull off a save from Marko Marin that would have put Germany on course for an outlandish win.

Instead it would be England who reached the deserved destination of success in Berlin, where Germany had not lost for 35 years.

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Police scour BNP membership to find officers breaching ban

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Every police force in the UK was tonight scouring the leaked British National party membership list for names of serving officers, after the Merseyside force confirmed it was investigating one officer's links to the far-right party.

The Prison Service pledged to oust any employee on the list and far-right supporters spoke of fear for their livelihoods as the BNP was plunged into crisis.

Party officials complained that hundreds of members had received threatening or abusive telephone calls within hours of the list being posted on the internet, and feared that the episode could lead to a damaging slump in support and membership.

Merseyside police, who discovered the name of one of its constables on the list, identified him and said that he had served briefly as the chief constable's driver. A spokesman said: "We are very clear: membership of the British National party is totally incompatible with the duties and values of the police service and Merseyside police. We will not accept a police officer or police staff being a member of BNP. As a matter of urgency, we have immediately started an investigation into all aspects of this case."

Scotland Yard, Surrey and West Yorkshire police also confirmed that they were studying the list, and the Association of Chief Police Officers said it expected every other force to follow suit.

A detective inspector serving in the professional standards department of a Midlands force, who was checking the list against his force personnel records, said: "Even people on the list who are lapsed members of the BNP, or who have just approached the party expressing an interest in joining, will be of interest to us."

Any officer found to be a member of the party will face disciplinary action and is likely to be dismissed. The Prison Service is also investigating whether any of its officers are on the list. The secret membership lists the occupations of some members, and one individual, living near York, is identified as a serving police officer.

Rod Lucas, a presenter with TalkSport radio station, was also identified as a member, but said he joined the BNP at the same time that he joined around 20 other organisations, during a research project. "I find the BNP distasteful, I wouldn't vote for them. Sometimes you have to get your hands dirty," he said.

Around 13,000 names and addresses appear on the list. It is thought to include a number of lapsed members and possibly the names of individuals who contacted the party and expressed interest in joining but did not do so.

However, the BNP has confirmed that it is essentially a genuine membership list. It includes the names of a number of clergymen, an actor, two solicitors, at least one doctor and a number of primary and secondary school teachers.

A handful of those contacted by the Guardian said their names appeared by mistake, claiming to have no interest in the BNP. "We're absolutely horrified by this," said a retired teacher from West Yorkshire, who has appeared on the list with her husband. "We're absolutely devastated and wondering if we offended someone and they applied to the BNP with our names as a joke. We're contacting lawyers but what can we do?"

Many were open about their membership, however, declaring they had nothing to be ashamed of. "There's nothing wrong about being a member of the BNP," said John Page, 66, recently retired from teaching foreign students at Barnfield College in Luton. "Some people at work — colleagues and students — knew about my membership. I've never had any problems with it."

Ida Jordan, 80, from Preston, said she had received threats. "It was an educated male voice. He said: 'Take care now. You are a racist.' My opinion is that we should look after our own country, our own people, but I don't have any animosity toward people of a different colour or religion."

Jan Gibson, a pensioner from Quorn in Leicestershire, said she and her husband had been members for four years. "I have nothing against coloured people at all. They can't help their colour. I can't help being white," she said. "Our friends know we are in the British National party. They actually agree with us. They have not got the courage to do what we do. A lot of people think as we do."

The release of the list offers a new insight into areas of the country that appear to have the highest numbers of supporters for the BNP.

A total of 192,746 voters cast their ballot for the party in the 2005 general election, just 0.7% of the total vote, restricted to the limited numbers of constituencies where the party put up candidates. Previous analysis of the BNP's support base relied on its recent successes in local elections. The party has its largest numbers of councillors - 12 - in Barking and Dagenham, with strong representations in councils in Stoke-on-Trent and Epping Forest in Essex.

Although the police and the Prison Service are thought to be the only public bodies that prohibit membership of the BNP, many other individuals could face disciplinary action once their membership is known.

Nick Griffin, leader of the BNP, said he had little doubt that the leak was "a disgraceful act of treachery" by disgruntled former BNP officials.

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Britain to lead fleet of EU warships to tackle pirates

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Britain is to lead an armada of EU warships to the Gulf of Aden next month to tackle the escalating problem of piracy in a mission expected to last 12 months.

The naval fleet, under UK command, would "disrupt and to tackle the scourge of piracy", foreign secretary David Miliband said today on a visit to Beirut. Piracy threatens trade and prosperity, he added.

EU military planners this week drew up a detailed mandate, including rules of engagement for the use of force, for the mission at a meeting at Northwood, Britain's joint operations centre in north-west London. Plans for the EU fleet, led by HMS Northumberland and known as Operation Atalanta, are due to formally agreed early next month, European defence officials said today.

The EU fleet, originally proposed to escort boats carrying food aid to Somalia, should include ships from ten countries.

Nato military chiefs, meeting in Brussels today, indicated that a coordinated worldwide response was required to deal with piracy amid a plethora of proposals about how to deal with the problem.

Russia today came up with its own proposal - land operations against the bases of Somali pirates.

Dmitry Rogozin, Russia's ambassador to Nato, said the view of Russian experts was that naval action alone, even involving a large fleet of a powerful nation, would not be enough to defeat the pirates, given Somalia's geo-strategic position.

"So it is up to Nato, the EU and other major stakeholders to conduct not a sea operation, but in fact a land coastal operation to eradicate the bases of pirates on the ground," he said. "Because we all know... they have their bases on the ground and of course those actions should be coordinated with Russia," Rogozin said, without making clear whether he envisaged Russian involvement in any operation.

Allied chiefs of staff, meeting in Nato's military committee which devoted most of its time to the conflict in Pakistan, said piracy must be tackled as a long-term problem involving other international, organisations, including the UN, a Nato military spokesman told the Guardian.

Most European countries take the view that piracy is intrinsically linked to the economic and political crisis in Somalia, a failed state. They do not, however, believe that al-Qaida is involved in any of the piracy incidents.

Nato has four ships on patrol in the waters off Somalia, with two protecting UN food aid convoys. That mission, Nato's first against pirates, ends next month when the EU operation, called Atalanta, starts.

"The EU presence will be bigger and more designed for the mission," James Appathurai, the chief Nato spokesman, was reported as saying today.

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Iranian blogger arrested 'as Israeli spy'

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Man known as the Blogfather held in the Iranian capital on suspicion of spying for Israel

Interest rates will fall again, Bank of England indicates

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The Bank of England sent out a clear message today that interest rates would be cut again next month when it revealed that the nine-strong monetary policy committee considered reducing borrowing costs by more than the 1.5 percentage points it announced earlier this month.

Minutes of the MPC's November meeting showed that Threadneedle Street believed "a very significant reduction in bank rate - possibly in excess of two percentage points - might be required" to prevent inflation falling below the government's 2% inflation target.

The City is now convinced interest rates will be cut by at least 0.5 points from 3% next month, because of the doveish tone of the MPC minutes coupled with a warning from the CBI that UK factories expect to cut output over the next four months at a rate not seen since the early 1980s.

City economists think that the bank rate might even come down to 2% - equalling the lowest it has been in the Bank's 314-year history.

In deciding unanimously for a 1.5 point cut, the Bank said it wanted to see the size of chancellor Alistair Darling's tax and spending boost to the economy in next week's pre-budget report before assessing the required scale of further easing of monetary policy.

The MPC also said it wanted to see whether October's co-ordinated efforts to shore up the banking system had increased the flow of credit and was concerned that a bigger reduction in bank rate would scare the City. "Too large a surprise could pose upside risks to the inflation target if the resulting depreciation of sterling was excessive," it said.

Apart from the emergency cut in interest rates on the day following Black Wednesday in September 1992, this month's move was the most aggressive action since the early 1980s.

The minutes revealed that the MPC was concerned that the markets would think it had gone soft on inflation and wanted to leave some of the easing of policy until after it had had the chance to explain its view that the financial turmoil this autumn had markedly changed the outlook for prices.

Some MPC members thought there was an argument for the Bank reserving some of its firepower so it would be able in "the months ahead to support confidence as the economy weakened."

David Kern, the chief economist at the British Chambers of Commerce, said: "The latest MPC minutes confirm a radical change in attitude. As demand prospects in the economy have deteriorated and inflation is set to plunge well below target, the MPC correctly acknowledge the need for sharp interest rate cuts.

"Businesses are now facing acute pressures in the face of a worsening recession. We urge the MPC to persevere with a forceful line and cut rates to 2.5% in December."

The CBI's monthly snapshot of industry showed that UK manufacturers are planning to retrench after seeing demand for their goods plummet as a result of the worsening global financial and economic crisis.

Showing no positive effects from the recent sharp depreciation in the value of the pound, firms said the weakness of domestic and export order books was forcing them to plan production cuts.

Capital Economics, a forecasting and consultancy firm, said that if the survey was accurate there was a risk of a double-digit fall in manufacturing output next year, in line with the drop seen in the deep recession of 1974-75.

The CBI urged the Bank of England to take advantage of tumbling inflation to cut interest rates.

Further evidence that price pressure was abating came from the CBI's monthly industrial trends survey and from a rival employers' organisation, the EEF, which said a quarter of manufacturing firms had deferred settlements or frozen pay during the past three months.

Ian McCafferty, the CBI's chief economics advisor, said: "The outlook for manufacturers has deteriorated considerably since the banking crisis took a turn for the worse in October. Expectations for output are now the gloomiest in 28 years, while firms' order books remain weak. With a sharper and more prolonged UK recession in prospect, conditions are going to remain tough for some time."

The CBI found that only 14% of firms expected to raise output over the next four months while 56% planned to cut production. That left a balance of -42 points, the lowest since 1980.

Order books edged up slightly from October, but remained at their weakest for five years. Companies have also amassed large stockpiles of unsold goods, with a balance of +25 points reporting that their inventories were more than adequate to meet expected demand.

Paul Dales, the UK analyst at Capital Economics, said: "The survey provides yet more evidence that the downturn in activity is not confined to the financial, construction and retail sectors."

He said the forecast for factory production was "consistent with output falling by around 10% per annum compared to the current rate of decline of 2%. This would be a larger drop than the 7% drop seen in the early 1990s and similar to the 12% drop in the 1974-75 recession."

The biggest post-war slump in manufacturing occurred in 1980 and 1981, when output fell by about 25%.

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TUC and IoD join forces in calling for City bonus reform

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The TUC and the Institute of Directors joined forces today to call for a reform of City bonuses in the wake of the banking crisis which has led to the nationalisation of Northern Rock and taxpayers bailing out HBOS, Lloyds TSB and the Royal Bank of Scotland.

Brendan Barber, TUC general secretary, and Miles Templeman, director general of the Institute of Directors, surprisingly agreed more than disagreed on the need for major reforms to the system, when they gave evidence to the Commons Treasury committee this afternoon. The committee took evidence from both as part of its inquiry into City bonuses.

Templeman told MPs that the system had to change after the banking crash and backed the case for the reform of remuneration committees that decide top bankers' pay, the disclosure of big bonuses paid to other senior staff and the need for a tough code of guidance from the Financial Services Authority on the future running of the banking system.

Barber went further when he condemned remuneration committees as "a cosy club often employing the same people who work on boards of other big companies". Templeman - while disassociating himself from describing them as cosy clubs - backed Barber's call for more independent and knowledgeable people on the committees. He also said that there should be " external disclosure" of bonuses and salaries paid to other senior staff in banks - though he emphasised this should not apply to other businesses.

Barber wanted tougher sanctions from the FSA to ensure that banks had enough capitalisation to prevent further collapses in the banking system. Templeman did not want the FSA to lay down specific figures but backed them taking action against individual banks if they were seriously undercapitalised.

Barber, after denouncing the "wild" salaries paid to bankers, was caught out by Labour MPs on the committee when asked whether he thought footballers and pop stars were also overpaid. He defended multi-million salaries paid to premier league players and to England's former captain David Beckham adding " the remuneration paid to David Beckham is part of a system which does not apply to the rest of the human race". The TUC's members include the Professional Footballers Association which negotiates on behalf of some star players and lower league players.

Earlier this afternoon a team of experts gave evidence to the committee, including Carol Arrowsmith, a partner with accountants Deloitte and Ronnie Fox, principal of the City law firm Fox.

Fox clashed with Labour MPs George Mudie, MP for Leeds, East and the chairman, John McFall, when he said the level of salaries and bonuses paid to City traders and bank directors had "nothing to do with the financial crisis". He blamed the crisis on the "economic situation" and said he was believer in the free market.

When challenged by Mudie over what action should be taken he said "that is up to politicians". Fox has negotiated many of the deals for City traders.
In evidence to the committee, Deloitte and Touche, said it did not believe that the remuneration system had caused the entire crisis.

"It is apparent that there is no one remuneration structure in place across all the companies that are experiencing problems ... Performance linked remuneration is undoubtedly a good thing but it is possible to have too much of a good thing and we believe that a model where bonus forms such a very large proportion of an individual's annual pay may encourage risk taking."

Deloitte also said that changes that led to the publication of top executive pay had "undoubtedly been a contributing factor in increases in executive pay and to some extent has influenced the design and operation of incentive plans."

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Indian navy destroys pirate ship after coming under fire

9 min 53 sec ago

Somali bandits terrorising the busy shipping routes around the Horn of Africa suffered a rare setback when an Indian warship destroyed a pirate "mothership" after coming under fire in the Gulf of Aden.

The Indian navy said that its frigate, one of the numerous international warships dispatched to patrol the waters around the Horn of Africa, had approached a suspicious vessel yesterday evening. It turned out to be a previously captured ship being used by pirates as a base from which to launch their speedboats far out to sea.

"The INS Tabar closed in on the mother vessel and asked her to stop for investigation," an Indian navy spokesman said today. "But on repeated calls, the vessel's threatening response was that she would blow up the naval warship if it approached."

After a heavy exchange of fire the mothership was destroyed. Two speedboats escaped.

The firefight came on a day when pirates successfully seized three other ships; a Greek bulk-carrier, a Thai fishing boat and an Iranian-chartered cargo ship carrying 36,000 tonnes of wheat from Germany. The hijackings, which followed the capture on the weekend of the Sirius Star, the Saudi supertanker carrying $100 million worth of oil bound for US, sent a powerful message of the pirates' potency.

The 330-metre long oil tanker, which is the largest ship ever to be captured at sea, is reported to be anchored near the town of Harardheere on Somalia's eastern seaboard. Its owner Vela International, a subsidiary of the state oil company Saudi Aramco, today opened negotiations for a ransom payment, according to Saudi foreign minister Prince Saud al-Faisal.

"I know that the owners of the tanker, they are negotiating on the issue. We do not like to negotiate with either terrorists or hijackers. But the owners of the tanker, they are the final arbiters of what happens there".

The ransom sought will almost certainly run into tens of millions of dollars. The pirates who in September captured the Ukranian ship MV Faina, carrying 33 tanks, initially wanted $20 million, although they subsequently reduced their demand. The Faina and its crew are being held hostage near the north-eastern fishing village of Eyl, together with more than a dozen other vessels with about 220 foreign seamen on board.

Al-Jazeera today broadcast an audio tape featuring what is said was the voice of Farah Abd Jameh, a pirate on the Sirius Star, making his demands.

"Negotiators are located on board the ship and on land," he said. "Once they have agreed on the ransom, it will be taken in cash to the oil tanker. We assure the safety of the ship that carries the ransom. We will mechanically count the money and we have machines that can detect fake money."

No ransom amount was mentioned, however, and the authenticity of the tape could not be confirmed.

While the capture of so many passing cargo vessels makes a mockery of pirates' claims to be protecting the country from foreign exploitation, complaints about illegal fishing in Somali waters are genuine. The Seafarers' Assistance Programme in Mombasa says that at any one time there can be hundreds of foreign trawlers, mostly from Europe and the east, fishing for tuna, shrimp and shark within in Somalia's 200 nautical mile exclusive economic zone.

Local fishermen complain that their catches are dropping as a result. And while some foreign ships do acquire fishing permits, corrupt officials in the government pocket the money.

Analysts say that in the long term the key to ending the piracy is establishing an effective authority on land in Somalia. In 2006 piracy all but disappeared when a group known as the Islamic Courts Union controlled most of southern and central Somalia for six months, bringing in law and order for the first time since the early 90s.

But after the Islamists were ousted by invading Ethiopian forces piracy began to flourish once more. The Transitional Federal government headed by President Abdullahi Yusuf exercises no authority on the ground or at sea and claims, with some justification, that it can do little to rein in the pirates.

Calls for more vigorous sea patrols have been mounting, but in an interview with the shipping weekly Fairplay, Royal Navy Commodore Keith Winstanley, deputy commander of the Combined Maritime Forces in the Middle East, explained the difficulties of patrolling Africa's longest coastline.

"The pirates will go somewhere we are not. If we patrol the Gulf of Aden then they will go to Mogadishu. If we go to Mogadishu, they will go to the Gulf of Aden."

The Somali prime minister, Nur Hassan Hussein, said naval patrols would not stop piracy and said instead that his country need help in tackling the criminal networks that run within and without Somalia.

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Al-Qaida leader Ayman al-Zawahiri uses racial abuse to attack Barack Obama

12 min 11 sec ago

Al-Qaida delivered its first response to America's election today in a video that used racial abuse against Barack Obama, and said the president-elect did not represent a genuine force for change.

The message from Ayman al-Zawahiri, the number two to Osama bin Laden, appeared to be aimed at persuading its own followers that the election of an African-American president whose middle name is Hussein does not really represent a break with the George Bush presidency.

"America has put on a new face, but its heart full of hate, mind drowning in greed, and spirit which spreads evil, murder, repression and despotism continue to be the same as always," Zawahari said.

He resorted to racial slurs to make his point, calling Obama a "house slave" in Arabic who just did the bidding of his white masters. Subtitles supplied by al-Qaida translated the term as "house negro".

The video, which ran more than 11 minutes, called Obama the "direct opposite of honourable black Americans" such as Malcolm X.

It showed footage of Malcolm X using the term "house negroes" to describe people who did the bidding of whites. There was also footage of Malcolm X kneeling in prayer at a mosque.

The pictures of Obama showed him in a skullcap at the Western Wall in Jerusalem. Zawahari accused Obama of betraying his father, who was born a Muslim, and of cultivating ties with Jewish organisations to further his political ambitions.

"You have reached the position of president, and a heavy legacy of failure and crimes awaits you. A failure in Iraq to which you have admitted, and a failure in Afghanistan to which the commanders of your army have admitted," the message said.

Zawahiri issued no specific threats, and US officials said there was no indication of a heightened threat against Obama or American interests.

The al-Qaida leader criticised Obama's plan to move more forces into Afghanistan. "Be aware that the dogs of Afghanistan have found the flesh of your soldiers to be delicious, so send thousands after thousands to them," he said.

Despite his argument that Obama did not represent a force for change, he said the elections showed that Americans now believed the policies of George Bush had failed.

The video referred to US air strikes on Afghanistan on November 5, which suggests it was produced after that date.

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Edmund King: Britain's auto industry is in dire need of help. But a bail-out is not the answer

21 min 22 sec ago
Edmund King: Britain's auto industry is in dire need of help. But a 1970s-style bail-out is not the answer

Karen Matthews sent Shannon away so she could leave partner, court told

1 hour 9 sec ago
Shannon Matthews' mother tells friends that she asked Michael Donovan to look after Shannon while she broke up with Craig Meehan

Cricket: Ravi Bopara to open for England against India in third ODI

1 hour 34 min ago

Ravi Bopara, the wild child of English cricket, will be given a chance to open the batting in the third ODI in Kanpur on Thursday as England gamble on his burning desire to succeed to pull back a 2-0 deficit in the seven-match series.

For England, this is a classic case of: "Go on then, get on with it, show us what you can do.'' Bopara has not been slow to express his frustration at his limited opportunity to fulfil himself. Now he has a chance to demonstrate his talent.

It is questionable whether the opener's role really suits him. He would doubtless be happier at No4. But he will grab his chance to exchange places with Matt Prior, who has played too conservatively in an opener's role where he was expected to strut. Prior will drop to No8 in a straight switch with Bopara. It is quite a demotion.

Bopara, in his own words, is a streetdog, and a streetdog of some talent. But his stats are nothing to write home about. After 30 ODIs, quite a lot of them characterised by a certain resentment at his bit-part role, he has tallied only 586 runs at an average of 28.66. His strike-rate, under 71, remains mediocre.

England considered promoting Andrew Flintoff to open, but the feeling is that he is playing well again at No5, where on a good day he is ideally positioned, as he was in the second ODI in Indore, to make punishing use of the batting power play. So it falls to Bopara to translate his frustration about a perceived lack of opportunity into an aggressive approach against the new ball. He is not about to block it.

Bopara was one of the successes of England's 2008 domestic season, and his performances for Essex won him the Cricket Writers' Club young player of the year award. But his desire to prove himself has encouraged a strong sense that he lacks maturity.

Under Kevin Pietersen's captaincy, his opportunity has not come immediately. Now it comes in spades. When you are up against it, rely on the energy of an angry man.

He has had some cause to be angry. England's failure to assemble a consistent and successful one-day side is illustrated by the team in which Bopara made his debut in Australia, in the dying days of Duncan Fletcher's coaching reign, less than two years ago: Joyce, Loye, Bell, Flintoff, Strauss, Dalrymple, Nixon, Bopara, Plunkett, Mahmood, Panesar.

No wonder he wonders what on earth has been going on.

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Lloyds TSB shareholders back HBOS merger

1 hour 45 min ago

Shareholders in Lloyds TSB have overwhelmingly backed the bank's merger with the ailing HBOS group after a stormy meeting which saw large institutions comprehensively out-vote smaller investors who were unhappy over the deal.

Nearly 96% of Lloyds TSB shareholders voted to endorse the deal, paving the way for its agreed merger with HBOS early next year.

But small shareholders - mostly elderly, some travelling from as far as Devon to Glasgow to make their points - assailed chairman Victor Blank with a series of questions about the controversial deal in which Lloyds will raise £5.5bn to boost its balance sheet and swallow its rival.

The event in the cavernous Scottish Exhibition and Conference Centre on the banks of the Clyde was supposed to last only two hours but overshot hugely as the executives were quizzed on the wisdom of the deal, whether Lloyds risked getting too big like Citigroup and even why shareholders had not been given free parking vouchers for the meeting.

Sitting in long ranks deep inside the centre with the walls shrouded in black drapes, most of the questioners from the 372 small investors were softly spoken, polite and precise - but all were deeply unhappy.

"This board will collectively be putting its head in a noose if this takeover proceeds," said one man bluntly, summing up the mood.

One loyalist shareholder, Michael Riding, suggested it was unwise for the board to "compromise" the bank's success by buying "a very large failed bank" - HBOS.

Tony Petersen, another ordinary shareholder, was just as quietly spoken, but far less polite. The company was heading for "potential state control" by buying a "terminally diseased bank" while the entire sector was in crisis.

Dwarfed by a backdrop illuminated in a subdued and sombre green light, Blank said Lloyds TSB and its advisers had invested "5,000 man hours" in due diligence work on the deal - a figure he repeatedly returned to, to reassure the meeting. "It was looked at, of course, extremely seriously."

Blank insisted the board was equally unhappy about the sharp fall in his bank's market value. But said: "We share some of your despair about it, but what we've seen are external circumstances and conditions the like of which none of us has ever seen before. It's little consolation we've gone down a little less than others."

Blank dismissed fears the bank was being part-nationalised, but Petersen was not to be deterred. In his fourth question, he drew applause by claiming the "deal was cooked up at a cocktail party", stating: "Most of us think that this deal stinks."

"It's difficult to know where to start on that question because what you say is just untrue," replied Blank. The "transaction", he said, had been discussed "over many years" by both banks. He had had earlier merger discussions with HBOS; so too had Eric Daniels, chief executive. The last discussions before the crisis erupted and the deal suddenly emerged, were in late July.

Brian Peart, chairman of the north east of England branch of the UK Shareholders Association, said he felt like a home-owner whose house was being burgled: "I feel at the moment I have robbers breaking in my house, demanding 40 to 60% of my worldly goods. It's no good complaining to the police because we're the government and we make the laws."

Shareholders had earlier been greeted by a small but friendly picket by HBOS staff unions and campaigning politicians unhappy at the planned merger.

Tavish Scott, the recently elected leader of the Scottish Liberal Democrats and the only party leader to oppose the merger, implied that Lloyds TSB shareholders were capitalising on the plight of HBOS: "The Labour government has to explain why losing thousands of banking jobs, branches across Scotland and competition is a price worth paying to force through this takeover."

Wendy Dunsmore, Unite's national officer for HBOS, said they were urging the banks to find a "more creative way" of saving money than pressing for compulsory job losses. Enforced cuts would damage staff confidence and morale, she warned.

Pressed in the meeting by a union official on the Lloyds TSB staff, Nancy Gilligan, Blank would not rule out compulsory job losses - "there will be inevitably some rationalisation of the combined workforce". Nor would he make any guarantees on "off-shoring" more jobs abroad. But he added both banks prided themselves on treating their staff well. "We will treat all employees with dignity and respect," he promised.

Blank had begun by urging the meeting to embrace the deal, "a landmark" in the 243-year history of Lloyds TSB and the British financial services industry. It gave them a "strategic opportunity to create the leading financial services group in the UK, to be a great British bank, and one which will be able to compete globally."

Merging Lloyds TSB with HBOS would create an "unrivalled" network of great brands - Lloyds TSB, Bank of Scotland, Halifax, Clerical Medical and Scottish Widows in particular. "The strategic rationale for the acquisition of HBOS is compelling," he said.

Given the £1.5bn annual savings in running costs expected, he hinted a no-compulsory redundancies deal was unlikely: "We do appreciate many of our employees may feel apprehensive at this time [but] this will create what we believe will be great opportunities for people in the group, although there will be some rationalisation within the workplace."

He tried to head-off questions about why Lloyds TSB had taken the Treasury's funds rather than take money from "public markets". The government's offer "provided certainty, was lower risk and was at lower cost".

Over the next year, the bank expected to buy back the government's preference shares - £1bn in Lloyds TSB and £4bn in HBOS - as a matter of urgency, and then resume paying dividends to shareholders.

"The bank fully recognises the importance of dividends of our shareholders. It's our priority to buy the preference shares in 2009, to ensure payments of dividends after that," he said. "We're delighted we've been able to provide a clear pathway towards dividend resumption."

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George Davies: 'I can smell a British woman'

3 hours 2 min ago

"I know women in this country ... I think I can smell a British woman," said George Davies, rather creepily, a few years ago.

Davies, who today announced his plans to step down as chairman of the Marks and Spencer brand Per Una, must have something seriously awry with his sense of smell. How else to explain the overpowering whiff of cheese that has permeated the Per Una section of M&S the past few years?

What started out in 2001 as an attempt to attract younger buyers is now a signifier of just how out of step with today's fashion-savvy consumer the entire M&S empire has become.

When Per Una first hit the high street, back in the days when Topshop was still cheap and Kate Moss was known only for her modelling, it was actually something of a success. So much so that Davies sold the brand on to M&S just three years later for a cool £125 million. That's a lot of badly fitting trousers.

Often described as 'flamboyant', Davies has the kind of personal life that is always described as 'colourful' (he's currently divorcing his third wife) - it's just a shame, then, that his clothes are so offensively dull. Davies was also the retail brains behind Next and George at Asda. So when it comes to pushing middle market tat guaranteed to age the wearer twenty years, he's got form.

Davies has said he will finish at Per Una at the end of the year, though if I were M&S chief exec Stuart Rose I'd be wondering if he could be persuaded to clear his desk a touch sooner: fashion works months ahead so even if Davies leaves at the end of the week Per Una will still have an awful lot of dodgy clobber in the pipeline, and Rose will have to shift it.

Rose and Davies' relationship has always been tempestuous. The pair fell out spectacularly three years ago and Davies walked out. Rose later described the incident as a 'lovers' tiff' and has referred to Davies as high maintenance: "He's like an actor - unless you keep telling him how good he is he gets depressed," he said in an interview.

Rose is said to have been unhappy with the poor performance of Per Una, which seems a bit unfair given M&S as a whole recently reported a 34 per cent decline in half year pre-tax profits, but we can only assume seeing the range described recently by Guardian writer Laura Barnett as 'a hippyish nightmare of long, sludge-green skirts and crinkly, tomato-red evening tops' did little to help.

Of course, it's not all the affable Davies' fault. In 2006 his daughters Emma Traynor and Melanie Davies took over doing the day-to-day running of Per Una, so perhaps it's them we have to thank for all those mid calf length skirts and shapeless cardigans. Traynor left in 2007 and Davies Jr is following her dad, which presumably gives Rose a free hand to pick someone he wants, rather than a member of the family firm. Or he could take the easy way out and just get a celebrity to 'design' the range instead. I hear John Sergeant's free.

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Interactive: BNP membership by constituency

3 hours 3 min ago
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News quiz: Wacky Wednesday

3 hours 9 min ago
A midweek meander through quirky news stories

British hostages on hijacked supertanker Sirius Star named as Peter French and James Grady

3 hours 26 min ago

The British hostages on-board the Saudi supertanker hijacked by Somali pirates three days ago have been named as Peter French and James Grady.

The attack on the US-bound vessel carrying $100m (£67m) of oil took place 450-miles south-east of the Kenyan port of Mombasa. It is the largest vessel yet captured by pirates.

Today the families of crewmen French from County Durham and Grady from Strathclyde issued a statement saying they hope the pair "will be home safely very soon".

The tanker is currently anchored off the coast of Somalia.

The statement said the families of the two men "greatly appreciate the concern that has been expressed by people throughout the UK and beyond, about Peter and James."

The string of attacks by Somali pirates shows no sign of abating despite efforts from international naval forces.

Earlier today, the Indian navy said one of its warships had fought off an attack by a suspected pirate ship in the Gulf of Aden.

The attack last night was on the same day pirates hijacked a Thai boat and an Iranian bulk cargo carrier off Somalia's coast.

The INS Tabar, which is dedicated to fighting pirates, approached the suspect vessel and asked it to stop to be searched.

The Indian navy said the pirate ship appeared to be a "mother vessel" loaded with food, diesel and water, and had two speedboats in tow. Naval officers could see men roaming the ship's deck with rocket-propelled grenade launchers and guns.

The pirates opened fire, threatening to blow up the warship, but the INS Tabar retaliated, sparking explosions and a fire that destroyed the pirate vessel.

This is the third attack the INS Tabar has warded off since it began its anti-piracy mission in the Gulf of Aden at the start of the month.

Spokesmen for the International Maritime Bureau's piracy centre in Malaysia and the 5th Fleet in Bahrain said they had received no reports involving an Indian ship.

The Somalian prime minister, Nur Hassan Hussein, said naval patrols would not stop piracy and appealed for more help to tackle criminal networks with links beyond his Horn of Africa nation.

"We are very sorry this piracy problem is not limited only to Somalia but is affecting the whole region, is affecting the world," he told Reuters. "The warship operations alone will not be sufficient. Since there is a piracy network, it means an operational network which includes the sea, the land and also outside the country sometimes."

Somali pirates are being helped by Yemenis, and possibly Nigerians, analysts suspect.

Foreign leaders are gathering in Brussels today for a two-day Nato meeting, which is expected to address the piracy problem.

Pirate attacks off the Somali coast have surged 75% this year as bandits seeking million-dollar ransoms have pushed further out to sea in search of bigger prey among the 20,000 oil tankers, freighters and merchant vessels transiting the Gulf of Aden each year.

At least a dozen vessels and more than 250 international crew are being held hostage. Pirates have reaped £20m in ransom payments this year.

The latest attacks threaten one of the world's busiest shipping routes, which could push up the cost of goods and commodities around the world.

Yesterday, Somalis seized a Hong Kong-registered cargo ship carrying 36,000 tonnes of wheat to Iran.

The Delight, with 25 crew on board, was captured off Yemen in the seventh successful hijacking in the past 12 days. The US navy, whose patrols along Somalia's coast appear to be having little effect on the pirates, said the ship belonged to Iran's state shipping line.

A British tanker came under attack yesterday but the pirates were thwarted when the German frigate Karlsruhe launched a helicopter to intercept them. Pirates did manage to seize a Greek bulk carrier.

The Saudi foreign minister, Prince Saud al-Faisal, described the hijacking of the Sirius Star, which is carrying 2m barrels of oil, as an "outrageous act" and promised to support a European-led initiative to increase security off Africa's east coast.

"Piracy, like terrorism, is a disease which is against everybody, and everybody must address it together," he said.

The Somalian government - facing an Islamist insurgency and crippled by infighting - appears powerless to stop the pirate groups, which are said to be employing up to 3,000 gunmen.

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Video: World's oldest polar bear dies

3 hours 33 min ago
Debby, the world's oldest polar bear, has died aged 42, in a Winnipeg zoo in Canada

World's oldest polar bear dies at Canada zoo

3 hours 40 min ago
Wildlife experts mourn loss of Debby, 41, who lived at Winnipeg zoo for over 40 years

Flight attendant helps steer Heathrow flight to safety

3 hours 44 min ago

A flight attendant helped steer a Heathrow-bound passenger flight to safety after the co-pilot suffered a breakdown in mid-air, investigators have revealed.

The flight attendant was temporarily promoted to the cockpit after the captain of the Air Canada service ordered his colleague to be handcuffed and dragged from his seat.

The flight attendant, a qualified commercial pilot, came forward after the captain asked the 155 passengers and crew if there were any professional pilots onboard.

The unnamed attendant sat in the co-pilot's seat of the Boeing 767-333 jet as the Toronto to Heathrow service was diverted to Ireland's Shannon airport on January 28.

The report by the Irish Air Accident Investigation Unit (AAIU) said: "The commander requested that the flight attendant occupy the right-hand (first officer's) seat for the remainder of the flight to assist as necessary.

"The flight attendant provided useful assistance to the commander, who remarked in a statement to the investigation that she was 'not out of place' while occupying the right-hand seat."

The AAIU said the flight captain noted that his first officer was "quite harried" when he entered the cockpit before take-off.

Once the plane was in the air, the senior pilot became "increasingly concerned" with his colleague's behaviour, prompting him to order the co-pilot to rest ahead of arriving at Heathrow, where difficult weather conditions were expected to make it a difficult landing.

The break did not improve the first officer's behaviour and it soon deteriorated. "The first officer began conversation which was rambling and disjointed in nature and not at all in character," said the report.

It added that the pilot then became belligerent and uncooperative, "which convinced the commander he was now dealing with a crew member who was effectively incapacitated."

The report indicated that a struggle took place as the pilot was taken from the cockpit by cabin crew, with one crew member sustaining a wrist injury.

According to one passenger, whose testimony did not appear in the AAIU document yesterday, the pilot was yelling and "invoking God" as he was dragged from the cockpit.

The unnamed pilot was taken to a psychiatric unit and was flown home 11 days later. The Air Canada flight resumed its journey after the diversion and arrived eight hours late.

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Albanian court finds British paedophile guilty of sexual abuse

4 hours 3 min ago

A British paedophile who ran a Christian missionary orphanage for abandoned street children in Albania has been sentenced to 20 years in jail after being found guilty of sexually abusing children.

David Brown, 57, a charity worker from Edinburgh, opened the orphanage seven years ago, claiming to be receiving instructions from God. He was found guilty in Tirana's district court today of "sexual relations with minors".

When the Guardian recently interviewed him in prison, Brown denied ever abusing the boys at the "His Children" orphanage, a ramshackle and overcrowded home for Gypsy children in Tirana, Albania's capital.

"I came to Albania because I wanted to help the Albanian children," he said. "Everything that I set out to do has been violated. I was these children's father."

During his trial Brown accused two other British helpers at the home of committing the abuse. Dino Christodoulou, 45, a social therapy nurse from Blackburn in Lancashire, and Robin Arnold, 56, a salesman from Cromer in Norfolk were extradited to Albania in May and are being tried separately for their alleged role in the abuse.

Brown was arrested in May 2006, following a raid on the orphanage.
Sentencing him to the maximum sentence in a high security jail in Albania, the judge said he hoped the punishment would serve as a warning to other paedophiles. He ordered Brown to be expelled from Albania when he is released from prison, in 2028.

Before travelling to Albania, Brown provided bible lessons and camping holidays to boys in Scotland over two decades.

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