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Quest Means Business

New Projection Shows U.K. Prime Minister Losing Majority; U.K. Tourism Leaders Prepare for Brexit; Trump Poised to Pull Out of Paris Climate Deal; Tourism as a Campaign Issue in the U.K. General Election; Russian's Mission to Boost Private Enterprise in Outer Space. Aired 4-5p ET

Aired May 31, 2017 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:00] RICHARD QUEST, CNN ANCHOR: Closing bell ringing on Wall Street. The Dow Jones Industrials is off roughly 13 or 20-odd points. It's bobbing

around as it has during the course of the session. Hit the gavel. Trading comes to an end, the end of the trading day in New York. It is Wednesday.

It is May the 31st. And we are at the seaside.

Tonight, Labour promises and threatens to sweep away the Tory absolute majority if one poll is correct. We're in Western-super-Mare is he seaside

where we'll be talking issues of tourism, and discussing just how places like this will survive in the post-Brexit world.

Also, tonight, Donald Trump swinging against the tide when it comes to climate change. Sources say he's withdrawing from Paris.

I'm Richard Quest, live at the seaside in Western-super-Mare where of course I mean business.

Good evening from Western-super-Mare as Freddie Brexit and I continue our election coverage across England. Tonight, it was supposed to be a

Conservative cakewalk, as they said. Now the latest U.K. election polling suggests something far less certain is under way. Forget a landslide

victory that Prime Minister Theresa May was hoping for. A new projection says she may not even get a majority in Parliament. Yes, the suggestion of

YouGov is she could lose seats. Its released a projection of how many seats each party will get. And it shows the Conservatives losing seats

and, crucially, falling short of the 326 needed to form an absolute government.

It's a brand-new model with a wide margin of error. Other polls still show a comfortable Tory lead. It's enough that we need to give you a caveat.

However, look at what happened on the pound. The pound slid for a few hours. That doesn't look like much, but bearing had mind, the pound had

been getting stronger, and suddenly it went back into reverse. It recovered the losses because of course the volatility of the potential of

this poll. Stocks in the 100 typically enjoy a weaker pound. And the perversion of the market continues, the pound went down, the index went up

to a record high, the pound went back up, the index went down. What can you say about that?

The projection completely changes the narrative of this race. It raises the prospect of a hung Parliament, coalition governments, or even another

election. Theresa May was campaigning here in Somerset earlier, insisted these numbers did not matter.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: The only poll that matters is the one that's going to take place on the 8th of June. Then people will have a

choice as to who they want to see as leader, who they want to see as Prime Minister, taking the country forward into the future, me or Jeremy Corbyn.

I have the plan for the Brexit negotiations. I also have a plan to build a stronger and more prosperous Britain.

(END VIDEO CLIP)

QUEST: The prime minister had been blindsided by the leader of the opposition earlier when Jeremy Corbyn announced at the last minute he would

take part in a TV debate of party leaders. That debate has just finished. Corbyn had said he wouldn't take part unless Theresa May did. She did not

take part, she said she wasn't going to and she didn't. It was Home Secretary, Amber Rudd, filled in for Theresa May. The opposition leader

wasted little time criticizing her party, calling it out of touch.

(BEGIN VIDEO CLIP)

JEREMY CORBYN, BRITISH LABOUR PARTY LEADER: I would just say this, since Amber Rudd seems so confident that this is a country at ease with itself.

Have you been to a food bank? Have you seen people sleeping around our station?

Have you seen the level of poverty?

ANN RUDD, BRITISH HOME SECRETARY: Jeremy, I would like to answer your attack.

CORBYN: Because of your government's conscious decisions on benefits.

RUDD: I have been to the food bank.

(END VIDEO CLIP)

QUEST: So, we're here at the seaside. We've got the pier. And as you can see tonight, we've even brought with us the various party leaders. It all

makes for a fascinating occasion as we discovered when we went. We took them out onto the beach.

(BEGIN VIDEOTAPE)

QUEST: Since we brought Freddie Brexit to the English seaside, we thought we would bring the candidates too. Tim Farren for the Lib Dems, Jeremy

Corbyn for Labour, Theresa May for the Tories.

[16:05:00] Well obviously, the candidates couldn't come, but this was the next best thing, and it was perfect to gauge the reaction of people here in

Western-super-Mare. You're taking a picture with Mr. Corbyn.

UNIDENTIFIED MALE: Mr. Corbyn, absolutely, yes.

QUEST: A sign of approval, I think.

UNIDENTIFIED MALE: Definitely a sign of approval, yes, absolutely. Yes, I think a sign of hope as well for the country.

UNIDENTIFIED FEMALE: We're having a happy day.

UNIDENTIFIED FEMALE: I'll surprise people I'm taking a pot shot at them all to be honest.

QUEST: Really, you're throwing some sand.

UNIDENTIFIED FEMALE: Yes.

QUEST: Were you tempted?

UNIDENTIFIED FEMALE: Yes.

QUEST: Do you think it will home call?

UNIDENTIFIED MALE: I do. I certainly do.

QUEST: That would be a surprise, wouldn't it?

UNIDENTIFIED MALE: Yes, well the Labour manifesto looked and appealed to a lot of people. She's dropped a few gaffes, didn't she?

UNIDENTIFIED FEMALE: They're all much the same now, and there is not much to choose between them. And they did don't actually tell us the truth.

QUEST: The general election is a lot closer. What do you think?

UNIDENTIFIED MALE: Hopefully Labour. But I can't -- I think it will be hung. I think it'll be a draw, neck and neck. That's what I really think.

I mean, I'm Labour, but don't know. I'll just say they're neck and neck.

QUEST: Good news for Jeremy Corbyn. Less so for the Prime Minister Theresa May. And still a week to go as they saddle up for the final

furlong.

(END VIDEOTAPE)

QUEST: The three leaders are with us in spirit if not in reality. Now to Richard Ensor, "The Economist" deputy news editor. He joins me from

London. Richard, we know the polls have been tightening. And that trend is there. But do you put this YouGov poll as an outlier that we can't take

too seriously?

RICHARD ENSOR, DEPUTY NEWS EDITOR, THE ECONOMIST: Richard, I do. Nobody thought we would even be talking about an election being as close as it

seems to be right now. When Theresa May called this election a month ago, she was leading by 19 points. That lead on average has shrunk to 7. This

poll from YouGov, which shows Theresa May losing her majority. You must remember, it's an interpretation of a poll by YouGov that puts the

Conservatives up by 4 percent. This is an outlier from what the rest of the polls are saying. But what you need to do is you need to watch the

next poll and the one after that, because if it shows a continuation of this trend, then you'll see some worry, some concern, if not outright panic

in the Conservative party's headquarters.

QUEST: OK. Now, that's fair enough. But what is driving, what is driving this shift in the polls? I mean, was it to be expected? Was it Theresa

May's ham-fisted way in which she dealt with the manifesto? Or is there a new optimism or confidence, if you like, in Jeremy Corbyn and Labour?

ENSOR: It's difficult to say, Richard. As many people from Labour have been saying for many months when Jeremy Corbyn was lagging in the polls,

once the election began, the real fight would start and you would see a narrowing in the polls. We have seen that and indeed, Jeremy Corbyn has

outperformed some of the low expectations many had set for him.

Nevertheless, you must say that Theresa May seems to have made a spectacular miscalculation here by calling this election in the first

place. People seem to be tired of them, this is the third national vote in three years if you include the Brexit referendum. And I think also, people

have just seen a sense of complacency and arrogance on the Conservative Party, and not to mention the fact that the party's manifesto release was a

complete shambles as well.

QUEST: So, I always think in these situations, we always end up coming down to brass tax, as they say where I come from. It really comes to this.

Is it seriously likely that she will lose the election in terms of not being Prime Minister after next week?

ENSOR: Richard, if that were to happen, it would be a bigger upset than Brexit or Trump or anything on that scale. It would be a bigger error in

the polls than either of them. This poll, the only poll at the moment that shows this being -- that even gives this a chance is the YouGov one today.

And you've got to remember, this has a very large margin of error, which means they don't make this prediction with the same deal of certainty. And

you've also got to remember that historically, polls in Britain overestimate Labour. And you saw that in the 2015 election. They

predicted a Labour win, and they didn't get it.

QUEST: Good to see you. Thank you very much indeed. Richard Ensor joining us from London.

Tourism is a fast-growing sector in the United Kingdom. Nine percent of economic output. I mean, 10 percent of job. That's what the UN WGO agrees

is pretty much always where you see tourism, travel, the benefits of hospitality. And much of that could be at risk when the U.K. exits the EU.

[16:10:00] Here in Somerset where I am at the moment, absolutely glorious. The weather has been picture perfect today. I mean, goodness knows who

paid who to ensure that we had a great day on the beach. These are the attractions that lure visitors from Britain and abroad. You've got the

Grand Pier, which is behind me. The Grand Pier which is a fine new extremely beautiful structure. You've got the sand sculptures that we're

going to show you later in the program including the CNN sculpture. You've got Stonehenge up the road, a prehistoric monument, and was on President

Obama's bucket list.

Then you've got Glastonbury, the festival in a few weeks with radio head and Katy Perry and some of my producers who seem to love wrestling in the

mud. Then down the road you have Bath, for the authentic roman experience. Here's what the parties are saying when it comes to this.

Labour says it supports tourism as the heart of the government and would reinstate the ministerial group on tourism and make sure it's streamlined

with other departments. The word "tourism" does not appear in the Tory manifesto. The government did announce an action plan in August which

included $50 million to improve destinations, encourage young apprentices and improve the U.K.'s digital skills, although what that's got to do with

tourism is not entirely or immediately clear. John Turner is with me. He is the chief executive of the Somerset Tourism Association. Glad to see

you, sir.

JOHN TURNER, CEO, SOMERSET TOURISM ASSOCIATION: Good to see you too, welcome to Somerset.

QUEST: Welcome to Somerset, delightful. What do you want from one of those three behind you? I'm sure you're not going to take side. What do

you want?

TURNER: What I want really is for all three parties to actually start really recognizing tourism as a major industrial contributor to the U.K.

economy.

QUEST: I've been covering tourism through CNN business traveler for 15, 20 years. I can tell you, government pays lip service to tourism around the

world but they all take it for granted.

TURNER: I think the understand it. Generally, understand it and it's worth $103 billion to the U.K. economy. To us here in Somerset, 1.3

billion. It's the sixth largest GDP driver. We're in North Somerset now, with about 500 million pounds is generated annually.

QUEST: So, how worried are you? Let's say the pound goes down. That brings more British tourists in, and there were a lot here today, it was a

glorious day. It would also encourage foreigners to come in.

TURNER: Absolutely.

QUEST: Who are you attracting?

TURNER: We are attracting the Americans in particular, they're coming over in droves at the moment. The very weak pound, which is weakening by the

day at the moment. The Chinese, the Japanese, huge South Asian influx coming in, especially to Bath, which is 25 miles up the road. So yes, it's

a great opportunity for us in terms of international tourism, which is worth about 70 million.

QUEST: Now look, the pier has been rebuilt, and hopefully we'll hear from the cofounder later in the program. But we do also sort of think of an

English holiday, maybe because I'm English, you would think it was a second best to going to Spain or going overseas. How can you change that image?

TURNER: I think "The Times" put it succinctly six months ago when they said, we can see the decline in other industries within the U.K., but the

one thing the U.K. has more than anything else is the ability to tell stories. And what we need to do is to bring those stories of our history

and heritage to life, which we're doing, and it's attracting international businesses completely.

QUEST: Are you worried about how the polls are showing the selection? Let me ask you, as a citizen, never mind in your official role, I won't ask you

how you'll vote, but three votes in three years. A general election, a referendum, and now another general election. Fatigue.

TURNER: Yes, and I'm really worried about the instability in the markets it's creating and the instability in the international markets that Britain

has in terms of this juxtaposition, this veering from one to the other. It's not good. And at some point, we need to settle down and deal with

Brexit.

QUEST: Good to see you, sir. Thank you so much for doing this. And thank you to all your people who have made me very welcome here.

TURNER: Thank you. Everybody is welcome to Somerset.

QUEST: They even allowed us to park Freddie Brexit right over there. And let me tell you, it took some arranging to get that sorted out. Thank you

very much indeed.

As we continue tonight, during the election campaign last year, Donald Trump promised to cancel the Paris Climate Accord. Now apparently, it's

decision time. We'll have that story after the break, as we show you the sun setting over glorious Somerset and the Grand Pier.

[16:15:00] (COMMERCIAL BREAK)

QUEST: The Wurlitzer organ at the seaside. And Freddie Brexit is likely having a wonderful time on his day out, assuming the oil leak doesn't last

too long. And of course, fish and chips can be seen on the sea front. It's a wonderful day at the seaside.

The climate change and the climate countries and the issues related to climate change. Very much of course, those suffered by people at the

seaside. Donald Trump is poised to pull out the United States out of the Paris Climate Agreement, according to two senior officials who are familiar

with the president's thinking. The president is expected to announce the decision in the coming days. If he does quit Paris, the U.S. will be at

odds with pretty much every other country in the world. We're only one of three nations not signed up, and that includes Syria.

Donald Trump's due to have talks with the Secretary of State, in the former Exxon chief exec, Rex Tillerson. Now they both support, at least Rex

Tillerson supports Paris. And staying with energy, from Exxon and Chevron, Silicon Valley companies, business leaders, they've all pleaded with the

president to stay with Paris. Some major brands are standing by the deal. Microsoft, Google, Apple, Adidas, Starbucks, Nike and L'Oreal. Elon Musk

of course, from Tesla says he'll leave the business council, Trump's business council if the U.S. abandons Paris. The Tesla founder said in a

tweet, "I don't know which way Paris will go, but I've done all I can to advise directly to the President of the United States through others in

White House and via councils that we remain."

Nigel Topping joins me from Exeter, the chief executive of We Mean Business, a coalition of companies committed to climate action. Nigel, if

the U.S. goes, and we don't know, and he'll make his own decision, no one can say which way it will go, but if they do go, the deal continues without

the U.S., which of course is 24 percent of carbon emissions.

NIGEL TOPPING, CEO, WE MEAN BUSINESS: Yes, the deal continues. And action will continue, because there's huge support, as you said, from the world's

largest businesses across the spectrum for action. All the other companies have recommitted. And we're seeing a lot of leadership from cities, from

mayors, and from the investment community. The deal will go. The question is what will the impact of Trump's policies be on American jobs and

American competitiveness.

QUEST: Now, what can the rest of the world do? I mean, I'm pretty certain that the weekend G7, just about every leader made it clear, and in fact, we

can see the disagreement by virtue of the fact that Trump didn't sign that part of the communique. So, I'm not sure whether pushing harder makes it

more difficult.

[16:20:11] TOPPING: Well, as you say, we don't know which way will go. And he clearly has some in his inner circle, like Rex Tillerson and Gary

Cohn, advising him to stay and others suggesting that he pulls out. I think that all the evidence that we have is that the rest of the world will

carry on and perhaps even double down. We've seen President Xi from China -- I'm going to dabble for the first time this year and presenting himself

as a champion of free trade and global competition. We already know that both the Indian and the Chinese are more than on track to fulfill the

commitments they made in Paris. So, with all of that business commitment around the world as well as other countries and local governments, I think

progress will continue. The question really is what will happen to American competitiveness.

QUEST: The issue of course -- OK, American competitiveness. Arguably the president says, and he has a point of view, and it is a point of view that

is also borne out by his director of the EPA and others in the administration, who basically say that, you know, you can have climate --

first of all, you can have environmental protections without the penalty and the entire structure of this climate agreement.

TOPPING: Well, you can have -- I think the comment I would make is you can have environmental protection and economic growth. I don't think anyone

disputes that. The question is whether you get that environmental protection and economic growth by trying to roll back standards and

reintroducing growth in coal and rolling back efficiency standards on cars. It's a question of what kind of economic growth you want and what kind of

other issues in terms of the health effects in our cities from burning fossil fuels as well.

QUEST: Nigel, good to see you, thank you for joining me this evening. Brian Deese is with me tonight, former senior adviser to President Obama,

senior fellow at Harvard Kennedy School in Portland in Maine. Brian, I'm at the seaside here where of course climate change is very much an issue.

But the president doesn't seem to be on the same page as anybody else except those who support him. How serious is this rupture between the

U.S., the rest of the world, over Paris?

BRIAN DEESE, FMR. SENIOR ADVISOR TO PRESIDENT OBAMA (via skype): Well, what's striking is the degree of unanimity of this issue outside of the

small pocket within this administration inside the United States. I was part of this process in negotiating the agreement. And outside of the

U.S., the world is moving on from this debate. That's true in capitals and it's true in boardrooms across the world. So, I think that you do have a

big rift between companies and countries all over the world that are saying, we're moving forward, clean energy is the future, and we want to

position ourselves to win in the economic race for clean energy, and the Trump administration --

QUEST: Hang on. Let me jump in here, if I may, forgive me, sir, we have a delay between me here and yourself. Look, Donald Trump says you can do

both and not only that, he says Paris will disadvantage the U.S. economy and his business and his job is to create jobs by putting America first.

Now, that is a campaign pledge he got elected upon.

TOPPING: Yes, but look, that argument is stale and it's out of date. This whole idea that you have to choose between environmental protection and

economic growth might have been true ten or 15 years ago. But if you just look over the last decade, the United States reduced its emissions more

than any other country on the planet and it had stronger economic growth than any other major economy. And so, we can reduce emissions and increase

growth. In fact, increasingly, moving to clean energy is one of the ways to grow jobs. It's one of the fastest growing parts of our labor force

here.

QUEST: But this was an argument in the campaign. And I hear what you say. But he was quite clear during the campaign that withdrawing from Paris was

one of the policies he was considering. And he got elected. So, I mean, methinks there's a lot of noise and a lot of countries protesting, but

Donald Trump is merely doing that which he promised to do.

[16:25:00] Somehow, I don't think it was my probing questions that finally got to Brian Deese, much more like it was the Skype line collapsed

somewhere between here and there. We apologize for that, Brian, but thank you for joining us.

Now, shares in solar companies fell off the back of the news. The Dow slipped for a third straight day. It was 21 points lower. Paul La Monica

is in New York. The issues and the movement of this market, we had the pound that was wobbling because of the polls. You've got the New York

market that is -- how would you best describe it? Disgruntled?

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: I'm not even sure I'd go so far as to say disgruntled, Richard. It was a mild selloff that almost

dissipated by the end of the day. We essentially broke even. I think this is a market that continues to shrug at all the political craziness in

Washington, D.C. and right now, I think a lot of investors are waiting for the key jobs report coming out on Friday, that's probably the next major

market moving event. What's that going to move for the Trump stimulus, for the Fed? A lot of variables there.

QUEST: ExxonMobil, and we look at the climate situation, the climate Paris agreement, fascinating that so many of these oil companies are in favor of

Paris, and indeed most corporations who would be affected have made plans.

LA MONICA: Yes, I think that as you pointed out, President Trump did campaign on a promise that he probably would pull out of the Paris

agreement if elected, so this in and of itself is not a huge surprise. I think many oil investors do realize that being part of the Paris accords

was positive for the industry, and that might be one of the reasons why Exxon, Chevron, their stocks didn't go down a lot but they didn't go up

today. It wasn't a case where solar stocks plunged and big oil rallied. Big oil fell as well.

QUEST: Good to see you, Paul. Paul La Monica joining us from New York with that.

European stocks, it was a very mixed ending in Europe. The FTSE closed largely, as I was explaining earlier, sterling dipped briefly. The Dax had

one of its best days, one of the best performers, it edged up, ending up a tenth of a percent. A weaker pound and holidays to Europe have become much

more expensive for Britain.

We are here, as you can clearly see it's nighttime now, but the fish and chip shops are starting to open. The Grand Pier is getting ready. We have

got the leaders sort of with us on the sea front. We'll have tourism and sand castles as our delightful holiday by the beach with Freddie Brexit

continues.

[16:30:00] (COMMERCIAL BREAK)

QUEST: I'm Richard Quest in Weston-super-Mare by the seaside, more "QUEST MEANS BUSINESS" in just a moment. The political sands are shifting below

Britain's feet. We'll examine the foundations of the U.K. tourism industry. And the political winds of change will bring stardust for

Russia. We're inside the mission to launch private industry to the stars. As we continue tonight, this is CNN, and on this network, the news always

comes first.

A short time ago the White House press secretary wouldn't say whether the president has made a decision on the Paris climate agreement. However, two

senior U.S. officials are telling us that Donald Trump is expected to withdraw from the deal. If true, it would be a major break from

international partners in the fight to curb global warming.

President Trump may be rethinking former President Obama's policies on easing relations with Cuba. An official involved with review of those

policies says the president may demand that U.S. fugitives being given asylum in Cuba be extradited.

According to an unnamed source, the fired FBI Director James Comey plans to testify publicly about his confrontations with Mr. Trump. And that could

happen as early as next week. He's expected to confirm the bombshell accusations that president Trump pressured him to end the investigation

into the campaign's ties to Russia.

The Russian navy says it launched four cruise missiles from the eastern Mediterranean. They hit ISIS targets in Palmyra, Syria. The targets are

described as shelters housing ISIS troops. At least 90 were killed and hundreds wounded after a massive explosion in Kabul. Authorities say it

was a suicide attack. Ian Lee reports.

IAN LEE, CNN CORRESPONDENT: Blaring sirens and a towering plume of black smoke. These are the sights and sounds of Wednesday morning rush hour in

Kabul. Scores of people killed after a truck bomb ripped through the city's diplomatic quarter. Among the dead, an Afghan BBC driver taking

journalists to work and a security officer involved in the protection of the German embassy. The first few days of the Islamic holy month of

Ramadan replaced by carnage and chaos on the streets and overwhelmed hospitals. The blast, one of the worst attacks to hit the country in

years, was felt blocks away.

(BEGIN VIDEO CLIP)

VICTIM OF AFGHAN BOMBING, Translator: I heard a very loud bang. Then I don't remember what happened next. The waves of the explosion were so

powerful, you could see a lot of people in the hospital wounded by shattered windows and collapsed walls.

(END VIDEO CLIP)

LEE: 16 years after the U.S.-led invasion of Afghanistan, with deteriorating security and gains by both the Taliban and is, Kabul seems

increasingly unstable. The Taliban, which controls large chunks of the country, denies any involvement in the deadly blast. ISIS is known for

carrying out increasingly deadly attacks and is silent on this bombing. The vast majority killed in such attacks, NATO currently assessing a

request for more troops, while U.S. President Donald Trump weighs a pentagon plan to send up to 5,000 additional soldiers and increase air

strikes against Taliban and is targets. Ian Lee, CNN.

QUEST: The British Home Secretary Amber Rudd says the Conservative party will reduce the number of immigrants coming into the United Kingdom if they

are reelected next week. Speaking just a few moments ago at the televised leaders debate, Amber Rudd standing in for the prime minister who did not

take part in the debate, said that the United Kingdom must be in control of its borders.

(BEGIN VIDEO CLIP)

AMBER RUDD, BRITISH HOME SECRETARY: We have to make sure we have an immigration policy that we can control. We have said, the conservative

party and the government, that we will continue to reduce those numbers. And as we leave the European Union, we will have more chance to do that and

to be able to decide who comes to this country. But be in no doubt, we will always have an immigration policy that although it continues to

reduce, will attract the brightest and the best.

(END VIDEO CLIP)

QUEST: Now, one former visitor is very welcome. Tourists who are a significant contributor to the U.K. economy. Brexit will impact that

uncertainty. Because think about it, two-thirds of tourists to the U.K. come from the European Union. EU visitors, crossing the channel, coming to

the U.K. two years ago. France sent nearly 2 million, 1.9. Germany, 1.4. Italy, 155,000. Spain, 680,000. Remember, Britain sends about 2 million

in the other direction. Netherlands, similar sort of number. EU nationals spent around 12 billion in the United Kingdom that year. Now of course it

goes both ways. 25 billion was spent by U.K. travelers in the EU over the course of the year. With the summer holidays fast approaching, classic

seaside resorts like this are ready to welcome many visitors. Particularly to places like that. Look at it, it was rebuilt a couple of years ago

after it burned down in a fire. It's the Grand Pier. Whether it's Blackpool, Brighton, or here in Weston-super-Mare, the pier is a totem of

the British seaside. Michelle Michael is the owner of Grand Pier and told me she is upbeat for the summer season.

(BEGIN VIDEOTAPE)

[00:35:00] MICHELLE MICHAEL, OWNER OF GRAND PIER: I think tourism, we're in quite a good situation. If our pound is weakened, we attract more

tourists. If our pound is weakened, more of our local visitors stay and play in our region. So, for me, from a touristic perspective, I don't

believe it will have too much of an effect.

QUEST: At the moment are you managing to hold your own here?

MICHAEL: Yes, we are.

QUEST: It can't be easy.

MICHAEL: It's not easy. You have to be passionate about what you do. And you have to enjoy it. And I think we're in a good position.

QUEST: So, talk of the English seaside being over is -- you know, talk of its death is exaggerated?

MICHAEL: I believe so. I believe so.

QUEST: What have you got planned for next year with the pier?

MICHAEL: What we would like is some certainty. We would like the election to be done so people don't feel so nervous. We would like to see some

prices increase with our government so that we get parity. We would like reduction of v v.a.t. like our partners in Europe. If we get some of

these things, we'll be able to invest, arcade operators and other touristic businesses around the U.K., it will make Britain great again at the

seaside.

(END VIDEOTAPE)

QUEST: The owner, current owner of the magnificent Grand Pier here in Weston-super-Mare. Freddie Brexit, by the way, is thoroughly enjoying

himself as you can see. We've brought him to the seaside and he's having a grand old day. Except a bit of a few little problems. He's sort of had a

halfway break from our great British road trip. He was in need of a tune- up earlier. Our producers took him for a little tender loving care, where he had a couple of problems. It was only a minor little problem.

Something to do with the seatbelt, one of those optional extras not on every vehicle.

As we continue from the final frontier of Brexit and beyond, European Space Agency says Europe could hold the key to the stars. Coming up, QUEST MEANS

BUSINESS in Weston-super-Mare tonight.

[16:40:00] (COMMERCIAL BREAK)

QUEST: There is nothing better than the British seaside in the middle of the summer, especially as the evening draws on and people start to get

drunk at the local pubs.

Brexit is threatening to upset the cosmos, speaking at a U.K. space conference in Manchester, the head of the European Space Agency says it is

a tremendous problem. And there's a warning, British companies may need to set up European subsidiaries if they want to access billions of dollars'

worth of EU funding. That's according to "The Financial Times." The U.K. is set to remain a partner until 2019 when Brexit takes place. The space

industry is worth up to $400 billion. Russia is looking at private enterprise when it comes to reaching the stars.

(BEGIN VIDEOTAPE)

DIANA MAGNAY, CNN CORRESPONDENT: Blasting humans into orbit. What Russia does better than anyone. Since the grounding of NASA's space shuttle

program in 2011, Russia's Soyuz, unparalleled safety-wise, has been the workhorse of space travel. The international space station is the symbol

of cooperation in space. It's Russia's Soyuz spacecraft which ferries astronauts and cosmonauts to the station. But snapping at the heels of the

Russia's space agency are a host of private businesses looking to commercialize space travel. Perhaps the future of international

cooperation in space is not necessarily between states anymore but between private businesses and the national space agencies.

UNIDENTIFIED MALE: Three, two, one, zero, liftoff.

MAGNAY: In the U.S., Elon Musk's SpaceX and Jeff Bezos' Blue Origin are leading the commercial space race, benefiting from the read money from

capital culture and federal support. In Russia, the dominance of the national space agency is changing slowly.

ALIYA PROKOFEVA, PARTNER, GALAKTIKA: My focus is more on return to base of the launch vehicle of the rocket now. My focus is more on the engine.

MAGNAY: Aliya Prokofeva is a partner in a private aerospace group Galaktika. Her goal is to create an orbital city in the next 12 years,

building on Russia's technical prowess.

MAGNAY: Would you describe yourself as the Russian Elon Musk?

PROKOFEVA: I'm not the Russian Elon Musk, because we have different approaches and different visions. I can describe myself as a Russian

visionary, maybe more of a Karyov, the person who decided to create new things which could change the world, make it better. That's my ambition

and my mission.

MAGNAY: Sergei Karyov was the strategist behind the soviet space program, the man who launched the first ever cosmonaut into space.

[16:45:00] Roscosmos has a wealth of problems of its own, a 30 percent slash to its budget just as it tries to push through a major restructuring

to battle corruption and a series of failed launches.

ANDREY LONIN, SPACE EXPERT, (through translation): We've got problems here. Strategy to develop private developers must be created. But it's

not the agency's job to do that. They are responsible for manufacturing things. It's the government's job to have a national strategy, and there

is none.

PROKOFEVA: For Roscosmos now it's quite challenging because of course they need to restructure, restructure their minds and restructure their

approach. But they started to move, which is good.

MAGNAY: Standing on the shoulders of giants to put some entrepreneurial energy into Russia's struggling national space program. Diana Magnay, CNN,

Moscow.

(END VIDEOTAPE)

QUEST: Nothing nicer than a warm day by the seaside and a chance to build some sandcastles. When we come back, we'll show you sand sculptures of an

absolutely monumental kind, including this extraordinary creation. How you can create CNN in sand in one easy lesson. Or something like that. We're

at the seaside and enjoying every moment of it.

(COMMERCIAL BREAK)

QUEST: Isn't it lovely? You couldn't have asked for better weather today, it's hot on the sea front. We thoroughly enjoyed the best of western super

mare as we discussed politics and everybody had a view of one description or another. Now, you know that the country is obsessed with an election

when even the sand sculptures start getting political. When I say sand sculptures, I'm not talking about building a little sand castle on the

beach, although today there was plenty of that going on. Oh, no. Weston- super-Mare has an annual sand sculptures festival. This year's theme is topsy to your topsy-turvy. The political sands are shifting, and these

sculptures are absolutely vast. I got a lesson in the fine art of sand sculptures.

(BEGIN VIDEOTAPE)

QUEST: Number one. Sand looks like sand to me.

UNIDENTIFIED SAND SCULPTOR: Sand from Weston-super-Mare beach comes out of the river into the bay, it's got a bit of a muddy structure. That's why

it's called Weston-super-mud. It's perfect for sand sculptures.

QUEST: What's holding the sand up?

[16:50:00] UNIDENTIFIED SAND SCULPTOR: We compact the sand into wooden frames. That creates a hard block of sand which we can then sculpt.

There's no frame whatever. It's just sand and water.

QUEST: My sand sculptures fall apart. Why don't these?

UNIDENTIFIED SAND SCULPTOR: Because of the structure of the sand, it lasts a lot longer.

QUEST: You're doing something that holds it together.

UNIDENTIFIED SAND SCULPTOR: Sometimes a sculpture collapses, but we make a new one.

QUEST: What about rain, why doesn't it collapse with the rain?

UNIDENTIFIED SAND SCULPTOR: Sometimes the sculptures do collapse or a nose falls off. We just fix it.

QUEST: How long did it take to build something like this?

UNIDENTIFIED SAND SCULPTOR: About a week of sculpting goes into one of this size.

QUEST: What about when the season is over?

UNIDENTIFIED SAND SCULPTOR: Most sculptors leave and a bulldozer comes and demolishes them.

(END VIDEOTAPE)

QUEST: Now, John Crockford Hawley our guest is a Liberal Democrat councilor for Weston-super-Mare. Thank you for joining us this evening.

Your worshipful I believe is your title.

JOHN CROCKFORD HAWLEY, LIBERAL DEMOCRAT COUNCILOR FOR WESTON-SUPER-MARE: Rather old fashioned.

QUEST: We're here in Weston-super-Mare, a tourist attraction. Tourism is vital here.

HAWLEY: Absolutely, yes.

QUEST: With that in mind, what do you want out of this election? Bearing in mind you are party political.

HAWLEY: It would be good if whoever forms the next government would actually allow local government to have the wherewithal to get on and

organize itself. Increasingly local government has become beholden to central government. We've been agents of central government.

QUEST: You have the metropolitan councils which have been given more responsibilities.

HAWLEY: But we're not part of that.

QUEST: I know, but what would you like to be in charge of that you're not already in charge of?

HAWLEY: Well, we're currently going through a great process of regeneration in Weston-super-Mare. Lots of seaside towns have regeneration

problems. We have to go cap in hand begging for money instead of raising money ourselves. It's not a party issue. It's a different between local

government and central government.

QUEST: Let's talk about this regeneration. Obviously, I'm British and I've been to the seaside many times. One often thinks of a seaside as a

rather sad place, fish and chips on the beach, and candy floss, and a wet weekend in Wales, so to speak.

HAWLEY: Absolutely. And of course, we were like that. We're coming out of that.

QUEST: What's driving it?

HAWLEY: The economy. People are staying here rather than going abroad. And because we've had the ability to revitalize the sea front. A lot of

money is coming into Weston. And education, the university in Weston- super-Mare is doing great things to change the demographics of the town.

QUEST: How can Weston-super-Mare or any of the great seaside resorts, Scarborough in the northeast, how do you get rid of -- I'm choosing my

words carefully -- the often perceived, maybe not real, tackiness that goes with that? And you would agree with that.

HAWLEY: Absolutely, absolutely. But tackiness and part and parcel of the seaside, isn't it? You're escaping from the world of reality into

something which is not quite real. Sea sides have all been like that. But things are changing. We're beginning to see a change in the cultural

offering of Weston. People are coming here for music and for theater. Banksy changed the whole perception of that.

QUEST: Absolutely.

HAWLEY: We have the sunny derelict pool, Banksy had a lot to do with it. Culture is becoming the thing.

QUEST: Will the age or timeless B&B land lady standing there --

HAWLEY: You must be in my 9:00.

QUEST: And if you're late for breakfast.

HAWLEY: Which is served by 8:00 p.m.

QUEST: You'll be in trouble.

HAWLEY: B&Bs are here, they'll stay here. But people are demanding better service.

QUEST: Good to see you, sir, thank you so much for coming in. All the best.

[16:55:00] As we continue tonight, let me show you where we're going to be tomorrow. We're going to the Royal Bath Weston show. I might get to shear

a sheep. There will be a pig showing, all sorts of things. Friday we're in Royal Windsor as we continue our look across the country heading back

towards London. That's Freddie Brexit. Assuming if this rather worrying oil leak doesn't prove to be more worrying than it looks, but I think we've

got a handle on it. If you have any advice on how to deal with an oil leak, @RichardQuest is where you can give us your tips. You can listen to

our show as a podcast at CNN/podcast.

We will have a Profitable Moment after the break. We're in Weston-super- Mare at the sea front.

(COMMERCIAL BREAK)

QUEST: There is something delicious about the English sea side resort. The land lady standing there at the B&B, fish and chips on the beach and,

of course, invariably rains as you're trying to put up a deck chair when you're hoping to enjoy whatever sun there might be. But the way in which

they changed and rethinking themselves and reinventing themselves is quite remarkable. That's why a day here is as good as anywhere else that you're

going to find. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.

I'll see you tomorrow in Bath.

END