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Quest Means Business
Lawmakers Debating Whether Prime Minister Johnson Will Obey Law Blocking No Deal; The Speaker Of The House, John Bercow Says He Is Standing Down; Trump Makes Comments On Canceled Taliban Meeting; Irish Prime Minister, Dutch Trade Minister Cast Doubt on Brexit Delay; Lawmakers Debate Whether Prime Minister Boris Johnson will Obey Law Blocking No-Deal Brexit; Israeli Prime Minister Unveils Additional Iranian Nuclear Site. Aired 3-4p ET
Aired September 09, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: Markets are open doing business, 60 minutes before the close of the day, and much
nothing going on. Well, I say nothing. You saw the way there were good gains earlier in the day. They evaporated. We will get to the reasons and
understand why the Dow nudged into the minus column. Now back positive. Let's see how it ends 60 minutes from now. Those are the markets.
The reasons: And some of them are, Boris Johnson is facing a long night at Westminster and it could end with more defeats, in fact, it almost
certainly will. Never mind the Brexit, new numbers show the British economy is still growing and doing marginally better than expected, I might
add.
The parent company of this network is facing calls to break up. A new investor has big plans for AT&T, and they've only just put the whole thing
together. Tonight, we're live from London on Monday. It is September the 9th. I'm Richard Quest and at Westminster, I mean business.
And a very good evening to you. Eight o'clock in the evening in London. Here, lawmakers are going home in a matter of hours and have a five-week
break -- prorogation, it is called. We've discussed that before on the program.
A full day go however, crucial decisions, a bill aimed at blocking no deal. We talked about it last week. That Bill is now law. And the discussion
taking place in the House at the moment, a debate whether the Prime Minister will follow the law. There are a scintilla of suggestion that he
wouldn't. Boris Johnson is expected to close the debate for the government.
Speaking earlier alongside his Irish counterpart in Dublin, Mr. Johnson insisted Britain will leave the E.U. by October 31st, and to leave without
a deal would represent a failure of statecraft. And one other bit of parliamentary business, I was going to say it's not incredibly significant
at the moment, but Parliament has voted to force the release of government papers on a no-deal Brexit.
It is a fishing expedition to see what might be there, and if all that wasn't enough, in a very busy day in the House of Commons, a surprise --
the Speaker of the House -- John "Order" Bercow says he is standing down.
(BEGIN VIDEO CLIP)
JOHN BERCOW, SPEAKER, HOUSE OF COMMONS: I have concluded that the least disruptive and most Democratic course of action would be for me to stand
down at close of business on Thursday, October 31st.
(END VIDEO CLIP)
QUEST: Now, John Bercow could go as soon as today, that is if lawmakers vote for an early election. That's probably the last vote that we're going
to get. A motion on that will begin in a few hours' time. We're going to hear from the Prime Minister himself shortly, the debate will be followed
by a vote. It's a bit of a pyric event, it's going to fail.
Finally Parliament, will be prorogued. The House of Commons, The House of Lords will not meet again until the Queen gets the State Opening of
Parliament, and that's going to be on October, the 14th. Bianca, there's a lot going on.
BIANCA NOBILO, CNN CORRESPONDENT: So much going on.
QUEST: Okay, now of all of that, what is the important bit? I mean, it's all important in a sense, but in the big picture, what's the important bit?
NOBILO: The most significant is the fact that Boris Johnson's main negotiating ploy, being able to threaten the E.U. with no deal has now been
taken away from him. Now, he would argue that completely undermines his strategy with the E.U. and bearing in mind, the E.U. says that they are no
closer to a deal. He's got barely any time to get one. And without the mechanism by which he thinks he can force them into a deal taken away from
him, there is going to be no deal.
QUEST: Why does it matter that he -- besides his promise not to have a delay? I mean, if there is a delay until say January -- at the end of
January -- which is what this Act requires. Nothing has changed since May 1. Why would anything change from now until then?
NOBILO: Oh, this is the argument that Brexiteers would make, that it is essential it is solved now because it's been three years and no solution
has been found.
This morning when he was with Leo Varadkar, Boris Johnson, he said that he thought there was the perfect amount of time left to find the deal. The
thinking being, if they got concentrate minds, maybe they'll break this deadlock, and get things unlocked here.
QUEST: No. That only means, if they concentrate minds, maybe someone will give in.
NOBILO: Yes, but that would be breaking the deadlock.
[09:05:10]
QUEST: I mean what -- but I mean, he is hoping that the Europeans are going to. They have shown nothing -- they've shown no inclination in any
shape or form. They haven't even been really serious chinks in the E.U. armor.
NOBILO: No, and all of it really comes back to Ireland, and given that Leo Varadkar said this morning that no backstop basically equal to no deal to
them. They don't sound like they're ready and willing to get rid of the most contentious point of the deal, the backstop.
QUEST: Okay, so Parliament gets prorogued tonight and they all go off for five weeks. What happens in the meantime? Do negotiations continue with
the E.U.?
NOBILO: Negotiations are expected to continue with the E.U. They have supposedly been ramped up even though the E.U. says that the U.K. hasn't
provided them with concrete proposals that are realistic on how to solve the issue of the backstop.
In that time also, we will see the major party conferences: Labour Party, Conservative Party, and also the Lib Dems who are having a fantastic two
weeks even though Boris Johnson has been having a cataclysmic two weeks.
QUEST: Right. But as we know, with the Lib Dems, you can have a brilliant time and it doesn't translate to seats because of the way this whole system
is set up. First pass the post.
NOBILO: Not necessarily, but we're in this moment where it's almost impossible to tell what's going to happen electorally. People are feeling
very apathetic about the main parties, and Brexit is the key dividing line at the moment for voters, not party politics.
QUEST: Okay, so let's just assume that the Prime Minister loses, so there's no early election. We then have to go to October the 19th, which
is when he has to write asking if there's no deal or there's no new arrangements.
NOBILO: Yes, under the Act that receive Royal Assent today, he is going to do that.
QUEST: So what -- is he going to break the law? He says he's not going to. Is there wiggle room to -- I mean, I suppose you can frustrate the
law. But --
NOBILO: The issue is, you would do more than me, Richard, as a barrister, but the initial referendum was advisory; whereas, this is an Act of
Parliament that he will be contending with that is legal. So he wouldn't have much wiggle room in saying that he would be respecting the law by
delivering on the result of the referendum.
QUEST: Right. But if he was to send a letter, and then either rescind it or refuse to negotiate, or in some way, frustrate the intent of the letter,
I wonder whether that would also be considered to be against the law. Possibly, probably -- I don't know.
NOBILO: Well, the government have said that they are willing to test the law to the limits. So that does sound like that's the sort of ormolu they
could be pushing.
QUEST: We'll be testing away. Testing times. Recession fears are fading a bit. There's fresh growth in the U.K. economy and investors are
wondering whether at last, in the face of the Brexit crisis, rumbling on ever longer. And amid all the turmoil the risk of a no deal simply cannot
be ruled out. British owners say they are feeling the least prepared. We will explain why as we continue.
(COMMERCIAL BREAK)
[15:10:42]
QUEST: Tonight will be John Bercow's night as Speaker of the House of Commons. Shortly after he announced his intention to resign, he was in
typically defiant mood as he gave the green light to emergency debates brought by the opposition.
(BEGIN VIDEO CLIP)
BERCOW: People will understand that as far as the Speaker is concerned, his job is to stand up for the rights of the legislature. I never have
been -- I am not -- and never will be in the business of being bossed around my some footling member of the Executive Branch.
(END VIDEO CLIP)
QUEST: Freddy Gray is the Deputy Editor of "The Spectator." How will Speaker Bercow be remembered?
FREDDY GRAY, DEPUTY EDITOR, "THE SPECTATOR": I think as a self-promoting little twerp perhaps. That's what a lot of us feel. I mean, I think one
doesn't want to be too fogeyish about it, but the role of the Speaker is not what Bercow has turned it into. He has turned it into a way of
promoting himself and making himself famous.
He does these trips to America now. He could probably have a very jolly retirement. But I think it's been an embarrassing couple of years for
democracy in Britain and Bercow hasn't really helped.
QUEST: On that, you know, the arguments I'm going to throw against you that he has protected the rights of backbench MPs. He has allowed debate
on motions when the Executive attempted to steamroller Parliament.
GRAY: I think you'd have to be very blind to not see that he has very much been on the side of remain in this debate. He has not been a neutral
arbiter. And he's given -- you know, could you could argue that Parliament is pro-remain in itself. Therefore he has just reflected it.
But I think that would be generous. I think he has obviously wanted to stop Britain in the European Union, and he has succeeded.
QUEST: And on those occasions back in the spring, when he was prepared to ignore a good few centuries of precedent and roll into good ways. But he
always says he's only got the House's best interest.
GRAY: What do you think he said today? He thinks he's defending the legislature. But there's very complicated arguments -- constitutional
arguments -- about what the role of the legislature is. And I don't think it's that the Speaker should direct government and that so far has been
happening a little bit.
QUEST: Who will take over?
GRAY: Don't know yet. No ideas.
QUEST: So it will be coming. Names will start to come out the wardrobe, but will the House be looking for a Speaker that is more demure?
GRAY: I think that will be certainly what the Conservatives will want, is a Speaker who goes back to the traditional role, which is much more demure,
solid and doesn't try and grab so much attention. I mean, the famous, "Order, order" that in itself was a sort of device to make himself projects
more.
QUEST: Well, yes. Because I'm old enough to remember the Viscount Tonypandy who of course originally made it famous. And then Betty
Boothroyd. She had her own say. They all have. I mean, it's only the boring ones.
GRAY: You're certainly correct --
QUEST: Like Martin.
GRAY: Well, maybe it is good because Parliament is all about people asserting their character, that's good. But there's a difference when
you're asserting your character and sort of trying to control the way it plays.
QUEST: I need to pause you, if I may, Donald Trump is speaking --
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Well, in order to put themselves in a little better negotiating position. When they did that
they killed 12 people, one happened to be a great American soldier, a wonderful young man from Puerto Rico -- family is from Puerto Rico, and you
can't do that. You can't do that with me.
So they're dead as far as I'm concerned. And we've hit the Taliban hotter in the last four days that they've been hitting over 10 years. So that's
the way it is.
QUESTION: Did your administration, did your advisors, talk you out of that meeting with the Taliban?
TRUMP: Say it -- what?
QUESTION: Did your administration, did your advisors, talk you out of that meeting with the Taliban?
TRUMP: No. Actually, in terms of advisers, I took my own advice. I liked the idea of meeting. I've met with a lot of bad people and a lot of good
people during the course of the last almost three years. And I think meeting is a great thing. I think that meeting with -- you know, you're
talking about war. There are meetings with war. Otherwise, wars would never end. You'd have them going forever.
We had a meeting scheduled. It was my idea, and it was my idea to terminate it. I didn't even -- I didn't discuss it with anybody else.
When I heard, very simply, that they killed one of our soldiers and 12 other innocent people, I said, "There's no way I'm meeting on that basis.
There's no way I'm meeting." They did a mistake. And, by the way, they are telling people they made a big mistake. They're saying it loud and
clear that they made a big mistake -- John.
QUESTION: Mr. President, why did you want to have them at Camp David? And what will you do about Afghanistan now?
TRUMP: Well, Camp David has held meetings with a lot of people that would have been perceived as being pretty tough customers and pretty bad people.
There have been plenty of so-called "bad people" brought up to Camp David for meetings. And the alternative was the White House, and you wouldn't
have been happy with that either.
So Camp David would have been a good place, but I don't want to meet under circumstances where they go around and try and make themselves a little bit
more important by killing a soldier; by killing, actually, also a great NATO soldier, in addition to our soldier; and also a total of 12 people. I
don't want that.
But, you know, Camp David has had many meetings that, I guess, people would not have considered politically correct. Yes, Steve.
QUESTION: Are you still going to draw down troops there? Or what's the status of that?
TRUMP: Well, we're looking at that, and we're thinking about it. You know, as I've said, we've been policemen there for a long time. And the
government is going to have to take responsibility or do whatever it is they do. I've been saying, from the campaign, that we want to get out at
the earliest possible time.
We're doing a very good job. Our soldiers are incredible, but they're serving as policemen to a large extent. I just made a statement on it.
Yes, we'd like to get out, but we'll get out at the right time.
QUESTION: (INAUDIBLE)
TRUMP: What?
QUESTION: Can I ask a question on India and Pakistan, sir? Can I ask a question on India and Pakistan? Do you intend to --
TRUMP: Well, India and Pakistan are having a conflict over Kashmir, as you know. I think it's a little bit less heated right now than it was two
weeks ago, and I'm willing to help them. I get along with both countries very well. I'm willing to help them if they want. They know that that is
out there -- David.
QUESTION: Mr. President, are you willing to debate the Republicans who are running against you?
TRUMP: You know, I don't even know who they are, other than I know that --
QUESTION: Joe Walsh, Mark Sanford.
TRUMP: I guess -- I guess you could say -- no, but I don't know them. I don't know them. I would say this: They're all at less than one percent.
It's a -- I guess it's a publicity stunt. We just got right -- a little while ago, 94 percent popularity or approval rating within the Republican
Party. So, to be honest, I'm not looking to give them any credibility.
They have no credibility. One was a person that voted for Obama, ran as a Vice President four years ago, and was soundly defeated. Another one got
thrown out after one term in Congress and he lost in a landslide. And the third one -- Mr. Tallahassee Trail or Appalachian Trail -- he's the
Appalachian Trail, right?
The Tallahassee Trail is nice, too, but I think he was the Appalachian Trail. But he wasn't on the Appalachian Trail; he was in Argentina. Yes,
go ahead.
QUESTION: Are you okay with using the military as the police force on our southern border?
TRUMP: Say it louder.
QUESTION: Are you okay with using the military as a police force on our southern border?
TRUMP: Well, right now, Mexico has been doing a great job for us. And, frankly, we're very appreciative. But we've also been very -- pretty
rapidly changing the regulations, the rules, winning in court. We've had a lot of wins. We did it early on, but we're having a lot of wins in court
right now. The courts are backing us up, and that has a lot to do with our success on the southern border.
In addition, a lot of wall is being built. And every time we put up a mile of wall, that helps us a lot.
QUESTION: Are you prepared to offer temporary protected status to people from the Bahamas?
TRUMP: So, we're talking to a lot of different people on that. You know, we're recovering from the hurricane also. Florida did get hit -- not as
hard as we anticipated. And you look at Georgia. You look at South Carolina and North Carolina. I'm going to North Carolina right now --
North Carolina -- to have a rally for Dan Bishop.
But before I go to the rally, we're going to be stopping at one of the sites that got hit very hard by the hurricane. So we're also recovering
from a hurricane. But we have to be very careful. Everybody needs totally proper documentation because the -- look, the Bahamas had some tremendous
problems with people going to the Bahamas that weren't supposed to be there.
I don't want to allow people that weren't supposed to be in the Bahamas to come into the United States, including some very bad people and some very
bad gang members and some very, very bad drug dealers. So we are going to be very, very strong on that.
[15:20:06]
TRUMP: Let me -- let me just explain. Large sections, believe it or not, of the Bahamas were not hit. And what we're doing is bringing the people
to those sections of the Bahamas that have not been hit. We've done a lot of the USAID. We've done a lot of work with our Coast Guard, with our FEMA
people, who have been phenomenal. I mean, they have been phenomenal. So we'll see what happens. We'll see what happens.
QUESTION: On North Korea, sir -- on North Korea, when's the last time you heard from Chairman Kim?
TRUMP: Well, I saw a statement was just put out having to do with North Korea, and that'll be interesting. We'll see. It just came out over the
wires a little while ago. So, we'll see what happens. In the meantime -- in the meantime, we have our hostages back, we're getting the remains of
our great heroes back, and we've had no nuclear testing for a long time.
QUESTION: Mr. President, on the Ninth District Court judge that continues to issue nationwide injunctions --
TRUMP: Yes.
QUESTION: The Ninth District Court Judge -- Judge Tigar. Do you think it's constitutional for a judge --
TRUMP: Again. What was the beginning?
QUESTION: With the judge in the Ninth District Court -- the San Francisco judge that continues to issue nationwide injunctions on immigration policy,
do you think that's constitutional?
TRUMP: I think it's very unfair that he does that. I don't think it should be allowed, and we'll see what happens. There's a lot of new law
being made on that, but we don't think that should be happening --
QUEST: So that's the President of the U.S., Donald Trump -- a range of questions -- chopper talk as they call it with the helicopter in the
background as he heads off to the Carolinas.
Sarah Westwood is at the White House and was listening in. I suppose, the most interesting and newsworthy part was right at the top of course where
the President talked -- what did you make of it.
SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: That's right, Richard. President Trump saying that peace talks with the Taliban are essentially
"dead" to use his words. He disputed reports, including CNN reporting, that there was dissent on his team about whether to host the Taliban on
U.S. soil the same week as the 18th anniversary of the 9/11 attacks.
And President Trump also defended the decision to have Camp David as the venue for those talks. He said that the only alternative would have been
the White House, he said, you know, nobody would have been satisfied with that either.
But he also went on to talk about a number of other subjects, including that of Bahamian refugees coming to the U.S. after Hurricane Dorian. He
said that those people have to have proper documentation. He alleged that there could be bad actors hidden among the refugees who want to come from
the Bahamas, including he said, drug dealers, gang members, it's not clear exactly what he is referring to.
He also talks a little bit about the China trade deal continuing to argue that China's economy is being hit harder than the U.S. economy and that
China is still interested in making a deal.
I asked President Trump on the subject of the Taliban, whether a future meeting with that group is off the table. He says we're not discussing it
right now. But CNN's reporting, Richard, is that the administration has been looking at potential new dates for a future summit once this current
situation blows over.
QUEST: Right. But the President is caught between a rock and a hard place because he says on the one hand, Sarah, that, you know, Camp David has
hosted many unsavory people before, many enemies before, because that's where you make peace. That's where -- those are the people you make peace
with.
But he said, we're not talking to those people who have killed American soldiers. How is he going to square that circle?
WESTWOOD: Right. That's one dilemma he is facing, Richard; another is the fact that at its core, this is a deal about bringing the troops home from
Afghanistan. That's a long stated promise of President Trump, something he obviously wants to do.
And yet in order to get there, at some point, these negotiations are going to have to be restarted. And now that he is casting the end of the talks
in such absolute terms, he said they're dead.
He said in his tweet on Saturday that he is canceling peace talks all together. At some point, if he wants to reach that goal of bringing the
troops home, the way forward is to restart those talks. So he is opening up himself to a sort of dilemma in the future where he may be criticized
for going back on the things he is saying right now, Richard?
QUEST: Sarah, thank you. Sarah is at the White House. Freddy Gray is here with me on Abingdon Green, Westminster, and we return -- before we
return to the minutiae of what Parliament is doing at the moment. How helpful or damaging, is it when President Trump supports Boris Johnson in
such overt terms?
Because the U.S. President is popular in certain parts in this country, but I wouldn't say he enjoys the overwhelming popularity.
GRAY: I don't think Boris Johnson has ever wanted his sort of overt support.
QUEST: He's got it.
GRAY: But he's got it. And I don't think it's perhaps as toxic as a lot of people in Westminster think it is as you implied there. I mean, I think
in the country, the general feeling towards Trump is not favorable, but it's not as starless as you might think. And as we saw in his visit here,
quite a lot of Brits quite enjoyed the fact that we might have a better relationship with America, a good relationship with America after Brexit.
[15:25:13]
QUEST: And finally, so Parliament prorogues five weeks, then everybody comes back in. There is this short window before October the 19th. Is it
you're feeling that he -- I mean, look, the chances of material are slim to none.
GRAY: Yes.
QUEST: Let's just call a spade for what it is.
GRAY: Yes.
QUEST: Is it your feeling, he does send the letter as required, but then somehow frustrates it, doesn't negotiate, whatever it might be?
GRAY: No, I think he doesn't. I mean, there is no political capital for him now to eat humble pie and ask for an extension. So I think what he
will have to do is put the question over to Corbyn and this might actually mean at some point, asking the Queen to ask Corbyn to form a government.
And that would mean that Corbyn is now faced with the huge dilemmas of Brexit that Boris hasn't been able to resolve. And that probably means you
then get a general election quicker than any other route.
QUEST: Good to see you, sir. Thank you.
GRAY: Good to see you.
QUEST: Thank you. Thank you very much indeed. Mairead McGuinness is the first Vice President of the European Parliament. And Mairead joins me now
from Brussels.
By now you must be seriously wondering what on Earth they've been drinking here in London, that has led to such shenanigans and difficulties. But
thinking of how the Taoiseach and the Prime Minister were today, they were pretty blunt with each other about the possibilities forward.
MAIREAD MCGUINNESS, FIRST VICE PRESIDENT OF THE EUROPEAN PARLIAMENT: Well, I think they were very direct. I think the Taoiseach was very friendly, as
indeed was Prime Minister Boris Johnson because they have to be. They are leaders. They have to be above and beyond all of this.
But Leo Varadkar left Prime Minister Boris Johnson in no doubt of the situation when it comes to the withdrawal agreement, what the red lines, if
you are from an Irish and a peace process perspective, and indeed the European Union perspective. I thought it was a very good meeting, I
listened and watched the body language. And I did think that there was a meeting of minds around their political responsibilities.
And I think the statement from Boris Johnson where he said that, "A no deal would be a failure of statecraft," was particularly significant. I've
always held this view that if it were a case that the U.K. crashes out of the European Union, I think it would be a huge defeat of parliamentary
democracy and diplomacy and how leaders engage with each other, and not something that Boris Johnson would want. And indeed, not something that we
want.
QUEST: Even if you get a delay, even if -- I mean, is it your feeling that if Boris Johnson under the new Act came to Brussels and said, "I need -- I
need a delay." Would the Parliament approve that the Council granting him it?
MCGUINNESS: We know better the view of this Parliament next week, we're having a very big debate and resolution on the state of play on Brexit.
Nobody wants to delay for the sake of a delay. What we want is a resolution. We do have a withdrawal agreement that was negotiated between
the United Kingdom and the European Union.
The dilemma we all face and you're reporting from outside the House of Commons is that it is the politics in the United Kingdom, which makes
ratification difficult and if you like, consensus really difficult.
So we've done our part. And we're prepared to work closely with the U.K. to move things forward if it's possible, but it is really outside our
control as to how this then gets ratified in the House of Commons.
And lots of colleagues here are saying that while we're open to listening to the potential or the need for an extension, I don't think here, the
European Union wants to see that happen without us knowing what the next steps are.
And of course, that's all uncertain -- would there be an election? When will there be an election? And all of those other issues that you're
trying to tease out as you stand there. Those are questions we are asking here in Brussels.
QUEST: All right, well, let me ask you to take your first Vice President hat off and put your politician hat on and tell me, what do you want? Do
you -- would you prefer -- I realized you don't have any gift in this, but would you prefer an election in the U.K. sooner rather than later?
MCGUINNESS: It is irrelevant to me when there's an election in the United Kingdom. I mean, I'm interested, as all politicians are, in how
Parliaments come and go.
What I want is stability in the United Kingdom and certainty that when they work with the European Union, whether it's this government, although it
looks like there will be an election or another government and that they look at where their responsibilities lie to their own citizens and indeed
to their relationships with the European Union.
[15:30:00]
MAIREAD MCGUINNESS, FIRST VICE-PRESIDENT, EUROPEAN PARLIAMENT: And when you ask me to take my half as first VP here in the parliament and become a
politician, it is one of the saying, we're all working in parliament and I know the speaker has made his statement in the House of Commons today.
And I know how difficult the tensions are in --
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Right --
MCGUINNESS: The House of Commons. And frankly, the biggest fear I have is that this might -- this paralysis might continue, and not just in this
parliamentary term, but if there is a new parliament, and that would really be --
QUEST: Yes --
MCGUINNESS: Very difficult for all of us to deal with. We have dealt with Brexit since the referendum in 2016, and it looks like it might run into
2020 --
QUEST: All right --
MCGUINNESS: Nobody thought this would happen. And I think that the Prime Minister that called the referendum certainly didn't expect this.
QUEST: I think we can -- I don't think you'll get much disagreement on that particular point. Mairead, very good to see you as always, thank you
for coming on tonight and talking, much appreciated. We will continue -- British lawmakers are debating whether the Prime Minister will follow a law
blocking a no-deal Brexit.
Will we have a renegade Prime Minister who chooses to ignore the will and law of parliament?
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in just a moment. It's going to be a late night here at Westminster, please, do stay
with me as we wind our Mairead way towards midnight. Boris Johnson is preparing to try again for a snap election.
And our parent Ma Bell is used to calls for breakup, now, a new activist investor wants big changes at AT&T. You're watching CNN and on this
network, the facts, they always come first. Israel's Prime Minister has revealed what he calls a previously secret nuclear site in Iran.
Benjamin Netanyahu says it was used for experiments developing nuclear weapons. He says Iran destroyed the site over the Summer once it realized
Israel had detected it.
[15:35:00]
Israel says the site was operational in 2003. Iran is rejecting the claim, accusing Israel of seeking a pretext for war. Officials from 48 of the 50
U.S. states have unveiled plans for an anti-trust investigation of Google. A D.C., District of Columbia and Puerto Rico are participating. They all
say they're looking into whether the tech giant has misused its dominance to harm consumers and competitors.
A salvage team has made contact with the missing crew members of a cargo ship that overturned and caught fire off the coast of the U.S. state of
Georgia on Sunday. The Coast Guard has rescued 20 others already from the ship. They're all South Korean and Filipino nationals.
Now, the U.K. economy grew in July, and that exceeded expectations. Roughly, 80 percent of the U.K. economy grew for the first time in four
months. All this as firms are preparing for Brexit, and that might be the secret to these numbers.
The Q-2 numbers were dreadful, and July's gains are easing fears of a recession. But let's not get too excited, the economy remains fragile.
The ONS is urging caution looking at the monthly growth number. George Buckley is the chief U.K. economist at Nomura. Were you surprised when you
saw monthly growth?
GEORGE BUCKLEY, CHIEF U.K. ECONOMIST, NOMURA: We were, but as you say, I don't think we should be too over excited about it because these numbers
have been very volatile over the course of this year. You had the March 29th deadline for Brexit, which of course was associated with a huge amount
of build-up for stocks. And then that was wound down again.
We haven't had much evidence so far that stocks are being built up again, yes, but I suspect they will be.
QUEST: Right, so clip away the volatility if you can. Is the U.K. economy weathering the Brexit crisis and paralysis badly or good?
BUCKLEY: Parts of the economy are weathering it reasonably well. I mean, look at the labor market, for example, employment is growing, wages are
rising, real wages is stripping out inflation and also rising. So pretty good. The consumer is doing OK. What's not doing OK is investment, and
companies are not investing for the obvious reason. So, they don't know what the situation is going to be like in, no more in a few months, but a
few days.
QUEST: But that lack of investment, there's always a case of pent-up demand after certainty arrives.
BUCKLEY: But if that certainty is for a departure from the EU, I am and without a deal, I imagine there's going to be still a lot of uncertainty
about where things go thereafter.
QUEST: I guess what I'm trying to get to here, George, is that with so much complete shenanigans and nonsense and parliament and a government that
seems to be incapable -- well, not seems to be, is incapable of getting anything passed. I'm surprised the economy isn't in recession and on its
knees.
BUCKLEY: Well, and it got very close, and we saw for example .2 decline in GDP in the second quarter which admittedly came after a stronger number in
Q-1. But you're obviously right. I mean, there are parts of the economy that had as you say, that had weathered the storm relatively well. There
are a huge amount of risk, it's not just Brexit either --
QUEST: But why isn't the U.K. economy -- I mean, I realize I'm leading you down the garden. Why isn't the U.K. economy doing worse, bearing in mind
the issues it's facing?
BUCKLEY: Because there are a lot of parts of the economy. And some of them are offsetting each other. So, for example, you have the consumer.
The consumer is doing well because the labor market, from past experience, has done quite well. We've seen employment rise, we've seen unemployment
fall, wages looking pretty strong.
People have money in their back pockets and they're spending it. Not very quickly, but they are spending it. Where we're not seeing any spending
happening is in the business sector. And that's why investment growth is declining or investment is declining.
And I think that's really the part of the economy. And also, exports as well. I'm particularly worried about exports. Though the weakness of the
currency is obviously helping. But the point is that we're not just going through a Brexit crisis, we're also going through a global crisis of the
manufacturing sector and trade. And that's clearly bad for exports. The U.K. highly depends on exports.
QUEST: What percentage of the U.K. roughly is export-driven in that sense?
BUCKLEY: Well, what economists like to do is look at what we call the openness ratio --
QUEST: Yes --
BUCKLEY: Which is exports and imports divided by GDP, it's about 65 percent in the U.K., compare that to the U.S., it's 25 percent. A much
more open economy.
QUEST: And interest rates, purely personal interest here. Have a U.K. mortgage interest rate, obviously banking settling on basic -- no,
seriously, what do you expect the next move by the bank to be?
BUCKLEY: Well, we think the next move will be up, but of course you've got to bear in mind that this is based on a central projection that Brexit is
solved in a smooth and amicable way. And it looks anything but smooth what's going on in parliament behind us right now.
But you've got to have a central forecast, and that forecast is where we get a deal. And it's looking --
QUEST: Do you still think so?
BUCKLEY: Well, it's part of our main forecast. It's what the government hopes for, you think, but we'll have to see.
[15:40:00]
QUEST: Good to have you, George, thank you very much indeed. You and I will continue in a moment, 20 minutes left of trading on Wall Street, we
need to update you on how the markets are looking and the factors moving them in a moment.
(COMMERCIAL BREAK)
QUEST: The U.S. markets are demanding our attention. The Dow is mostly flat, it has been up and down, look at that. We are now -- we're not way
off the best of the day, but it's giving enough, it shed its gains, it went negative. Paul La Monica clearly with us to explain why I'm guessing small
moves and more trade.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think that, that is definitely, you know, a big factor. You know, keep in mind, Richard, you
don't have a lot of big corporate news this week to really get the market in gear.
I mean, earnings have pretty much wrapped up, we've been in that interim period until companies start to report in October. So, all of those big
headlines we had last week about the jobs report and the latest with the U.S.-China trade war, you know, investors I think still digesting all that
and trying to figure out where the U.S. economy is going and what's next in this trade war with China.
QUEST: Right, now, AT&T is on track for its best day since January. Elliott Management has taken a $3 billion stake in the company, of course,
it's our parent company. And the stock has been a dog with fleas for the longest time.
The hedge fund says AT&T could boost its value by spinning off assets and focusing on 5G. It's our parent company. I mean, they've only just put
this thing together. What would you spin off?
LA MONICA: Well, keep in mind, they just put the "Warner Media" aspect together by acquiring our former parent company "Time Warner" as now known
as "Warner Media". But they've owned "DirecTV" for a couple of years now, and the knock on AT&T is that maybe they bought "DirecTV" at the top,
haven't really done well with that particular asset.
So that, I think is one area where Elliott Management would like to see a possible sale, maybe some of the Mexican assets as well that have
underperformed in. You know, I think the problem for AT&T is that Elliott has a point that, you know, Verizon and the now combining T-Mobile and
Sprint have been able to gain some ground on AT&T while AT&T has been distracted with some of these other acquisitions.
[15:45:00]
QUEST: Glad you're -- I was just looking -- if you look back at that share price, it's when you see that -- I think I was wrong in being so
disparaging about the share price so far. If you look again, it's actually not done that badly since the beginning of the year, from 28.54 up to
36.18, it's a United States dollar premium, 30 percent on the original.
But Paul La Monica, briefly, is it the prospect of -- is it the prospect of some breakup and some spin-off that's driving that, rather than the
underlying performance?
LA MONICA: I'm not so sure, as prior to today, I don't think there were that many people expecting that AT&T would go back into breakup mode like
it did back when it was Ma Bell, it sold off all the baby bells. And I think what's really important to remember here is that Elliott Management,
even though they now have a big stake in AT&T, there are three gigantic mutual fund companies, Vanguard, BlackRock and State Street that
collectively own almost 15 percent of the stock.
I don't think Elliott is going to get anything done unless they can get any of those guys on board. So far, all of them have had no comment to
Elliott's plans.
QUEST: Good to see you, Paul La Monica. Shipping companies will soon face new regulations, demanding that they cut down on their fuel emissions. One
company Hurtigruten is already on its way, introducing hybrid ships. John Defterios has more from Norway as part of the global energy challenge.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): On Norway's West Coast, the sea for centuries has delivered a bounty. From fisheries to oil
to cruise tourism. But with big industry comes an impact on the environment, which cruise company Hurtigruten has been trying to offset
with a new fleet of hybrid ships.
(on camera): The company's move to hybrid comes ahead of a sea change in the industry itself. Come January, sulfur from heavy fuel oil will have to
be a fraction of what it was for decades, setting off a scramble in the industry for solutions.
(voice-over): These engine rooms will soon be transformed to a new hybrid system, combining marine gas oil with electric battery packs and even
biogas, produced from organic waste from Norway's fisheries and forests.
DANIEL SKJELDAM, CHIEF EXECUTIVE OFFICER, HURTIGRUTEN: Our aim is to show that it's possible, that we can build the world's first hybrid-powered
cruise ship with batteries, that we can be the first ones to start using biogas from a circular economy, and then we expect other ones to pick it
up.
DEFTERIOS: While Hurtigruten has a relatively small fleet and smaller vessels than the giant cruise liners, some holding ten times the
passengers, its CEO is hoping his company will have a giant role influencing the industry with over a century of experience in these
pristine waters.
SKJELDAM: We are so close to the arctic communities. We have seen climate change happen over the last 15, 20 years directly in front of our eyes.
So, we have a massive drive from our people to lead this technological shift.
UNIDENTIFIED MALE: This is the battery racks where all the batteries are going.
DEFTERIOS: Rune Andreassen is one of Hurtigruten's most experienced sea captains, and has now been brought back on shore to project manage
construction of the newest hybrid.
(on camera): We didn't see a lot of change and then people are saying, look, climate change is a real threat. Shipping has a role.
RUNE ANDREASSEN, PROJECT MANAGER, HURTIGRUTEN: Yes, of course, big role because there's a lot of western worldwide still burning heavy fuel. It's
-- if you ask me ten years ago, I will never say that this is possible on an ocean-going vessel, but now we're here, and I think it's just the
beginning.
DEFTERIOS (voice-over): Is the industry too focused on the bottom line and almost addicted to heavy fuel oil?
SKJELDAM: So, we have chosen as a company to be in the forefront, to lead and not wait for the regulations. And then the investors start requiring
change, things will happen.
DEFTERIOS: Perhaps not smooth-sailing from the industry as regulations take hold, but clearly a smaller player is out to chart a new course. John
Defterios, CNN, Norway.
(END VIDEOTAPE)
QUEST: Now, in the building behind me, lawmakers are debating the rule of law after passing a bill to block a no-deal Brexit. And it's a law that
the Prime Minister Boris Johnson may still ignore.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: Inside parliament right now, lawmakers have approved a motion, forcing the government to publish documents about proroguing. And now
they're discussing the rule of law, and whether the Prime Minister Boris Johnson will obey a law to block a no-deal Brexit.
Joining me now is Joelle Grogan; the senior lecturer in law at Middlesex University. We know we are in trouble constitutionally when you arrive
because we really are deep in the weeds now of some pretty heavy stuff.
JOELLE GROGAN, SENIOR LECTURER IN LAW, MIDDLESEX UNIVERSITY: You should put that on a business card.
QUEST: Tell me, what's likely to happen because the Prime Minister is mandated to ask for a delay if he hasn't got a deal by October the 19th.
What happens if he doesn't?
GROGAN: So in this scenario, we're imagining that he does not follow the law, essentially, he breaks the law. He does not give that letter to the
European Union Council, requesting that extra amount of time. Now, simply, that is breaking the law.
I can tell you all about rule of law arguments, but what's probably more relevant is to say, well, what happens then? Now, a range of things will
almost immediately happen, both here in the Commons and also probably in the courts. A range of cases will be brought against the Prime Minister,
saying you are acting unlawfully.
Now, I know there's a lot of discussion on potential criminal law offenses, and we do have one common law offense which we may see in this context, but
I still think that's unlikely.
QUEST: Misconduct in a public office.
GROGAN: Exactly, which is common law offense. Essentially, you have to establish a conscious effort, a conscious knowing or doing --
QUEST: Right, but more likely, somebody is going to try and go for a written material(ph) or something to force the Prime Minister to actually
follow the law.
GROGAN: Exactly, there will be a court order. And at the point that he would violate a court order to follow the law, then you could have criminal
sanctions. But more likely --
QUEST: Go on --
GROGAN: Is the House of Commons, more likely is the House of Commons stepping in and probably bringing in a motion of no confidence. That's the
law most likely to be applied in this situation.
QUEST: OK, so, but then you head into a general election, which we may have had then by that stage already.
GROGAN: Potentially, now we start talking about time --
QUEST: Right --
GROGAN: And effect of the those elect --
QUEST: To those viewers -- and our viewer is always very conscious of these matters -- to our wise viewers who want to know, well, do we have in
this country an American equivalent of impeachment where you -- there is a procedure for removing a Prime Minister, if not a government?
GROGAN: The very simple answer is it is the motion of no confidence. However, I did have a very surreal experience at 2:00 a.m. this morning
looking into impeachment. No Prime Minister in British history has been impeached. However, there are some references to something akin to
impeachment in the 1800s, referring to a case from the 1700s.
[15:55:00]
So, in all things Brexit, it's the same. It's legally possible, but entirely implausible.
QUEST: But we're unlikely to see, for example, a Prime Minister tried at the bar.
GROGAN: Highly unlikely, highly unlikely.
QUEST: What about in the magistrate's court?
GROGAN: In all things Brexit, I don't want to make any estimations of what will happen.
QUEST: Give me a gut feeling, I mean, in the sense of how unusual is all of this for you who have studied this for some years? How unusual are the
area that we're in now?
GROGAN: I think you said it brilliantly at the very beginning. For a person whose whole research -- this is my foundation, as the rule of law,
the importance of the rule of law, for me to be talking here right now is probably a bad sign. The rule of law is the foundation of all democratic
legal systems, but it boils down to one very simple idea, no man, no government, and no Prime Minister is above the law.
QUEST: Thank you very much. We will take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. The last guest summed it up. When we're sitting here discussing whether the Prime Minister of any mature
democracy is going to break the law, that is indeed a telling day. Remember, the building behind me is called the Mother of all Parliaments
for a good reason.
Its powers of independence against monarchy go back to Runnymede, Magna Carta and have been that way ever since. The rights of monarchs to rule
has long since gone, and by that same token, the rights of Prime Ministers to ignore the law never arrived in its place. Many parliaments around the
world will be watching what's going on here, both with an element of amazement.
Yes, they are following rules and procedures, and it is following an ordered path, but that ordered path is leading to chaos. And that's what
we've got. And that chaos ends up with motions that are irrelevant, debates that are meaningless, and you end up with the central tenet that
people are asking tonight, will this Prime Minister follow the law or will he break it?
Now, that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. The bell
is ringing, the day is done.
(BELL RINGING)
END
