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Quest Means Business
Elections in Britain; Toyota Accused of Cover-Up
Aired April 06, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Gordon Brown fires Britain's election starting gun. Is the economy his trump card or his guilty secret?
Under pressure the euro takes a tumble, once again its concerns over Greece.
And Toyota accused of a cover up. Records fines in the cards for keeping problems hidden.
I'm Richard Quest, no secrets tonight, I mean business.
Good evening.
The posters are up, the manifestos have been polished. The British prime minister has called an election for May the 6th. And that gives voters one month to decide who they trust to put Great Britain's economy and recovery back on an even keel. No other issue will have a bigger issue and as big an influence on how they vote.
Tonight, on QUEST MEANS BUSINESS the British Business Secretary Peter Mandelson tells me that this election must not derail the recovery. And Vince Cable, the liberal Democrat spokesman on the economy says his party isn't scared to call for higher taxes for the better off. He says he won't be pulling any punches. It's not the backdrop that any government would want as it campaigns for election or re-election.
The U.K. has barely emerged from its worst recession in decades. Millions of people have lost their jobs and they are suffering from pay cuts. It puts the onus on the three main parties to convince voters they have the formula for a stable economic future. Economy, of course, is issue number one. The surveys are telling us it could be Britain's closest election results in a generation. The opposition Conservative Party is leading every opinion poll.
But the gap is narrowing. The poll of polls seems to suggest anywhere between 4 to 7 percent. Some polls put in the Tory gaining a lead of up to 10 percent. Fears of a hung parliament, where no party wins a workable majority or an absolute majority are uppermost in investor's minds. A minority government the Prime Minister Gordon Brown kicked off his campaign with this economic message.
(BEGIN VIDEO CLIP)
GORDON BROWN, PRIME MINISTER OF BRITAIN: Over these last few months, this government, at every time has fought hard, facing the biggest world recession, to fight on behalf of hardworking families on middle and modest incomes. And over the next few weeks, I will go around the country, the length and breadth of our land, and I will take to people a very straightforward and clear message. Britain is on the road to recovery. And nothing we-
(END VIDEO CLIP)
QUEST: The British prime minister, there, Gordon Brown. Well, I caught up with a key player in his cabinet. The number two, the Business Sector Chief Peter Mandelson. Lord Mandelson had a similar message as he told me, on the economy.
(BEGIN VIDEO CLIP)
LORD PETER MANDELSON, BUSINESS SECTOR CHIEF: The recovery is fragile, and therefore it mustn't be imperiled. And the point that we are making is, if we want to our future prosperity, future growth and future jobs, we've got to make damn sure that we don't take risks with the recovery this year. That, in our view, is what the Conservative Party policies will do.
QUEST: Are you worried that as the election goes forward, that markets could show instability as a result of whichever way, a hung parliament, whatever may happen?
MANDELSON: My suspicion is that markets will hold their breath for the duration of this election campaign. And make a judgment about the outcome and the income in government, when it is elected, or re-elected, in our case. I think they will tend-tend to discount a lot of what they hear during the campaign itself. And then form a rather tougher judgment later on.
QUEST: Following your comments, at the weekend, concerning Bob Diamond of Barclays, and other comments you have made, are you pretty much writing off now votes from the investment community?
MANDELSON: But please don't mistake Bob Diamond of Barclays with people in banks generally, or in British business. He's not typical or representative of the people who have built up great businesses, who are great industrial leaders, who have a real commitment to long-termism in our economy, and building value, over time. That would be a great mistake for you to do.
QUEST: Finally, four weeks, of hard electioneering. Is it going to be difficult to keep the tone high?
(LAUGHTER)
MANDELSON: Oh, we've got to concentrate on some very big challenges and some very big issues facing our country. Of course, we've got to get through the remainder of the recession, and its aftermath and not do anything that would pull the rug from underneath the recovery.
But beyond that we've got to face in our country the challenge of creating future industries, growing our service sectors, commercializing on our technologies, building on our science base and our skills, in order to make and pay our way in a very tough world, during the course of this century. That is what I'll be focused on and that is what I hope others will be, too.
(END VIDEO CLIP)
QUEST: One of Britain's toughest politicians, Lord Peter Mandelson, the business secretary. Barely had the election been called, of course, then the party leaders were out into the country itself. The Conservative leader David Cameron has been hitting home hard and hitting the campaign trail. Tonight, he is in the northern English city of Leeds, where he's giving one of his first major campaign rallies. These are live pictures from the leader of the Conservative Party. Let's listen in for 30 seconds or so.
(BEGIN LIVE FEED, IN PROGRESS)
DAVID CAMERON, CONSERVATIVE PARTY LEADER: We want a whole new approach to how we govern our country. We've had the biggest boom and bust in our economy and we need a whole new economic model. We have got deep problems in our society. And we need really big social change to mend that broken society. Not just asking what can the government do for me? But asking --
(END VIDEO CLIP)
QUEST: Now, we'll obviously hear much more from David Cameron in the weeks ahead. Today, when he announced and he launched his campaign, he said the real risk was another term of a Labour government.
(BEGIN VIDEO CLIP)
CAMERON: This election is about a very big choice. Do we want five more years of Gordon Brown, or do we want change with the Conservatives who have got the energy to really get this country moving. And we have the right approach on the economy, where Labour's job tax would kill the recovery. And we must cut the waste in order to stop it.
(END VIDEO CLIP)
QUEST: So, that is the Conservative leader. If you want an indication of what the markets are making of it all, look at the foreign exchanges. The pound sterling fell against the dollar on the day that campaigning began. The narrowing in the opinion polls increased concerns. It is all about a hung parliament and that is the main worry. Jim Boulden spent part of the trading day with BGC Partners.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN INT'L. CORRESPONDENT (voice over): It is lunchtime now on London's trading floors and shares here in the U.K. and around Europe continued to do very well, near 18-mohth highs. It is in the currency markets that we see the uncertainty ahead of this general election.
The election date was the worst kept secret in the U.K. Sterling did fall a full percent against the U.S. dollar. Veteran market watcher David Buik says he knows why.
DAVID BUIK, BGC PARTNERS: A hung parliament indicates that the United Kingdom is incapable of making positive, bold decisions in dealing with the problem. And it would just manifest a high degree of uncertainty. The Conservatives, if they win, sterling for the time being, would go north. There would be more of a correction than strength. But the fact remains is there is still that cumulous nimbus cloud of a massive, massive borrowing requirement.
UNIDENTIFIED MALE: (UNINTELLIGIBE SHOUTING ON THE TRADING FLOOR)
BUIK: What we really want to have rid of this month as quickly a we possibly can. Because the longer it goes on the more the uncertainty creeps in, the more the threat of perhaps our Triple A rating, in terms of credit, won't be there. I personally think it will be, but it doesn't help at all and of course it is absolutely, glory, glory days for the speculator.
We don't have a bad track record. We shouldn't be compared to Greece. That's not fair, because this is actually quite a buoyant economy in the fullest of terms. It is just the fact that the election really got in the way of reality. And because both parties have been slightly economical with the truth in terms of what cuts in public expenditure actually means, because it is a vote loser, that they have been talking in riddles.
BOULDEN: So, while some of the markets think there could be a clear winner in four weeks' time, if there is not, then the majority of the uncertainty will come after the election. Jim Boulden, CNN, London.
(END VIDEOTAPE)
QUEST: Jim will be back with us in a while, talking about the euro. In the fullness and openness of transparency I do need to point out, of course, David Buik, who is a good friend of this program, has written extensively and highly critically on the economic policies of the current government. But there, as you were able to hear, he's talking about the U.K. economy and sterling. We'll hear from him more in the weeks ahead.
Now, to the U.S. market, which is open and doing business.
(DESK BELL CHIMES)
And where stocks are little changed from Monday. Down just 10 points. It is a bit-they were sitting tight, the Dow had risen for six of the last seven sessions. But of course, what you and I are both looking at is to see when it hits 11,000. So, we're still somewhere off. It does seem as if 11,000 is going to be one of those so-called psychologically important barriers.
One other note, the yield and the 10-year Treasury has surged to 4 percent. That, of course, will be of interest particularly when you think about future Federal Reserve interest rate policy. Those are the business news headlines. Now to the news agenda and Fionnuala is at the CNN News Desk.
(NEWSBREAK)
QUEST: When I return in just a second, a potentially deadly secret. The U.S. government says Toyota should be made to pay, not for building unsafe cars, but for keeping drivers in the dark.
(COMMERCIAL BREAK)
QUEST: Toyota maybe taught an expensive lesson, a $16-million lesson in transparency. The U.S. Department of Transportation is proposing to fine the Japanese car maker the maximum penalty in its power. It says that failing to tell the authorities about the sticky pedal problem, the defect for at least four months after it knew there was a problem. So, $16.5 million is the proposed fine that they are hoping to impose.
As Deborah Feyerick reports from New York, the government, the U.S. government says failure to report the problem wasn't an oversight it was a conscious policy.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (on camera): This is the maximum fine allowed, $16.4 million. That is more than 15 times any previous penalty against a carmaker. And the reason, of course, sticky gas pedals. Documents show that Toyota waited four months to notify the government about the problem. In issuing the fine, Transportation Secretary Ray LaHood made clear that Toyota should have warned the government with 5 days as is required. LaHood saying, quote, we now have proof that Toyota failed to live up to its legal obligations. Worse yet, they knowing hid a dangerous defect for months, from U.S. officials, and did not take action to protect millions of drivers and their families.
Now, as part of its investigation the National Highway Traffic Safety Administration, review internal company documents that showed the Japanese automaker knew about pedal problems as far back as September, but did not issue a recall until January. A former attorney for that agency told CNN there was a sense Toyota felt it had gotten away with something.
ALLAN KAM, FMR. NHTSA ATTORNEY: I would say their response was lethargic, at best, and at worst, sort of jerking the agency around. They seem to be cheering that they had-didn't have to conduct a recall that they had in some way snookered the agency into thinking that they didn't have to do anything-or didn't have to do as large a recall as they did.
FEYERICK: Toyota released a statement saying only, quote, "We have already taken a number of important steps to improve our communications with regulators and customers on safety related matters, as part of our strengthened to overall commitment to quality assurance, these include the appointment of a new chief quality officer for North America. And a greater role for the region in making safety related decisions.
Of course, $16 million is a drop in the bucket for a company with revenue that topped $200 billion last year. But the real price is expected to be lost business and ongoing federal investigations. Toyota has two weeks to decide whether to fight this penalty, the language used really does set the stage for more than 100 class action lawsuits filed against Toyota.
Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
QUEST: The fascinating thing about this $16.5 million fine is the discrepancy between this fine and precedent cases. If for example we look back at General Motors, the biggest fine was in 2004, where GM was fined that amount of money for not acting quickly enough on a windscreen issue. Now, of course, the windscreen issue-or the windscreen wiper issue-is very different from a sticky pedal, but it only in '04 that there was a $1 million fine. This is the reason, it was because there was a faulty windscreen wiper and they hadn't actually addressed that issue.
The law under which all of this is being done, at the moment, is known as the Tread Act of 2000. It was brought in after the recall with Ford and Firestone Tires. You'll remember, Firestone had an enormous problem with tires, with Ford-they-there were allegations of who knew what and when. But this act was brought in. Now, if Toyota's fine is not appealed and upheld on appeal, this will be come the largest fine of its kind. And as you can see, quite a sizable difference from the one back in 2004.
When we come back in just a moment, you might have thought that Greece and the euro was all past history. I'm afraid not. The euro is under pressure, and once again, it is the Mediterranean countries causing the problem.
(COMMERCIAL BREAK)
QUEST: European markets and how they traded, it was the first day back after a long weekend for the Easter holiday. It was the first day back, also, since they had reacted to the Friday's U.S. job report, which showed the best month of job creation in three years. Most European markets hit their highest levels in 18 months, commodities and energy stocks lead the way. Stock market investors also took the news of an impending U.K. election in their stride.
The same can't be said for the currencies. The pound fell against the dollar, it also fell against the euro. Now, the pound and dollar, was of course related to the U.K. currency. The pound euro perhaps had more to do with what was happening with the worries over the Greece debt problems which haven't gone away. Shares in Athens took a pasting. The latest sell of came amid speculation the Greek government wants to make changes to last month's EU agreement on emergency financial aid.
You remember that agreement, of course. Greece has denied the report that it is looking for changes. Jim Boulden is with me now.
Jim, I had really thought-
BOULDEN: We were finished.
QUEST: Well, at least for the time being.
BOULDEN: Yes. Until May, yes.
QUEST: Remember we had the emergency financing agreement, or whatever it was called, which set out the IMF and the Euro Zone-
BOULDEN: Yes.
QUEST: I thought that was it!
BOULDEN: Until May, and then we thought that when Greece has to sell more bonds we would see how it does in the market.
QUEST: And Greece still-in fairness to Greece they still haven't actually asked for any money?
BOULDEN: No, no, but that is not what happened. What happened was speculation and rumors, officials in Greece apparently told one news agency something that sparked off the rumors that they were going to renegotiate the IMF parts of this agreement. And that scared everybody, because they thought, oh, here we go. We are going to have to open everything up again.
QUEST: What has Greece said?
BOULDEN: Greece has come out very strongly and denied, not only denied that they were reopening that, but they are very angry that this happened because it is not just rumors when it happens in the markets, right? We saw what happened with Greek stock, down over 2 percent today, when we see the rest of the European markets high, 18-month highs, in a lot of places. Following what Wall Street is doing, the Greek market is separated. And just as importantly we saw that the spread on Greek bonds jumped over 7 percent. We're talking about the worst it has ever been in the 10-year history of the euro.
QUEST: All right. Let me throw a curve ball at you. As you Americans are-there is also this rumor about the amount of-or the interest rate that the Germans want to charge Greece as a penal rate, some 6.5 percent, I've seen numbers them being charged or being bandied about.
BOULDEN: If they were to go to the Euro Zone.
QUEST: If they were to go, if they were to go.
BOULDEN: Now that has always been the case. They were never going to make this a very easy decision for Greece to make. They always wanted to be a last resort to go to the Euro Zone and the IMF. So, it was always going to be a punitive rate. That is why I think some people in the market believe that Greece was now looking to renegotiate, because maybe things are going so poorly that they are going to have to go to the Euro Zone.
QUEST: Do you believe they are looking to renegotiate?
BOULDEN: They have said absolutely not and you know-
QUEST: That's all you can say.
BOULDEN: We have to take them a face value right now.
QUEST: Absolutely. Right. Do you think this is over for the moment?
BOULDEN: No.
QUEST: You sure?
BOULDEN: No we have $25 billion worth of bonds that have to sold in May. And if it is going to be 7 percent, that's too high.
QUEST: I'll buy you a holiday in Greece.
(LAUGHTER)
QUEST: Many thanks, Jim Boulden. Now, whilst interest rates are being held at exceptionally low levels, for an extended period of time, Australia-in the U.S. and Europe, anyway-Australia's central bank, once again raising its key interest rate by a .25 of a percentage point. The RBA says now the country's economy is no longer at risk of a nosedive, it is time to move back to more normal levels. Look at that, 4.25 percent.
October was Australia's first move in the G-20 to raise rates following the economic down turn, five times in the past six meetings. I don't normally try to sort of put that much into my voice, but it is quite extraordinary, the discrepancy between the way Australia's rates have risen and of course, for example, the Euro Zone and U.S. Australia's economy has weathered the global financial crisis, clearly as you can see, better than most. It is reflected in monetary policy. The tightening as other advanced economies hold the money taps wide open.
Central banks from Japan to the U.S. and Europe have all rates between 0 and 1 percent, as they grapple with the affects of the down turn. Just look at that, bear in mind as we look at that chart with Australia, it is not just the absolute rate. It is the fact that it has risen so sharply in such a short period of time.
A lot of people are making money trading currencies, but that is not the only way of making cash from cash. If we talk about currency it is not just speculators. Max Foster met the chief executive of Fortress Paper, who like most business people says the key is spotting a gap in the market.
(BEGIN VIDEOTAPE)
MAX FOSTER, CNN INT'L. CORRESPONDENT: Just explain how you sort of got into this? How did you end up in this business?
CHADWICK WASILENKOFF, CEO, FORTRESS PAPER: I'm a contrarian investor, I look at sectors first, anything that is out of favor and people are shying away from, so I invested in gold when it was $2.75 an ounce, oil and gas a $10 a barrel, uranium at $8 a pound. Right now the entire forestry sector is in general decline. A lot of mills closing down, people being laid off, so they're great value.
FOSTER: So, you invested in paper?
WASILENKOFF: Paper.
FOSTER: Which gets you onto notes?
WASILENKOFF: Exactly. Well, even when I was evaluating paper opportunities, typical photocopy paper, or newsprint, sells at $700 or $800 a ton, very little margin left by the time you buy the pulp. We sell bank notes for as much as $45,000 a ton, a lot of margin available. We just committed another $50 million. We are quadrupling our bank note capacity. We will now become one of the lowest cost producers in the world. We have a very attractive and growing product.
FOSTER: And then you build in the security features, and that is where the real value is, right?
WASILENKOFF: Exactly.
FOSTER: Let's go through some of those. This is one that you don't make. It is the $1 bill, the $50 bill, which people will recognize. For us it is just a note, what do you see when you look at that note?
WASILENKOFF: There are several level one security features that you'll find in most bank notes. First of all it is the touch and feel. Banknotes are made from cotton, not your traditional Kraft pulp, so a retailer, when they receive it, if it was the older, or photocopy type paper, they should recognize it even without looking at it.
FOSTER: OK.
WASILENKOFF: Some of the other features you'll find is a watermark, when you hold the bank note up to the light.
FOSTER: Sure that is in that area, right?
WASILENKOFF: You get that portrait image that i8s hidden in there and shows up, the Intaglio print, which is the raised or the textured printing that you find on banknotes. Again, these are all level one security features. Some of the other features you'll find are holograms, such as in euro.
FOSTER: yes, so this is the euro here. And this is pretty modern, though, isn't it? It is pretty high tech.
WASILENKOFF: It was high tech.
FOSTER: In its day.
WASILENKOFF: In it's day, exactly.
FOSTER: Yes, you have a watermark, so that is difficult to forge basically, because it is complicated.
WASILENKOFF: The problem with things like the hologram, they were great level one security features, very easy to recognize, but now you can go down to the local Dollar Store, buy wrapping paper with similar hologram images and stamp it and do a half decent job at counterfeiting it.
FOSTER: This is the cutting edge, isn't it? This is a note which isn't yet out. And let's just sort of illustrate how it works. It is a Swiss note, right?
WASILENKOFF: Correct.
FOSTER: And you designed and made this, and it is the cutting edge. And if I pull it over here, you can actually see there are windows within the note. Just explain why that is a security feature, because for me, with an untrained eye, that looks fake-able.
WASILENKOFF: Yes, a lot of the color photocopying and scanners and the high technology you can buy on eBay today, allows the counterfeiters to replicate a more simple note. So, most, high-level national banks are looking at ways to put a transparent window in the bank note. It was a must-have security feature for the next Bank of Canada. It is a must have for the euro two, or the next series of the euro, for the Swiss franc. We know the U.K. is looking at opportunities to put a window into the note.
Again, I just helps at the retail level, to quickly distinguish whether it is counterfeit or real.
FOSTER: This is a note which some people would suggest you don't need to forge. It is a one trillion dollar note, from the Reserve Bank of Zimbabwe. What is that work at the moment?
WASILENKOFF: Only a couple of pennies, in fact. The whole country obviously is losing confidence in its underlying currency and they are shifting away to the U.S. dollar, and the South African rand. But it is sort of what can happen with all these stimulus packages around the world, and all these printing presses are running wild. Inflation is a risk out there, a concern. But that helps our business.
FOSTER: That is great for you because it means more notes.
WASILENKOFF: Absolutely.
FOSTER: At what-what happened then, because everyone was expecting cash to disappear?
WASILENKOFF: Actually the opposite is happening. There is not a national bank or a country in the world where cash is declining.
FOSTER: Why do you think that is? What is the psychology behind that?
WASILENKOFF: People still like cash, whether you are in a taxi or a quick retail transaction at a coffee shop.
FOSTER: That security, right?
WASILENKOFF: Yes, absolutely, it is a trust in the bill. That is the most important thing. So, again, it just continues to drive our business.
FOSTER: You say you have worked in all these other businesses and you spotted these trends. What are you going to be putting your money into next time? Or you are not going to give that away at this point?
WASILENKOFF: We are looking at some other interesting opportunities. We find, in the forestry sector, there are assets that are wroth $100s of millions, completely under utilize and it is just a matter of shifting the product mix to higher value, higher margin types of businesses.
FOSTER: Give us an idea.
WASILENKOFF: Stay tuned.
(END VIDEOTAPE)
QUEST: All I can say is there were no free samples, and I'd have taken any of them.
Now, the date is set, it is time for the economic hard sell. With Britain's political parties in campaign mode, the liberal Dems spokesman tells me why he is the man for the job, just not in someone else's government.
(COMMERCIAL BREAK)
QUEST: Hello.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN.
Our top story, campaigning has begun in earnest in what may be Britain's tightest election for at least three decades. It's a race that will be decided probably on one issue -- the u -- the economy. And whoever wins is going to face a daunting task of stabilizing the recovery and at the same time, reining in Britain's huge budget deficit.
Vince Cable is the deputy leader and the economic spokesman for the Liberal Democrat Party, Britain's third national party.
He told me his economic plan is the only way forward. And he believes he has the track record to prove it.
(BEGIN VIDEOTAPE)
VINCE CABLE, DEPUTY LEADER, LIBERAL DEMOCRAT PARTY: Well, our message is that the Liberal Democrats were right about this crisis and that we're the only party that warned about the dangers of the buildup of personal debt and the housing bubble, the way the banking system was not properly regulated.
So in terms of analysis, we were correct.
Secondly, we're the only party that is spelling out in detail how you start to make the spending cuts which we're all going to have to face in order to get the budget deficit down. It's going to be a massive problem overhanging the next parliament. And the other two parties are relying on cuts in, quote, "waste" and "efficiency," which, you know, they're not specific about.
Thirdly, we've been very firm and very clear that the banking system has been let off the hook to go back to business as usual. They need to be very firmly told that they have to lend to small and medium sized companies.
QUEST: Right.
CABLE: And last, and not least, we have a program of tax, which is neutral in economic terms, that involves cutting taxes for people on low and middle incomes, financed by wealthy people who've done well out of the last boom.
So it's a -- a fairness agenda that is very important at a time of economic difficulty.
QUEST: Do you fear that the -- the message -- that your message -- I mean you -- you -- you say, of course, that you were warning about all of this before it took place. And most people accept that you were one of those people at the forefront in those early days and before. But -- but you may not get the credit and you may not get the votes.
CABLE: Well, I -- I've -- I don't want to labor too much what's happened in the past, but I think if people understand that it was the Liberal Democrats who had good judgment, then I think that is a factor that...
QUEST: Right.
CABLE: -- that people will weigh. But much more importantly is what you're going to do in the future. And I've already set out, in relation to the management of the deficit and our approach of fiscal responsibility, our approach to the banks, which is much more radical and forceful than that of either the Labor government or the Conservatives and our approach to fairness in taxation, which, again, is quite distinct and quite specific.
I think those are the things that people will vote on and people will like...
QUEST: Right.
CABLE: And when they hear the Liberal Democrat message, which they tend not to do...
QUEST: OK...
CABLE: -- in normal times, I think they will respond very positively.
QUEST: Will the financial world and the investment community, will they like your message?
I mean in the short time that you and I have been talking just now, you -- you've pretty much set out a fairly unfriendly agenda for either the wealthy or the banking community.
CABLE: Well, we don't want to pull our punches and we want to be clear and open and honest about what has to happen. I think from the point of view of the serious people in the financial community, what they want is certainty and clarity about what any of the major parties is going to do about the economy, in terms of budget deficit. That's the biggest fear that's hanging over the country.
And we've made a very clear commitment to financial stability, to dealing with the deficit, pointing out the -- some of the things that we think...
QUEST: Sure.
CABLE: -- government could cut. And we've -- we've made it very clear that whatever the outcome of the election, we want to see the parties working together, in what we call a fiscal stability committee...
QUEST: Right.
CABLE: -- to -- to -- to look at the different ways in which the deficit could be properly managed in the national interests. And I think from the serious people in the financial community, that is the key.
QUEST: In the event -- and you've been asked this a million times and I'm afraid this is a million and one -- if there is a -- a minority government or a hung parliament, are you willing and ready to serve as the chancellor, as a representative of your party, in that government as chancellor?
CABLE: You know, I feel (ph) -- the million and oneth answer is the same as the previous million. I'm working for a Liberal Democrat government. I'm -- I will serve in that as Nick Clegg's deputy and our shadow (ph) chancellor. That's what I'm working toward. I'm not interested in working in other people's governments.
(END VIDEO TAPE)
QUEST: The Liberal Treasury spokesman, Vince Cable.
Now, as this election unfolds and the campaign falls over the next month, here on QUEST MEANS BUSINESS, we're going to bring you the voices of some of Britain's top business community.
Tomorrow, Sir Martin Sorrell, the chief executive of the appetizing group, WPP. He'll be talking to me about the tactics the main parties are likely to use.
(BEGIN VIDEOTAPE)
MARTIN SORRELL, CHIEF EXECUTIVE, WPP: Which jobs in the world would you recruit somebody for who -- who hasn't got any experience?
I mean Blair and Brown came in with no experience.
QUEST: Right.
SORRELL: Obama comes in with no experience. They learn on the job. Cameron and Osborne are going to come in with no experience.
So, on the Labor side, you would argue we are the -- the party of experience. We know what needs to be done. We're going to take the tough -- the tough measures, but we're going to do them without getting us into further trouble. If you're on the Conservative side, what you say is it's time for a change. And if possible, you avoid getting drawn into detailed debate.
(END VIDEO TAPE)
QUEST: Martin is going to be one of my regular contributors throughout the campaign. He'll be taking a look at the issues affecting British business and what business thinks the rival parties would do for U.K. PLC.
And it's important at this point to emphasize, of course, that they will be looking at it through the prism and the lens of the boardroom.
You can join this election conversation at questmeansbusiness.
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There weren't any interest rate announcements in the U.S. today. But the markets are still keeping a watch. We'll tell you what the Fed minutes said and why they made it clear interest rates can remain low, but inflation is still a real worry, in a moment.
(COMMERCIAL BREAK)
QUEST: Spring has sprung for most of us, at least in large parts of Europe. But I suspect there are some of you in other areas that say what on Earth am I talking about?
Guillermo is at the World Weather Center tonight -- good evening.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Good evening.
What was the weekend like for you?
I -- I understand it was rainy on Saturday, though.
QUEST: Yes, listen, the -- the weekend is gone. Long live the week. It's looking nice today. Just leave -- don't touch anything. Leave everything as it is.
ARDUINO: Is it going to remain as it is, and that's the good news, especially for the south. You see this is the next two days. So focus on the south. You see this one area where we see it, rain showers going through. But in general, it's pretty nice.
I was checking out the latest observations here, because also I was worried about travel delays. We do not see much going on. We have some rain in Edinboro, Londonderry, in Sonbad (ph) and also into Belfast, then Noki (ph) and Blackport. That's about it.
So it looks worse on the radar. But no significant delays anywhere.
There's an area toward the south where we have some action taking place in Barcelona with the passing of a low pressure center and those winds may complicate things.
And then I see here -- follow my hand. That's where the rain is. There's a -- there are many airports here reporting the rain. And so things are not looking that bad. I think that there is a system that is moving out of Barcelona that has some potential for rain showers. And it's moving into Corsica and Sardinia. And that's where we may see some action taking place.
Apart from that, the north continues to be a little bit unstable here and then nice area in general terms for central parts of Europe.
So the transition is here. We're seeing even 22 in Madrid for Wednesday; London at 13 tomorrow. So I think the next five days in London, most of the day it's going to be nice and very few instances of precipitation.
Now, Istanbul, in that vicinity, we have some rain showers. Apart from that, the Aegean Sea, Greece, looking fine. Of course, we have to deal with this system over here, so we'll see some rain showers here and there.
Now, if our viewers are coming to the United States, you need to know that with a large volume of flights that we have in the U.S. -- in the United States and the severe storms that pop up now with daytime heating, we may see tornadic activity, we may see delays at airports now that temperatures have started to go up. And this is an area we're following closely right now because there is going to be a clash of two air masses and we may see severe storms, we may see the tornadoes and, therefore, some delays at the airports.
Chicago O'Hare actually is estimating some, because of weather. Dallas with some windy conditions. So that's about it.
And then all the way into California, conditions appear to be OK. Look at this. Look at this, how it explodes there.
You see in this area, in the vicinity of Iowa is where we see all the action taking place. And then it moves through the Great Lakes. That is something that we're going to see very commonly now these months. And you need to be aware of that if you come to the United States.
Also, this division is where I'm talking about -- the two air masses to the north and the west is cooler, to the south and the east is much warmer. Look at New York, 28 for tomorrow; 27 in Atlanta. It's -- it feels like summer.
There is one more thing. If you're coming to the States, especially the Eastern Seaboard,. You're going to see some significant levels of pollen now. So that's something that you should bear in mind.
And, finally, in Asia, where I see the action is taking place into Japan now, but we're dealing with winds into Hong Kong and Beijing and Taipei. That's an area of bad weather that continues to affect the region. And it has been holding on during -- in the area for a while, but it's finally going to clear out -- Richard.
QUEST: Interesting. Many thanks. I'll take your word on that.
Guillermo, we'll see you tomorrow.
ARDUINO: Good to see you.
QUEST: Many thanks.
Now, I've always argued that business news is actually real life drama. But even if I stop short of delivering the market updates in song - - and believe me, you're quite safe. I've no intention of doing that, if only to save my own job. Audiences in Broadway are about to find out if the collapse of Enron is a suitable subject for a musical stage production. "Enron: The Play" has made its debut there.
And Carter Evans has been seeking views on whether America is ready to revisit this recent past.
(BEGIN VIDEOTAPE)
(MUSIC)
CARTER EVANS, CNN CORRESPONDENT (voice-over): Turning dollars and cents into drama, the blue chips meet Broadway. But there's a twist in this modern-day tragedy.
(MUSIC)
EVANS: Yes, Enron is now entertainment.
UNIDENTIFIED MALE: When we tell you this story, you'll see it can never be exactly what happened. But we're going to put it together and sell it to you as the truth.
EVANS: The London production of "Enron: The Play" opened to rave reviews and even extended its run.
UNIDENTIFIED MALE: I believe in God. I believe in democracy. And I believe in the company.
EVANS: Now, Ken Lay and his cast of capitalist characters are preparing for their Broadway debut, in a sense, back at the scene of the crime.
LUCY PREBBLE, PLAYWRIGHT: I think America has to be ready to look at it, just as we do to in Britain. It's not really a matter of if, it's like now it -- it's time.
EVANS (on camera): But just because "Enron" was a huge success across the pond doesn't necessarily mean it's going to play well with audiences here in America. Enron still brings back a lot of bad memories. And here on Broadway, they may be singing a different tune.
SUSAN MARTIN, HOUSTON RESIDENT: I thought it was really surprising that it would be of interest up here.
EVANS (voice-over): Susan and Robert Martin live outside of Houston, Texas -- Enron territory. So imagine their surprise when, on their visit to New York, they saw this marquis on the Great White Way. She's intrigued and wants to see the play. But the couple knows people who lost everything because of Enron.
MARTIN: They're mad. They're still mad. They're very mad. They feel betrayed.
EVANS (on camera): A lot of people got hurt by the guy you're playing.
NORBERT LEO BUTZ, "JEFFREY SKILLING": Yes, I know.
EVANS (voice-over): Norbert Leo Butz is Jeff Skilling in the Broadway production. He made the mistake of wearing a shirt with the Enron logo in the streets of New York.
BUTZ: And a security guy came up to me and said, you'd better be careful wearing that t-shirt around. I don't think we -- we can't underestimate the fact that it hits very close to the bone for a lot of people.
EVANS: For now, Enron is banking on Broadway to turn this fiscal fiasco into a new revenue stream. If the audience packs the house to relive this true story of false prophets, it may not be curtains for Enron after all.
(on camera): Do you think people are ready to laugh at this yet, though?
GREGORY ITZIN, "KENNETH LAY": Yes, I think Americans are ready to laugh at almost anything right now. Absolutely.
EVANS (voice-over): Carter Evans, CNN, New York.
(END VIDEO TAPE)
QUEST: I do like that, people are ready to laugh about just about anything. Believe me, as we, in this country, get ready for a full week election campaign, we could probably do with a bit of humor before it will all be over.
We'll have an update for you on the New York markets in just a moment. The Dow is not even close to breaking through 11000 today. It raises the question of when it will, in just a moment.
(COMMERCIAL BREAK)
QUEST: Now, the U.S. markets -- I was showing you a little while ago that the Dow Jones is just basically down some 10 points or so.
Stephanie Elam is in New York and joins me now -- Stephanie, we have a moment or two more tonight so we can actually get into the various machinations of the markets.
But we do need to start with those Fed minutes which have just come out. And I thought it was particularly interesting -- well, I did -- I mean -- the -- the way the Fed is -- is really flagging up potential inflation worries in the future.
STEPHANIE ELAM, CNN CORRESPONDENT: Yes, that seems to be a lot of the focus, Richard, when you take a look at -- at some of the information that they gave here. You know, they take a look at the minutes that were released, you can see that they're -- they're really looking to give people a bit of an idea about what's going to happen in the future. You know, we -- we did see that investors want to see some sort of clear, decisive action from the Fed. But the Fed is saying that they're not planning on raising rates on that lending rate -- that key lending rate -- in the near future.
So in the minutes, the central bank says there's some cautions about raising rates too early, because if they do that, that could actually affect inflation and bring the markets back into a recessionary mode. They don't want to do that.
There was also some language in the statement about this extended period, as far as keeping those rates up that extended period and at historic lows for an extended period of time. There was actually one person who dissented from this vote because he said by wording it this way, it just makes people want to jump in there and say, so when are you going to do it, when are you going to do it?
And they don't want to play that game. So a lot of Fed watchers waiting to see if there's more of a realistic time frame on when this could come to an end -- Richard.
QUEST: Why is the market -- I was talking to Felicia Taylor the other day. We were talking about this and I got her views. I want yours now.
Why is the market finding it so difficult to break through 11000?
ELAM: I think it's really a psychological thing. You've got people...
QUEST: Oh...
ELAM: -- out there who might...
QUEST: Oh.
ELAM: -- but listen -- but listen -- but listen, Richard...
QUEST: No.
ELAM: You've got it inching up closer. And for whatever reason, it doesn't really mean anything, does it?
No. It doesn't really mean anything. But the closer it gets to it, people go, all right, does -- what does this mean if we break through?
Does this mean things are recovering too fast?
Does it mean that things are going too slowly here and the markets are outpacing the actual recovery that we're in?
So I think the closer we get to it, the longer it takes. It seemed to do a little dance there.
Also, on a day like today, up until we got these Fed minutes, there wasn't really any economic data today to really have an effect. So without that, there's nothing spurring it. It's not earnings season yet...
QUEST: All right
ELAM: -- even though we just wrapped up the first quarter. So that factors into it, too.
QUEST: You've -- you've fallen back on the old bromide of psychologically important barriers.
ELAM: I did not fall back. I just mentioned for some it may be. I pointed out the reasons, though, that the fact that we don't have, really, any economic data and earnings, that is not giving anyone a catalyst to make any big moves right now.
QUEST: Why do I always lose these arguments?
All right, many thanks, indeed.
Nice to see you.
(LAUGHTER)
QUEST: Nice to see you, woman.
ELAM: Good seeing you.
QUEST: We go round -- we go round three tomorrow.
Many thanks again, Stephanie Elam...
ELAM: Tomorrow.
QUEST: -- who is in New York.
Now, I need to update you on what happened to the European markets on Tuesday. We had the Easter holidays on Friday and Monday. And it was the first day back at trading following that very, very ebullient jobs report in the United States -- the best month in job creation for three years. So most markets in Europe held their highest levels in 18 months. Commodity and energy prices were higher, as well.
Stock market investors took the news of the U.K. election in stride. The currency is not the same. Look at that. The pound fell against the dollar. Cable (ph) at 152.33. The euro is at 133.66. The euro's problems have less to do with the pound and the elections and a great deal more to do with the worries -- worries about Greece and the economy.
Let's move along. It's one of the world's greatest natural treasures. Now it's being threatened again, this time from a Chinese ship that ran aground on the Great Barrier Reef.
Karen Berkman reports there's outrage in Australia over this incident.
(BEGIN VIDEOTAPE)
KAREN BERKMAN, CNN CORRESPONDENT (voice-over): The prime minister left Rockhampton early this morning to see for himself the Shen Neng and its precarious position on the Great Barrier Reef. What the prime minister saw was a freeze frame of impending disaster -- potentially the greatest catastrophe ever in the world heritage listed marine national park.
KEVIN RUDD, AUSTRALIAN PRIME MINISTER: From where I sit, it is outrageous that any vessel could find itself 12 kilometers off course, it seems, in the Great Barrier Reef.
BERKMAN: The ship is being stabilized. The white streaks around it are ground coral and sand, not oil, and the national oil spill plan has been activated.
RUDD: The practical challenge is to deal with this situation now. The practical challenge then is to bring to account those who are responsible.
BERKMAN: Greens leader Bob Brown made the journey out over Douglas Shoal late yesterday.
BOB BROWN, AUSTRALIAN GREENS LEADER: And I call on Prime Minister Rudd to institute an immediate royal commission into not just how this ship landed up in a protected area of the Great Barrier Reef, but how the situation has been allowed to get so far out of control.
BERKMAN: So far, less than four tons of oil has leaked from the ship. But there are another 950 tons on board. The complex task ahead is to remove the ship without further oil spills.
The Pacific Responder, a dedicated emergency response salvage vessel, is on its way from Kerns, having picked up special salvage equipment yesterday.
PATRICK QUIRK, MARITIME SAFETY QUEENSLAND: She will be a great asset to have in terms of having a vessel alongside the damaged vessel. She has pumps. She has specialized salvage equipment. And that will really enhance our ability to respond to this current emergency.
BERKMAN: Marine engineers and architects from Marine Safety, Queensland, are on board the ship and expect to have a better idea how to salvage it later today.
Karen Berkman, ABC News.
(END VIDEO TAPE)
QUEST: And anyone who has visited, of course, the Great Barrier Reef will certainly know the issues and worries and difficulties as that continues to potentially be an environmental disaster.
A reminder of how you can contact me over the next few weeks, certainly as we go through the U.K. election period. @richardquest -- we're deciding whether to bring back Twitters more often in the program with our questions of the day.
Since I've got the computer, why not invite you to join me on that @richardquest?
The Facebook page is questmeansbusiness.
And, of course, e-mail -- well, quest@cnn.com.
You can join in our debate because, after all, if I'm standing here talking to myself, it's not terribly exciting for either of us.
I'll be back with a Profitable Moment in just a moment.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
I love elections -- the whole messy business when politicians cease to be high and mighty and those politicians have to grub for our votes. It doesn't matter whether we call it the people's voice or the majesty of the process, there is something magical about it.
This election in Britain is of particular interest because of the fragile state of the economic recovery. And on this program tonight, you've heard the policies of all the major parties. Each party says they are the only ones that will ensure long-term sustainable growth and pay back the deficits on the way.
One thing I promise you, over the next four weeks, we won't bang on about it every night, but we will bring you the independent voices to help you understand what is promised. And even if you don't have any special interest in the U.K., this should be worthwhile. After all, whether you're in Athens or Amsterdam, Munich or Milan, the issues being raised by these politicians -- well, these issues are relevant to all.
This journalist is skeptical, but not cynical. So let the electioneering begin.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
Here are the news headlines.
END
