Theresa May Comes Out Fighting Amid Political Turmoil; EU Reacts to Brexit Draft Deal; May Defends Brexit Deal as In UK’s National Interest.
<Show: HALA GORANI TONIGHT>
<Date: November 15, 2018>
<Head: Theresa May Comes Out Fighting Amid Political Turmoil; EU Reacts to
Brexit Draft Deal; May Defends Brexit Deal as In UK’s National Interest.
Aired 2-3p ET - Part 2>
<Sect: News; International>
<Byline: Hala Gorani, Nic Robertson, Bianca Nobilo, Erin McLaughlin>
<Guest: Joey Jones, Sir Robert Neill, Peter Bone, Katie Perrior, Shailesh
Vara, Jonathan Portes >
<High: May’s cabinet contains those who want to leave the EU and those who
want to remain.>
<Spec: UK; EU; Brexit; Theresa May; British Parliament; Politics; Trade;
You were telling me you were the first resignation.
SHAILESH VARA, BRITISH CONSERVATIVE MP: Yes, I was. It was about seven, 25 --
GORANI: You’re a remainer.
VARA: I voted to remain but I have to say if there was another referendum now, I would vote to leave. I would.
GORANI: Really? Why is that? Because oftentimes, I hear that when people changed their minds, it’s in the other direction. In this case, you would change your mind to leave. Why?
VARA: Absolutely. Well, I have to say, initially when I had to decide, I could have gone either way. But on balance, I opted to remain. But after seeing the negotiations, as they have evolved over the past 18 or so months, it is clear to me that really, we are better off doing our own thing.
If you look at the way that the U.K. has been treated by the European Union, the fact that they’ve insisted at the outset that it had to be their agenda. They’ve insisted that, you know, they have to sort out the money aspects first, the 39 billion pounds.
And then despite the United Kingdom making concessions, we, for example, said that there would be certainty of residency for the three million plus E.U. since living here. They didn’t do the same for the one million plus U.K. citizens living in their country.
GORANI: But in this grab deal, it appears as though there are some provisions made to ensure that people who live in the U.K. or in the E.U. Yes.
VARA: They’ve done that -- no. But, you know, the way it has been extracted from them, we made that concession a long time ago.
GORANI: But it’s a negotiation. I mean, The E.U. is negotiating, it’s playing hard ball. And why wouldn’t it? You have a member state that wants to leave. They don’t need to make it easy on that country.
VARA: But the way they treat to the British parliament in Salzburg, that’s not the way that --
GORANI: Were they ignored her when she was with --
VARA: They did a lot of things which you don’t do to your fellow European leaders, you wouldn’t do to any country leader.
GORANI: You could argue Donald Trump disrespected Theresa May in a phone call this week and yet, still the U.K. wants a close relationship with the U.S.
VARA: Well, I think we all agree that Donald Trump is perhaps a unique individual in terms of how he deals with all sorts of individuals the heads of state down to ordinary people.
GORANI: Where do we go from here? Because the British prime minister is resilient. There’s no doubt about that. She may face a vote of no- confidence, but it’s possible that the conservative party will say, we don’t want to risk ousting her right now because it could mean more trouble down the road.
At that point, she’s kind of won, right?
VARA: For me, this has never been personal. It’s been about the individual, it’s about the proposal that’s been put on the table. We have 585-page document. It is making proposals which I think would be fundamentally bad for the United Kingdom. And I think it’s important to say what those issues are.
Basically, the deal on the table says that the United Kingdom would be bound in customs arrangement with the E.U. And would be bound by rules of over which we have no say. And if we wanted to leave that customs arrangement, we can’t do it unilaterally. We have to follow a particular process and ultimately a third party arbitration system does it.
Now tell me if the people of the United Kingdom said they wanted sovereignty and they didn’t want the hand of another -- the hand of the E.U. over it, what is sovereign if we are going to be but we can’t leave the customs arrangement without going to an arbitration panel?
GORANI: You spoke with Theresa -- obviously you -- did you have an opportunity to speak with her face to face?
VARA: I didn’t take up the opportunity as a member of parliament. I have no doubt that she would have seen me. But I’ve made up my mind and I was convinced that basically she would simply reiterate arguments and try to persuade me not to go.
[14:35:04] But I’ve been in this long enough, as you mentioned in the introductory passage and I’m very fairly familiar with what’s been happening as many people are. And so I didn’t think it’d be a worthwhile in size until I resigned. And I’ve sent my letter.
Shailesh Vara, thank you so much for joining us on CNN.
VARA: Thank you.
GORANI: We appreciate it.
A quick look at how markets are reacting. The British pound lost quite a bit of ground in the first few hours of the trading day, is currently down almost two percent, at 1.2745. And U.K. bank stocks are also not doing too, too well. Anna Stewart is watching markets for us. Anna.
ANNA STEWART, CNN CORRESPONDENT: Yes, we could see the anxiety just before the prime minister’s press conference. That was when you saw Sterling drop by two percent. The biggest drop we’ve had today. It’s come up a little bit, but actually still under pressure, to be honest.
Now, in terms of context and the whole Sterling story, it was actually down to $1.26 in August. It was down $1.20 last year. SO it’s not at the lowest we’ve seen. But I’d say in terms of a daily drop, it’s pretty significant.
Now, Hala, you did mention these banking stocks. What’s been really interesting is the stock market impact we’ve had. Usually, Sterling forces much as it has, you would expect the FTSE 100 to rise because most today’s companies make their profit in dollars.
However, this afternoon, some of the sectors are more domestically exposed like banking also like retail, home builders, were not so badly that actually drag the whole index into the red, FT-100 did close down somewhat flat by the end of it. But some of the bank stocks I’ve mentioned, RBS, British Bank, that lost nearly 10 percent at the end of the day, which means actually why $3.6 billion off its market cap. Hala.
GORANI: All right. Thank you very much, Anna Stewart for that. And bank stocks didn’t do too well either.
Apology for chaotic situation here. Not chaotic, I shouldn’t say that, but we’re setting up guests and saying goodbye to some guests and welcoming others including Professor Jonathan Portes who’s a professor of economics and public policy at King’s College London.
Let’s talk a little bit -- when I speak to Brexiteers and those who support the idea of exiting the E.U., they always say look, it doesn’t matter even if we leave without a deal because we do -- we trade goods and services with the U.S., with WTO rules. What’s the big deal? We just become any other third country. What would you say to that?
JONATHAN PORTES, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, KING’S COLLEGE: Well, the problem is, of course, that’s absolutely right. And over time, we could adjust to trading with the rest of Europe on WTO rules. But you have to remember that the infrastructure has grown up around the single market.
People of companies have supply chains that depend on frictionless trade. The Dover Calais route has (INAUDIBLE) for doing the sort of checks that we do on things that go in between the U.K. and the U.S. through other routes.
So the idea that there wouldn’t be very substantial temporary, at least --
GORANI: But they would be temporary?
PORTES: Well, temporary depend -- we don’t know how long it would be. Would it be weeks, months, perhaps years? It takes a long time to create a customs infrastructure from nothing and we’ve really hardly started. That’s one aspect of the trade aspect.
The second aspect is that the E.U. is not just about trade, it is a whole legal and regulatory apparatus. That we have become embedded in. And, of course, planes can fly between the U.K. and U.S. as they do now without us being single market with the U.S.
But planes flying between the U.K. and the rest of Europe, under rules that are said as part of the E.U. That will just vanish.
GORANI: It’s unraveling this entire infrastructure that has been the basis and the foundation of the trade relationship that could take years and be damaging.
GORANI: But have you had an opportunity -- I know it’s on 600 pages almost. But have you had an opportunity to look at this draft text and would it keep in place as some have said the customs area, the customs rules but it wouldn’t give the U.K. the ability to influence those rules?
PORTES: That’s right. It would effectively keep us within the E.U. Customs Union for goods so we would have the same tariffs and the same external trade rules as the E.U., essentially for the indefinite future. So that would have the advantage of it wouldn’t remove the frictions of the borders, but there’s all these other regulatory issues, but it would substantially reduce those frictions and it worked disruption.
But it has the downside that it means that doing trade deals with the rest of the world. I mean, we’re not going to be getting chlorinated American chicken anytime soon under these rules.
GORANI: Well, I’m not sure this would be a huge disappointment for a lot of people in this country, but what about financial services? Because that is a huge industry in this country. And access to European banking markets is a big, big must for some of these banks. Some of the banks have made contingency plans to move staff and even in some cases office space and headquarters to other countries.
[14:40:02] PORTES: So for financial services, it’s a mixed bag. The plus side of the withdrawal agreement is that we have this day of execution, we have this transition period where absolutely nothing changes until December 2020. So they don’t have to rush to do anything necessarily.
But the disadvantage is that this agreement says nothing about the future relationship on financial services. In the political, the nonbinding political declaration, there’s some vague words about doing our best to secure equivalence, so there is some form of mutual equivalence rules for financial services. But that’s a blank postdated check that we don’t know whether it will ever be cashed.
GORANI: And lastly the movement of people, she’s saying that’s it, the free movement of people is done, but there are provisions for guaranteeing the status, I mean, from what I’ve read, of E.U. citizens who already live in this.
PORTES: That’s correct. So the withdrawal agreement, and this is a big deal, would protect largely not entirely, but mostly the position of the three million or 3.5 million Europeans living here and the million or so Brits in Europe. If there’s no deal, those people are -- they won’t become illegal immigrants overnight, but they will be, to some extent, thrown into limbo. There’ll be question marks over their future. And that’s a big worry for them, obviously.
GORANI: Well, thank you very much, Professor Jonathan Portes. Appreciate it. Really appreciate having you and clarifying some of these points. Especially for our viewers who live abroad. One of the main questions is always, what are my rights if I live in the U.K. and I’m an E.U. citizen? Thanks so much.
Members of parliament had a chance to question Theresa May’s plans earlier and they certainly questioned those plans lawmaker after lawmaker hammered her. Take a listen.
All right. We do not -- we do not have that sound. We’ll try to find that for you la little bit later.
Still to come tonight, we turn to other world news. In Saudi Arabia, prosecutors revealed the kingdom’s official version of Jamal Khashoggi’s death confirming some disturbing details of the journalist’s murder but not everyone is convinced. We’ll be right back.
GORANI: Saudi prosecutors are reviewing grisly details of the murder of the journalist, Jamal Khashoggi, as they vow to seek the death penalty against five of the 11 suspects in the case. They say Khashoggi was injected with a deadly dose of a sedative after he entered the Saudi consulate in Istanbul, then his body dismembered.
Prosecutors say that that was not the original plan and insist the Saudi Crown Prince had nothing to do with it. Now, the United States responded quickly to the statement announcing economic sanctions on 17 Saudi officials.
Let’s get more now from Sam Kiley in Abu Dhabi and Elise Labott in Washington.
So, Sam, what are they saying, the Saudis, that these were just rogue assassins that decided to kill one of the most prominent royal family critics -- Saudi royal family critics, without any instruction from above?
[14:45:16] SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hala, that’s exactly what they’re saying. They’re repeating this term rogue element, that was what Adel al-Jubeir said, he’s the Saudi foreign minister, after the prosecutor spokesman had given his delivery of the narrative of what happened.
So the insistence is going back, if you like, to the point made very early on by none other than Donald Trump that his view was that some kind of rogue element had done this.
Essentially, if I outline to you, Hala, what the prosecutors’ model is, if you like, the Saudi position is that General al-Asiri, who is the deputy head of intelligence in Saudi Arabia gave an order that Mr. Khashoggi should be persuaded to return home and if that didn’t work, should be made to return home.
A team was dispatched to Istanbul to achieve that on the ground, according to the Saudi prosecutor. The chief negotiator decided, without reference it would seem, to Riyadh, without reference to the royal court that that wouldn’t be possible in terms of a rendition, and that he should be killed if he wouldn’t return home.
There was then a struggle according to the prosecutors during which he was injected with a fatal dose of a sedative, dismembered and then his remains handed over to an unknown Turkish collaborator. The only detail on the collaborator that has emerged is that there is now a sketch that has been provided by the individual who allegedly handed over the body.
Still no name, which seems to me extraordinary that one would have a collaborator to whom one would could hand a body but not know his name. Nonetheless, that is the Saudi position. And ultimately, this is really a narrative that has been around for some time. And I know we’ll hear a bit about that no doubt from Elise.
But I think ultimately what this is really trying to do, Hala, is put a firewall between the perpetrators of the act and any suggestion that it was ordered, that the murder, the premeditated murder, which is how it’s now described by the Saudis, was ordered by anybody external to the team on the ground. Hala.
GORANI: All right. And, Elise, the U.S. is imposing sanctions on individuals, 17 individuals. Do we know who they are and what type of sanctions?
ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, a lot of them, Hala, are part of the 18 that the Saudis originally -- combination of detentions and arrests. Many of them ministers, deputy ministers, loyal to the -- members of the royal court. Very similar to the list that the Saudis have been putting out there including Saud Qahtani, the former advisor to the advisor to the Crown Prince who had a lot of dealings with Jamal Khashoggi over the years.
These are a kind of second tranche of sanctions. The first one was a couple of weeks ago under the Immigration and Nationality Act. Now, this is under the Magnitsky Act, which is a global sanctions regime -- it was originally created for Russia. But now against violators of human rights and it’s anything from travel bans to freezing assets.
What’s very interesting here is those other sanctions were very easily imposed, the bar and the conditions weren’t very high. These sanctions call for a completed investigation. And so that would suggest that the United States has completed its -- or is close to completing its investigation and is pretty close to wrapping up what they think is responsible.
As Sam said, I think it’s pretty clear that the U.S. is willing to -- or by the narrative or believes itself that Crown Prince Mohammad bin Salman did not give the order.
GORANI: So this is it then, Elise? This as far as America will go?
LABOTT: I think that’s as far as the administration is going to go. Now, we know that Congress, many members of Congress, have called for tougher actions against the Saudis. There was -- we’re discussing there was a lot of concern about the Saudi government and Mohammad bin Salman. Not just about this. This, I think, was maybe one of the final straws.
But there was concern about actions in Yemen. And so I think Congress could work on denying some of those arm sales to Saudi, not approving those type of arm sales. I think that’s where Congress is really going to have the input here.
I think President Trump, Secretary Pompeo, the administration has made clear that it doesn’t want to sacrifice the strategic relationship with Saudi Arabia by going down the road of punishing the government itself.
[14:50:06] GORANI: Yes. And, Sam, lastly, we obviously -- we don’t know - - I mean, does this mean the loved ones and the family and the fiancee of Jamal Khashoggi will never get a body to bury? What are we to make of these statements that the Saudis are conforming that there was dismemberment and all that other terrible grisly level of detail that we got today?
KILEY: Well, this is -- in fact, the Khashoggi family is going to be holding a kind of a memorial service, if you like, tomorrow in prayers, during Friday prayers inside Saudi Arabia to, in a sense, try to give themselves some kind of closure to this. There’s no formal funeral because there is no body. This is a position or an aspect of the case that the Turks are pretty incensed about as indeed, one can imagine are the family.
But Saudis, for all of their protestations and cooperation, for all of their insistence that they handed over the body to a collaborator, they’re unable to identify this collaborator, won’t say what happened to the body, have not allowed the search of the drainage system underneath the consul’s residence inside Turkey. And therefore at the moment, it is still a matter of speculation as to what actually happened to Mr. Khashoggi’s remains.
But on top of that, you also have a situation in which there are five people that the Saudis have identified that could face capital punishment for this crime. And as far as the Turks are concerned, that is just not good enough. They want to be able to conduct a prosecution inside their own country, hear all the witnesses and really flush out exactly what happened here.
That said, they haven’t ultimately either presented all of the evidence that they say they have, notably a number of audiotapes that relate to this whole case. Hala.
GORANI: All right. Sam Kiley in Abu Dhabi and Elise Labott in Washington, thanks very much.
Updating a developing story now, high profile American attorney and potential presidential candidate and lawyer to porn star Stormy Daniels, Michael Avenatti, was released on bail after he was arrested on suspicion of domestic violence.
So I mentioned Avenatti is the lawyer for porn actress, Stormy Daniels, who sued U.S. president, Donald Trump. He says the accusations are fabricated and meant to harm his reputation. Avenatti says he’s confident that he will be fully exonerated.
CNN’s MJ Lee is following that story for us. She’s live in New York. What’s the very latest on this case, MJ?
MJ LEE, CNN NATIONAL POLITICAL CORRESPONDENT: Well, you know, there’s still a lot that we don’t know, even though we know that he was arrested and then he was released on bail, as you said. We don’t actually know the details of what actually happened. Was there an altercation? What kind of an altercation was it? And if there was one, who actually was involved?
There was an initial report that said that this was involving Michaela Avenatti and his wife from whom he is currently getting divorced from. I spoke with his wife just last night and she said that that was absolutely not true. So it seems to have involved somebody else.
Again, if there was such an altercation. But we don’t know the details of what happened. But as you laid out there, Michael Avenatti is out there saying very confidently that these are bogus allegations and he expects to be fully exonerated. Obviously, this is going to be an ongoing situation and an ongoing investigation for the L.A. Police Department.
GORANI: All right. MJ Lee, thanks for the update.
A quick break. We’ll be right back. Stay with us. We’re coming to you live from London.
[14:55:24] GORANI: Another day of high political drama as Britain hurdles toward Brexit. Prime Minister Theresa May is standing defiant telling all of her detractors that she is not going anywhere and will see Brexit through. Here’s a reminder of what she said just a few hours ago.
(BEGIN VIDEO CLIP)
MAY: This deal delivers what people voted for and it is in the national interest. And we can only secure it if we unite behind the agreement reached in cabinet yesterday. If we do not move forward with that agreement, nobody can know for sure the consequences that will follow. It would be to take a path of deep and grave uncertainty, when the British people just want us to get on with it.
(END VIDEO CLIP)
GORANI: Will Theresa May’s defiance make a difference? A slew of resignations kicked the day off and many members of her own party are now calling on her to quit.
Now, in parliament, it has to be said, Theresa May took it and she took it from all sides, from members of her own party, from the opposition, from members of parliament from the DUP, the Northern Ireland Party.
Listen to what happened, just a snippet of what happened in parliament today.
(BEGIN VIDEO CLIP)
STEVE BAKER, BRITISH CONSERVATIVE MP: This backstop is completely intolerable and I feel confident that even in the unlikely event that legislation before it reach this is House, it will be ferociously opposed.
MARK FRANCOIS, BRITISH CONSERVATIVE MP: The stark reality, Prime Minister, is that it was dead on arrival at St. Tommy’s before you stood up. So I plead with you. I plead with you to accept the political realities of the situation you now face.
PAT MCFADDEN, BRITISH LABOUR MP: Is it not the case that far from taking back control, this is the biggest voluntary surrender of sovereignty. It’s time to think again.
JULIAN LEWIS, BRITISH CONSERVATIVE MP: Can the prime minister describe any surer way of frustrating the referendum result and ultimately remaining in the European Union than to accept a Hotel California Brexit deal which ensures that we can never truly leave the E.U.?
(END VIDEO CLIP)
GORANI: Thanks for watching. In fact, stay with us, because I’ll see you after the break. There is more breaking news coverage ahead. Stay with us.
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