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Quest Means Business
Liz Truss Resigns As British Prime Minister; FTSE 100 Closes Higher After Truss Resigns; Liz Truss Resigns U.K. Premiership; Calls For General Election In U.K.; A Week Of Tory Party Turmoil; "Profitable Moment". Aired 3-4p ET
Aired October 20, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:25]
RICHARD QUEST, CNN INTERNATIONAL HOST: Tonight, the British government seems to be disintegrating following the resignation of the UK Prime
Minister Liz Truss.
Liz Truss will leave office, but she will stay there long enough for her replacement to be appointed.
ISA SOARES, CNN ANCHOR AND CORRESPONDENT: And she will stay in office of course. She had only been in office for 44 days and this hour, Richard, we
will discuss what comes next? The damage that has already been done and the race of course, to find a successor.
QUEST: All of these aspects, we will look at the politics of it, which is pretty grim and nasty. We will take care of the economics, which isn`t much
better and we will give you an understanding hopefully by the end of the year of where all this might end up -- Isa.
SOARES: Indeed, well, hopefully, we will give you some sort of clarity. I`m coming to you live now outside the Houses of Parliament where it`s just
gone eight o`clock, plenty for us to really cover today, what`s been a day really in disarray of chaos within the Conservative Party and now needs to
choose a new leader by the end of next week after just completing a seven- week leadership contest.
And this all comes of course, after the universal condemnation of Miss Truss` fiscal plan. The British pound plunged to record low and the Bank of
England, if you remember was forced to intervene in the bond market.
Kwasi Kwarteng was dropped as Finance Minister, and that only happened last week in case you were just wondering, since then, speculation over Liz
Truss` future intensified.
Now, Richard, you and I were -- it feels like only a couple of days ago, you and I were talking about this. The mess in this government. I don`t
know how you`re seeing it from Istanbul, but clearly here, many said the writing was already on the wall -- Richard.
QUEST: Oh, well, there are various jokes, obviously, particularly in a country like Turkey, which has its own problems with government. Several
people have had wry smiles, as they`ve said, "Oh, would you like a few pointers from us? Would you like to know how do it over here?"
I saw your interview with the Italian lady in the last hour, and how Italy is not liking it stereotyped. But the truth is, Isa, the government -- the
UK government brought this upon themselves, and what we hope tonight to show is that the effects of this mismanagement of the economy will be
costing the British taxpayer very dearly, for many years to come.
SOARES: Yes, very much. So it was self-inflicted as you pointed, now, it`s about creating the stability that this country really needs. And Liz
Truss` resignation statement, if you heard it earlier today was pretty short. Pretty much like her tenure as Prime Minister.
It was a 90-second speech and Miss Truss noted the country`s many challenges and listed her accomplishments. Have a listen.
(BEGIN VIDEO CLIP)
LIZ TRUSS, OUTGOING BRITISH PRIME MINISTER: I came into office at a time of great economic and international instability. Families and businesses
were worried about how to pay their bills. Putin`s illegal war in Ukraine threatens the security of our whole continent. And our country has been
held back for too long by low economic growth.
I was elected by the Conservative Party with a mandate to change this. We delivered on energy bills and on cutting national insurance, and we set out
a vision for a low tax, high growth economy that would take advantage of the freedoms of Brexit.
I recognize though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party.
I have therefore spoken to His Majesty, the King to notify him that I am resigning as leader of the Conservative Party.
This morning I met the Chairman of the 1922 Committee, Sir Graham Brady. We`ve agreed that there will be a leadership election to be completed
within the next week.
[15:05:10]
This will ensure that we remain on a path to deliver our fiscal plans and maintain our country`s economic stability and national security.
I will remain as Prime Minister until a successor has been chosen.
Thank you.
(END VIDEO CLIP)
SOARES: So Liz Truss resigns.
Scott McLean is in Downing Street talking us through really what we can expect next.
Talk us through the choreography here -- Scott.
SCOTT MCLEAN, CNN CORRESPONDENT: Isa, yes. It is going to be an interesting couple of days and it might actually only be a couple of days
because we could have a Prime Minister as soon as Monday, if there is only one candidate who manages to garner the support of 100 of their fellow
Conservative MPs and that is a pretty high bar considering when the leadership contest was held over the summer, there were zero candidates who
after the first round had the support of 100 MPs.
Obviously, they`ll have to whittle themselves down if MPs or candidates are finding that they can`t actually get enough support. And so behind the
scenes, we`ll see a lot of jockeying, a lot of horse trading, a lot of throwing support surely, until someone can get to 100.
It actually wasn`t until around two that Rishi Sunak in the leadership contest this summer got to a hundred. It wasn`t until four rounds later
that Liz Truss, and then later Penny Mordaunt joined him with at least 100 MPs backing him.
And so Liz Truss, it seems, had dug herself quite the hole and right from the get go, from when she became Prime Minister, one that she no matter how
hard she tried, no matter what she did, she could not pull herself out of, but now the party is finding themselves at the bottom of that hole, as
well.
And so you can understand the need for expediency to try to right the ship as quickly as possible. You can also understand the need for expediency
given the fact that these country is going through a cost of living crisis and all of the decisions that this government is making is having real
impacts on people`s lives.
And so people like Penny Mordaunt, people like Rishi Sunak are very likely to be the frontrunners as it goes so far, especially considering that Rishi
Sunak, the man who came second in the leadership contest this summer, but had the most support amongst MPs was the one who seemed to correctly
predict that Liz Truss` policies would be disastrous for inflation, and it turns out, he was exactly right.
So, you have to wonder whether that`ll give him some kind of newfound credibility this time around.
SOARES: Credibility is indeed what they need right now.
Scott McLean outside 10 Downing Street, really appreciate it, Scott.
And speculation of course, like Scott was saying about who will become the next Prime Minister is well underway here.
Rishi Sunak, the former Chancellor, was the odd maker`s favorite. If you remember the last contest, he lost to Liz Truss in the final round. Penny
Mordaunt is another possible choice, and some MPs have expressed support for former Prime Minister Boris Johnson, even though he resigned just after
three months -- three months ago in fact, because of the scandal that engulfed him.
The winner is set to be named by the next week. Party Chair Jake Berry, said time was of the essence. Have a listen.
(BEGIN VIDEO CLIP)
JAKE BERRY, BRITISH MEMBER OF PARLIAMENT: My message is that we will act quickly, we will continue to act quickly to ensure that this country has
the stability it requires.
(END VIDEO CLIP)
SOARES: Bianca Nobilo is with me now.
I mean, time is of the essence because people have had enough quite frankly, that the credibility of this party is at stake.
BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: We`ve had a revolving door of leaders, as the leader of the opposition, Keir Starmer put it.
Obviously, people are getting fed up, party supporters are getting fed up. They need to do this in the way that causes the least amount of disruption
and makes them look serious and like they`re putting governing and the country first before their own egos within the party, jostling to become
Prime Minister, et cetera.
I was just thinking as you were going through the candidates, too that even though Rishi Sunak, for example, was the MPs` favorite, he was considered
to be a safe pair of hands, quite tested. He`d been Chancellor throughout the pandemic and his economic policies have been lauded by economists.
But it`s not always about who has got the most support, it can be about who has the least enemies, and somebody like Penny Mordaunt is more warmly
received on the right than Rishi Sunak.
So Rishi Sunak has issues because people blame him for wielding the knife against Boris Johnson in the end, and also he has isolated some on the
conservative right.
The reason people are talking about a unity candidate is because the party is so fractured. So will it be a question ultimately of who was the most
popular with MPs or about where those other votes will end up going.
[15:10:01]
SOARES: So as we look at these three candidates -- Rishi Sunak and Penny Mordaunt. Well, we don`t know if they`re going to throw their hat in the
ring, let us just be very clear here, Boris Johnson, as you called him the blonde elephant earlier.
NOBILO: Yes. Completely moving any chances I have to interview him again.
SOARES: The likelihood of Boris Johnson making a comeback? Will that -- given everything, all the scandals, you know, the revolving door of chaos,
as the leader of opposition said.
NOBILO: So the rules of this leadership contest as they`ve been outlined today have severely reduced his chance of a political comeback at the
moment. That`s because the threshold is 100 MPs.
So Boris Johnson, some think would be able to command around 50 to maybe 70 MPs, but 100 is the threshold that he may well not be able to meet because
even though there has been an element of buyer`s remorse that we`ve seen within the party membership, things haven`t changed that much inside the
Houses of Parliament in terms of how Johnson is regarded since he left because they see it as he had so many opportunities that were squandered.
He had this historic election victory. He had the charisma that many other leaders, particularly his recent predecessor, Theresa May, had lacked. He
managed to unite voters that have never been united and knit together before by a Conservative leader.
And yet, by a series of unforced errors and hubris, many would say, he kind of threw it all away and that hasn`t changed, but he is the members`
favorite according to recent polling.
SOARES: And of course, what we we`ve heard here today, you need expediency, you need credibility, and you need a safe pair of hands.
Jeremy Hunt is not throwing his hat in the ring, we know that. He is the Chancellor.
The market seemed to have liked what they saw in the last couple of weeks. What`s the likelihood of him staying in? Likewise with Ben Wallace? How
important is that for the country right now?
NOBILO: Well, I think it would be a sagacious and wise thing to do for the next Prime Minister to keep him in post because the markets have
reacted, well, they don`t need any more instability, and if we think about the fact that Ben Wallace who has been considered to do a very strong job
as Defense Secretary remained in post despite the changing of Prime Ministers, because again, that element is so fragile. It`s a volatile
situation in Ukraine and with Russia.
We had a report earlier today as well, which Ben Wallace had to get involved in about a Russian missile landing near RAF -- airspace RAF plane.
So I think there may well be a good argument to be made to leave the Chancellor in place as well.
SOARES: Where does he -- is he a Rishi supporter?
NOBILO: Jeremy Hunt did back Rishi Sunak, yes. And I think given that when people talk about the challenges facing this country, they obviously
talk about the economy, but they also talked about Britain`s place in the world and Russia`s war in Ukraine. It would make sense, excuse me, to leave
those posts in place.
SOARES: And for our viewers right now scratching their heads trying to make sense of why we`ve got had three Prime Ministers, why can`t there be a
General Election? Just explain that to people because many people would think, oh, this is a quite undemocratic process this.
NOBILO: Sure, and that frustration is understandable. That was also legitimate because Liz Truss was not elected by the general population, and
yet she was disregarding elements of the Manifesto that had got Boris Johnson elected in 2019. So there was frustration there.
The reason why a General Election is not on the cards, unless the Prime Minister decides to call it is because in this country, a parliamentary
democracy, people vote for the party, they don`t vote for the Prime Minister on the ballot as such, whereas in America, for example, it`s a
presidential democracy, so people are voting for an individual. So it`s within the gift of the majority party inside the House of Commons to change
their leader as many times as they want.
But in reality, it`s all about who can command the confidence of the House of Commons and get legislation through and naturally a party that`s in such
disarray, that they`re changing leaders quite frequently, they may well not be able to do that and then that can leave a General Election and a fresh
mandate as the only option left, but the Conservatives know they face electoral annihilation at the moment, so that would be an absolute worst
case scenario.
SOARES: So they have to get this right. They have to get this right.
NOBILO: Yes. And that is why they`ve been using it to try and scare MPs into touch in a way to say, look, if we can`t unite behind a candidate, the
next thing is a General Election and a lot of you will lose your seats.
SOARES: Bianca, really appreciate it.
Well, the market, stock markets are up. Gilds have really shrugged off Truss` resignation and the economic damage though done is substantial.
We`ll look at the bruising 45 days for the pound, for bonds, for mortgage rates, that is next.
(COMMERCIAL BREAK)
[15:16:59]
QUEST: Welcome back to QUEST MEANS BUSINESS tonight. I`m Richard Quest in Istanbul. Isa is at the Houses of Parliament.
The markets and how they responded to the resignation of Liz Truss. Look at the numbers, it tells their own story. The FTSE gained, well, not a huge
amount, best part of a third of a percent, whilst the pound, now that`s a moving barometer. So that`s what it`s doing now, in a sense.
But in day trading today, it did get up to three quarters of a percent. In fact, it actually gained one percent at one particular point. But if you
look at the volatility over the last few days, there were low points after -- both after the initial budget, then you`ve got when the Chancellor and
you`ve got the press conferences.
As for gilts, they shrugged off the resignation. The 10-year UK bond, which is known is a gilt is steady at 3.88 percent. But as you can see, that is
seriously elevated compared to where it was before this whole crisis began.
Philip Shaw is with me. He is in London.
Philip, it`s going to take more than the resignation, apparently, of the Prime Minister to deal with this. So, what is it going to take? And can
rate come back down?
PHILIP SHAW, CHIEF ECONOMIST, INVESTEC: Yes. Hi, Richard.
The issue is, of course, that the UK government has lost credibility on fiscal policy with the markets and credibility is something that you can
lose really, really quickly. It`s much more difficult to get it back.
So the new Chancellor, Jeremy Hunt`s announcements on Monday morning, talking about the reversal of most of Kwasi Kwarteng`s tax cuts and saying
there are going to have to be either more tax increases or spending cuts or a majority -- or a combination of both, help to soothe the markets.
But markets actually want to see what is going to be in the budget on the 31st of October to be convinced that the UK has a sustainable fiscal
policy, and I think in short, that`s what it`s going to take.
QUEST: And even if they do get that, do things stay as they are and just don`t get worse, or is there the possibility and prospect that gilt yields
do come down?
SHAW: Well, there are two elements of higher gilt yields. One is the loss of credibility, which we`ve just talked about. The other one is, of course,
where do short term interest rates go? And the Bank of England has been raising interest rates, try and slow demand in the economy down to bear
down on inflation. Inflation is in double digits and that is compared to the target of two percent.
So, it is very likely that rates will have to continue to increase, but you know, with the sort of fiscal policy that we got from Kwasi Kwarteng,
markets were very concerned as we were that interest rates would need to go up to five perhaps six percent.
[15:20:02]
And now that fiscal policy is arguably more responsible and a little bit more restrictive, those interest rates won`t have to go up by quite as
much.
And so, if we`re talking about mortgage rates, for example, we`ve had two- year fixed mortgage rates about six percent.
The relevant gilt yields have been coming down, which suggests that in due course, those mortgage rates will ease off, and if we get more evidence
that fiscal policy is a bit more restrictive, then markets will be more convinced about the peak and interest rates being perhaps four percent,
rather than five percent.
QUEST: Does the market have a preferred replacement Prime Minister? Or is it a case of anybody but Truss?
SHAW: Well, I don`t think there`s a favored personality, I think what markets want to see is the appropriate set of policies, and it almost
doesn`t matter who delivers that.
And, of course, we`ve got a new Chancellor. I think markets are satisfied that Jeremy Hunt is doing a good job so far, you know, six days into the
job. And if he were to continue on that line, I think markets would be quite happy.
Of course, one of the problems is that the new leader will be in place by Friday, next week. The budget is a week on Monday. And you know, in theory,
it is possible that the Prime Minister could say to the Chancellor, well, hang on a sec, let`s delay the budget or change the Chancellor.
So there are uncertainties there, and markets are well aware of that, and they actually want to see the delivery of the policies before they say
okay, we`re a bit more relaxed about things.
QUEST: Philip Shaw, thank you, sir. Thank you.
Now, four British Prime Ministers, six years, and now soon to be number five. They`re all being Conservatives. They change whilst in office and
under the UK system, it doesn`t really matter how it`s done. You don`t have a General Election.
This is the second Tory leadership in three months, which isn`t a record something of itself. David Cameron, is the longest serving Prime Minister
of the recent five. By a mile he served from 2010 to 2016. Theresa May stepped in for three years. More recently, Boris Johnson. Johnson was in
power for three years. He only resigned over a month ago.
Now Liz Truss, gone after only 44 days.
David Morris is the Conservative MP for Morecambe in England, a beautiful part of the country, absolutely glorious in the sun.
David, so who -- let`s get straight to the to the ground over here. Who is your preferred candidate to be Prime Minister replacing Liz Truss?
DAVID MORRIS, BRITISH MEMBER OF PARLIAMENT: Well, I want a continuity candidate to be truthful. I can`t say who I want. However, it is out there
on social media before I had any Board meetings because I`m on the Board of the Conservative Party. So, I can`t actually publicly declare for a
particular candidate.
But from what I can understand from what I`ve seen on the news so far, I do believe there is Rishi Sunak thinking of running. I think, Penny Mordaunt
may be thinking of running, and Boris Johnson may be thinking of running again.
QUEST: Is it -- I mean, give me a gut feeling here. When you heard that Boris Johnson was thinking of running again. I mean, is this a case of "Oh,
my goodness. Surely not."
MORRIS: Not for myself, no. I was one of the Members of Parliament that stood and stayed with Boris right until the end. I didn`t want to see him
go. I was very upfront about that.
So, it wouldn`t bother me one way or the other if Boris came back, and I know from my constituents that I speak to, in fact, as I`m speaking now on
this phone, the e-mails in the background are coming up, people wanting Boris to return.
QUEST: So if we look, I mean, over the last 48 hours, I`ve seen comments from Conservative MPs, which basically said they`d never seen anything like
it, particularly the incidents in the House of Commons last night.
I guess the message has got through that if there were a General Election tomorrow, you as a party would be annihilated?
MORRIS: Well, we haven`t got a General Election on the horizon. We have actually another 18 months to go, and as your previous guest said, I
couldn`t see, but I could hear what he was saying.
The markets are starting to stabilize in the UK since Jeremy Hunt has come along. I was Jeremy Hunt`s campaign manager on two elections.
[15:25:10]
So you know, I`m very happy that Jeremy Hunt is there, and I do believe that irrespective of whoever the leader or the candidate to become Prime
Minister and becomes Prime Minister is, Jeremy Hunt will stay as Chancellor, he is not running.
QUEST: You see, the problem is that even if you get a stability candidate, and you have a half decent 18 months, won`t the electorate just
simply say, "Oh, my God, what did you put us through?"
What did this party put the country through? Were the effects of higher interest rates on borrowing because of the yield premium will be with us
for years? Isn`t that a justifiable criticism of the Conservative Party?
MORRIS: I think what the public will think of in the next 18 months` time is once the Ukraine crisis starts to pan out and we`re starting to see
exactly where we are and they start to see the markets rally up as we are seeing now, the public out there do realize that the cost of living, energy
crisis, come what may, you know, the prices of food and supply chains are actually increasing in the UK purely simply because of what`s going on in
Eastern Europe, in the Ukraine.
So it`s not just the UK that is feeling this pinch, it`s the whole of Europe and in fact, it`s going over to America. I know your viewers in
America will attest to this.
So I don`t think it`s necessarily what`s going on politically, and I don`t think in 18 months` time, people will remember very much about six weeks in
Parliament.
QUEST: So assuming for the purposes purely of this question, Mr. Morris, assuming that you were in opposition, and you had seen the government of
the day behaving like this, what would you have said?
MORRIS: Well, what I would have been doing if I was in opposition is instead of just keeping, you know, throwing stones at the opposition,
meaning the government, I would have been setting out -- and I was the leader of the opposition -- exactly where we would be going as a cure to
this crisis that we`ve got with the economy and the cost of living and all the problems we are facing.
But instead, all you hear is criticism. We`ve not heard anything from the opposition. In fact, they more or less agreed with the mini budget that is
causing all this controversy.
In fact, the mini budget wasn`t far different from what Jeremy Corbyn wanted to do. He wants you to go a little further albeit, but the actual
show -- so the academia surrounding the reasons of why the mini budget came out, the Labour Party lost.
QUEST: And final thought, I mean, by pure chance I happen to be here in Turkey tonight. I`m on assignment in Istanbul.
And you know, you talk to people here and we`ve heard it from elsewhere that the UK or the UK political system, the government is a laughingstock.
That the last 48 hours have shown scenes that nobody ever expected to see in a mature democracy, let alone the mother of all Parliaments.
So sir, I guess where does the buck now stop?
MORRIS: Well, the buck has stopped. The Prime Minister has resigned and we`re going to be getting a new Prime Minister by this time next week. We
may even have a new Prime Minister on Monday night. It could even be Boris Johnson again.
That is where we actually are in reality right at this moment.
QUEST: David Morris, very grateful sir. Thank you for your insight, as you say, you were the campaign manager twice for Jeremy Hunt, so you`re
well and truly in the thick of what the latest thinking is. Grateful for your help tonight, sir. Thank you.
QUEST MEANS BUSINESS tonight from Istanbul, as it so happens and from Parliament, of course, Isa is at Parliament.
In a moment Christiane Amanpour will be with us.
The UK`s standing on the world stage -- I alluded to what I was hearing here in Istanbul, Isa has been hearing from Italian journalists -- is
laughingstock too strong a phrase to use?
Good evening.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
SOARES: Welcome back, everyone. World leaders have been giving their reaction to the resignation of British prime minister, Liz Truss.
In a statement Joe Biden said that the United States and the United Kingdom are strong allies and enduring friends. And that fact will never change. I
thank Prime Minister Liz Truss for her partnership on a range of issues, including holding Russia accountable for its war against Ukraine.
He reiterated his views when asked by journalists, have a listen.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: She was a good partner on Russia and Ukraine. And the British are going to solve their problems. And
she was a good partner.
(END VIDEO CLIP)
SOARES: But in previous comments, the U.S. President had expressed skepticism over her economic policies, saying he thought that it was a
mistake. Well elsewhere, France`s president, Emmanuel Macron, has spoken out, saying that he hopes the U.K.`s political uncertainty will be over
soon.
(BEGIN VIDEO CLIP)
EMMANUEL MACRON, PRESIDENT OF FRANCE (through translator): France, as a nation as a people who are friends of the British people, wishes over all
for stability in the context that we know, which is a context of war, of energy tensions and bigger crises. It`s important that the U.K. quickly
regain its political stability. This is all I want.
(END VIDEO CLIP)
SOARES: Here in London, Mayor Sadiq Khan, who`s from Labour, spoke to Christiane Amanpour earlier, reacting to the Truss resignation. Have a
listen.
(BEGIN VIDEO CLIP)
SADIQ KHAN, MAYOR OF LONDON: Well, I`m not somebody who`s easily surprised or easily shocked. But I`m surprised and shocked. Just a few weeks after
Liz Truss became the Conservative leader and the British prime minister, we have the chaos we have seen over the last few days and weeks, leading to
her resigning today.
Keir Starmer is absolutely right. What we don`t want is yet another internal Conservative leadership contest with a another Conservative leader
becoming the U.K. prime minister -- more continuity austerity policies.
What we need, is for Liz Truss or whoever Conservative members choose to be the next leader, to give the British public the opportunity of voting for a
fresh start. If the direction was called, campaigning for it would be incredibly hard for the British public to vote for Keir Starmer and the
Labour Party.
[15:35:00]
Because we have some of the responses to the big challenges our country faces.
We are a laughing stock. Our reputation has been diminished every minute Liz Truss has stayed in office.
And people here this morning have been asking me, what is going on in your country?
On the one hand, you`re showing global leadership for London; on the other hand, your country is a laughing stock.
From the global south, listen, we used to look on the U.K. as providing certainty and calm. You`ve got the mother of all parliaments. We look to
you for moral leadership and we are a laughing stock.
Never have we had two leaders change in between general elections.
That`s why it`s so important in Britain, for the next Conservative leader to call a general election, because our constitution has never had
experience of successive change of leaders without a general election.
The second point to make is what do people want?
Businesses, families, the markets, they want certainty. They want calm. They want leadership which have a clear plan.
(END VIDEO CLIP)
SOARES: "A laughing stock," strong words from Sadiq Khan.
Christiane, it`s worth reminding our viewers that this political mess and chaos that we`re seeing, it`s very much self-inflicted by the Conservative
Party.
Picking up on what we heard there from the London mayor, what kind of damage, credibility, does it do to the U.K. on the world stage here?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, Isa, he was speaking to me from Buenos Aires in Argentina. There he was taking part
in a world summit of mayors. And they were talking about how to get a grip on the environment.
It`s important, even this government has suggested that they`re going to roll back quite a lot of the environmental regulations. And it all came to
a head in Parliament last night, over about whether to go ahead with fracking.
These are very important things but the notion of being a laughing stock, look, I even asked a former senior Tory MP and former minister, Alan
Duncan. He was on my program earlier. He agreed with Sadiq Khan, didn`t like that a Labour leader abroad was saying that, nonetheless agreed and
said, we have to get a reasonable and competent government back in place to lead this country.
They don`t think there`s going to be a general election, it`s a parliamentary democracy; it works slightly differently. They don`t have to
call them election right now.
And the hope amongst the Tories is that they can get somebody, who would be viewed as a safe and sure pair of hands to work in tandem with someone
who`s already viewed as a safe and sure pair of hands. That`s the chancellor who Liz Truss appointed when she ditched Kwasi Kwarteng, Jeremy
Hunt.
And they`re hoping that they can spend the next time, the rest of the time they have in office to stabilize this ship. And to an extent, they
stabilized some of the financial chaos. But not for the people of this country, who are still facing massive cost of living and this self
inflicted wound included raising interest rates.
That directly affects people`s ability to buy and to pay off their mortgages. So it`s very hard times for the people of this country.
SOARES: Incredibly tough times, as you and I have been reporting. I`ve spoken to many people up and down the country who are really struggling
between heating and eating. And with inflation rising, it`s a huge concern right now.
And picking up what you were just saying there, Christiane, Conservatives don`t want an election. If there was to be an election, according to some
of the latest polls we`ve seen, they would lose. They would lose. So give us a sense of the mood in the country right now.
AMANPOUR: The mood of the country`s exactly that. They want a change. The polls in the last week of the heightened chaos that we`ve seen that`s led
to Truss` resignation. It has shown two thirds of the people here considered that she was doing a bad job and needed to change leadership.
The way it gets stuck us, many, many people, including obviously all the opposition leaders, who want a general election and to get rid of this, as
they say, 12 years of Tory revolving door chaos and austerity, they want to see a change so they can put any mandate, for any kind of economic plan, to
the people.
This plan of hers was so incredibly radical and, as you all know, we`ve been reporting, it was really cooked up by her and the chancellor and it
avoided any kind of external expert scrutiny. Deliberately avoided it, turned down the offer before they put out their so-called mini-budget,
which then caused chaos.
[15:40:00]
They just turned down the idea of having those accountability experts actually give them the row testing they needed. This was the result. It`s
just wild.
The other thing Alan Duncan told me, this is vital, he believes that the level of expertise in the Truss cabinet, even going back to the Boris
Johnson cabinet, was simply insufficient.
These were not experts, they had very little if any governing experience. And they were mostly chosen, particularly by Liz Truss, based on loyalty to
her and her agenda; ideologues, if you like, first Brexit ideologues.
Now in this case libertarian ideologues in terms of the economy. He said, that needs to stop. We need to have competence at the top of this
government and the top of this country.
SOARES: And that says so much about the state of the party, how divided the Conservative Party is. Like you said, we need to steady the ship right now.
Let`s get more on this.
Christiane, we appreciate. It
Let`s get more analysis on what these developments mean for the whole of the U.K. Lauren McEvatt is a member of Independent Commission on the
Constitutional Future of Wales.
Lauren, great to have you. Christiane was talking about the importance of steadying the ship right now.
How important is that for the credibility of the Conservative Party and indeed the country as a whole?
LAUREN MCEVATT, INDEPENDENT COMMISSION ON THE CONSTITUTIONAL FUTURE OF WALES: It`s crucial. There`s no credibility at the moment. This is a truly
shocking state of affairs for our party. And there is an argument that our credibility is so poor that even having a general election, the argument is
that there`s a mandate for having another leader.
But after the credibility is this low, they said she has nothing to lose in trying again for someone new. But from the whole of the U.K. perspective,
the Conservatives obviously don`t poll as a majority party in Wales, Scotland or in Northern Ireland but they government as the majority of
Westminster, on behalf of United Kingdom.
That makes our international credibility in how we treat it very difficult.
SOARES: That`s such an important point for our viewers around the world to understand because many people have been left scratching their heads, how
is it possible we have a third prime minister, given the crisis we`ve seen.
It`s very much a crisis, self inflicted, a crisis of their own making. Correct me if I`m wrong, the straw that broke the camel`s back was the
mini-budget.
MCEVATT: I think that was one of the straws. I think that the whipping last night is really what did it for her, the spectacle in the lobby yesterday
evening, this cannot be --
(CROSSTALK)
SOARES: -- the fracking vote --
(CROSSTALK)
MCEVATT: -- ridiculous. The Labour Party put a giant bear trap on the road. (INAUDIBLE) with a large souvenir shop next to it, selling souvenirs. We
walk straight into it as a party, which we used to be better at, we used to not do. That
Her credibility is shot with her colleagues. She absolutely had to go. She was no surviving what happened yesterday evening. But whether or not our
party`s credibility could be built back will hang on who comes next.
SOARES: Let`s talk about that then. Still obviously we will know next week, who that might be, it`s quite a quick process given everything we`ve been
through, seven weeks or so previously.
Who do you think will be the top candidate here?
MCEVATT: On our best day, there isn`t a great deal of unity in the Conservative Party.
(CROSSTALK)
MCEVATT: It`s one of our underlying features. We`ve always been what we refer to as a broad church.
(CROSSTALK)
SOARES: Can you rally --
(CROSSTALK)
SOARES: -- rally behind the candidate?
MCEVATT: I`m hoping it`s Rishi Sunak. I that there are people that very much hope it is, particularly people who are very angry about him, I think,
Boris in the back in the way they perceive that he did. Boris Johnson is flying back from his Caribbean holiday right now.
SOARES: Do you know whether he is throwing his hat in the ring?
MCEVATT: My understanding is that he is. But I have absolutely no more to go on than anybody else in this town, which is a rumormongering cesspit.
SOARES: If he does go, if he throws his hat in the ring, what are the chances that you will get 100 votes or so?
MCEVATT: It`s very hard to tell. It`s febrile in the parliamentary party for Conservatives right now and it`s very difficult to understand how many
are going to want to back any candidate straight out of the blocks. And how many thing Boris Johnson may have a better chance with the country than
anybody else that`s up for leadership roster.
My gut is, as a sensible Conservative, I hope that Rishi and Penny Mordaunt in the end; what I fear is (INAUDIBLE) Boris Johnson and we accidentally
stumble into Boris Johnson being prime minister again.
[15:45:00]
SOARES: For our viewers watching this from around the world, how can it be Boris Johnson?
He was pushed out given the crisis of Partygate.
How can he possibly take back that spot again?
MCEVATT: We don`t operate a presidential system, however much he tried to behave as if we did.
SOARES: But just his behavior, exactly what he`s being accused of, how do you think that would help people feel up and down the country?
MCEVATT: I think it would be very bad thing for the country. But it is conceivable. In our current system it could work. We don`t elect a
president. We each elect a member of Parliament. And the largest party has a leader and that person becomes prime minister.
This is very much an internal process by the nature of the constitutional system we work with. One of those quirks is that Boris Johnson could find
himself back in the hot seat in 1.5 weeks.
SOARES: But your money is on Rishi Sunak?
MCEVATT: My money is on absolutely nobody. I don`t have any more after the last.
SOARES: That says everything there is to say about the state of affairs right. Now thank you. Really appreciate it.
Well, I think she said it. Turmoil the Tory Party. We look at how the Conservatives unraveled during an astonishing week in British politics --
over the last several weeks of British politics. That`s next.
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(COMMERCIAL BREAK)
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RICHARD QUEST, CNN HOST: Tomorrow is Friday. It might be Friday where you are already. But for Europe and where I am, tomorrow is Friday. And if you
think back, what a long week it has been.
It was only last Friday that Kwasi Kwarteng, the then Chancellor of the Exchequer, was fired by the then prime minister, well, she still is the
prime minister, Liz Truss. Jeremy Hunt was appointed his replacement as finance minister.
By Monday, Jeremy Hunt ditched Truss economics, basically getting rid of the majority of her tax cuts and said he was bringing in a budget on the
31st of the month.
By Wednesday, that age-old I`m not going anywhere and Liz Truss faces Prime Minister`s Questions.
[15:50:00]
(BEGIN VIDEO CLIP)
TRUSS: Mr. Speaker, I am a fighter and not a quitter.
(END VIDEO CLIP)
QUEST: The moment you hear those words, you know it cannot be long. Sure enough, within hours, the home secretary Suella Braverman, quit. She put
the boot in with a particularly stinging letter of resignation, basically saying, I`m doing what you should be doing.
In Westminster, there were ugly scenes as Tory MPs accused senior colleagues of bullying over a vote. Charles Walker said it was an absolute
disgrace.
(BEGIN VIDEO CLIP)
CHARLES WALKER, BRITISH CONSERVATIVE MP: I`ve had enough. I`ve had enough of talentless people, putting their tick in the right box, not because it`s
in the national interest but it`s because it`s in their own personal interest to achieve a ministerial position.
(END VIDEO CLIP)
QUEST: Today Liz Truss has resigned. With me is Luke McGee. His latest article on cnn.com, he`s our U.K. political editor. He says Liz Truss`
resignation leaves the party in tatters and a nation in despair.
It`s one of those occasions, where no matter how strong the language, I even find this broadcasting tonight, it is not strong enough to really say
the shock and horror of what`s happened.
LUKE MCGEE, U.K. POLICY AND POLITICS EDITOR, CNN DIGITAL: Yes. It has been bad for a very long time. I think things that have happened over the last
few weeks with the mini-budget, crushing the pound, to the political turmoil around Liz Truss, it has been quite remarkable to watch.
Today, it`s, been I can`t think of many days like it in modern British politics, where we had a prime minister yesterday, saying they`re a fighter
and they`re going to stay on and it was just a really somber -- it wasn`t like the day Boris Johnson went.
I was on Downing Street when she resigned. It was a really somber sort of sense of sadness. It doesn`t feel like -- there is turmoil, obviously but
kind of feels that everything is falling apart when you`re this close to it.
QUEST: And could she ever have survived?
I`m thinking of the disastrous press conference after Kwasi Kwarteng resigned.
Was it ever possible for her to pull this back?
MCGEE: I think it was possible that she could`ve hung on for a little bit longer. But I think it was basically her entire agenda, her entire platform
she stood on as leader, fell apart in a matter of weeks.
When your credibility is that shot, how can you possibly come back?
No, I don`t think so. I think with the team around her wanted to do was for her to stay on to keep stability in place. But no, I think for it to
unravel that fast, there was no hope.
QUEST: Everybody is fascinated at the prospect of Boris Johnson. Our previous guest basically says she understands he`s going to stand again.
What is your understanding?
Does he have any realistic possibility of getting it back?
MCGEE: I thought you might ask about that. So my understanding is, I was told by allies of him who worked on his 2019 campaign, that they`ve been
talking to him. They have been lobbying him. They`ve been making the case.
They`re saying the parliamentary majority is his majority. He has the mandate essentially.
I think the problem that he has is this shortened leadership process. You need to get 100 votes. We just don`t know how popular he is with MPs. You
know, 100 MPs might be the ceiling.
So despite what people think, Johnson is not someone with a great sense of humor about himself. He takes himself incredibly seriously. He won`t want
to do it if he thinks he`s going to be embarrassed. But I suspect, if it goes to the members, he would be the favorite.
QUEST: We all know what happened last time that happened. Luke McGee, thank you very much. Luke is definitely always worth reading on U.K. policy and
politics. Thank you, sir. I`m grateful.
Before we take a break, I wanted to show you the markets. We are QUEST MEANS BUSINESS and we should show you at least how we`re going to end on
Wall Street tonight.
There is the triple stack, the big board that gives you an idea of what the markets are. Doing nothing at all in terms of the. Dow middling for the
S&P. The Nasdaq, it`s all trading, it`s all trading sideways ahead of Fed potential decisions coming up.
[15:55:00]
QUEST: We will take a "Profitable Moment" after the break. QUEST MEANS BUSINESS.
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(COMMERCIAL BREAK)
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QUEST: Tonight`s "Profitable Moment": last week, Liz Truss looked rather down and depressed as she held her press conference. Today, as she
resigned, she looked wretched. No one takes -- I didn`t take any pleasure from seeing a politician who has striven so hard to be baled and thrown out
in quite such awful circumstances.
But she did bring this upon herself. The truth is, the policy that she put forward, one of total growth, growth at all costs, growth regardless of
deficits, regardless of markets, well, it`s not surprising that, when you take that policy, which is a contrarian policy to everything.
And this isn`t about being against growth. This is about recognizing the right policies at the right time, targeted assistance for those most
vulnerable, who are hit by inflation and higher energy prices, making sure the social welfare net is well stitched to protect people.
But, no, this was going to be anything and everything for all, except of course it wasn`t. The markets didn`t like it. The markets gave their
verdict. She tried to stay and she couldn`t.
The moral of this for other countries is simple. You will be punished if you don`t follow a reasonably orthodox plan, go too far outside the box and
you will find the box collapses around you.
And that`s QUEST MEANS BUSINESS for tonight. Isa and I will be back after the break. Whatever you`re up to in the hours ahead, I hope it`s
profitable.
END
