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UK Votes to Leave European Union. Aired 4-4:30a ET

Aired June 24, 2016 - 04:00   ET

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


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[04:00:28] RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Well, answer to that, in or out, the decision has been made. The U.K. is out of the European Union. At least that's the way the vote went tonight in the referendum.

A very good day to you. Welcome to our coverage of the E.U. referendum decision. I'm Richard Quest.

HANNAH VAUGHAN JONES, CNN INTERNATIONAL CANCHOR: I'm Hannah Vaughan Jones with you at the dawn of a new era for Britain, also for the European Union, of course, and far beyond our shores.

The British people have voted to leave the E.U.

QUEST: And it was a vote, a 3.78 majority if you like on a poll of 33 million people. It's a defining day in the U.K.'s history. And David Cameron, the prime minister, says he will stand down as prime minister after voters chose leave, ignoring his advice to remain in the European Union.

JONES: David Cameron was speaking just in the last hour outside number 10 Downing Street. He was there in these pictures and on your screen to try and calm the markets as well. But we didn't necessarily expect him to go. We were just waiting to see what he would say in order to try and calm all the fears.

Let's just listen in now and have a listen to what the prime minister said a short time ago.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: The country has just taken part in a giant Democratic exercise, perhaps the biggest in our history. Over 33 million people from England, Scotland, Wales, Northern Ireland and Gibraltar have all had their say. We should be proud of the fact that in these islands, we trust the people with big decisions.

We not only have a parliamentary democracy, but on questions about the arrangements for how we're governed, there are times it's right to ask the people themselves, and that is what we have done. The British people have voted to leave the European Union and their will must be respected.

(END VIDEO CLIP)

QUEST: The prime minister's spoken. We've had leaders across Europe now speaking. There seems to be a common theme. The Italian Prime Minister Matteo Renzi has said, "We have to change to make t European Union more human and more just, but Europe is our home. It is our future."

Jeroen Dijsselbloem said, the most important -- he's the head of the Eurogroup, as well as and finance minister said the most important thing now is to provide stability for the Eurozone.

The Swedish prime minister in Stockholm said the Brexit vote is a wake-up call for E.U. The bloc must show it can respond to people's expectations.

So, arguably, too little, too late. Across the board, leaders now are saying that, quote, "something must be done."

JONES: The surprise of the morning, not least the fact that Britain voted out of the European Union but also the fact David Cameron, the British prime minister at the helm, the forefront of the remain campaign, he has now said he will step down. He'll resign as prime minister and someone else should be in place in around three months time, the conservative party conference, the autumn conference season coming up in October. So, interesting to see who takes over at the helm of this ship.

QUEST: To Downing Street, CNN's Max Foster is there for us this morning.

Max, you've never seen anything quite like that today, have you?

MAX FOSTER, CNN LONDON CORRESPONDENT: No. As soon as the doors shut we had the odds out from betting companies already putting Boris Johnson as the favorite to take over as David Cameron, extraordinary scenes here. And we need to keep an eye on things here. If David Cameron goes, one would assume that George Osborne, his number two, may go this morning as well.

Also, I have to say, within the Labour Party, huge amount of pressure on their leader, Jeremy Corbyn, also supporting the remain campaign, can he last a day as well? He's only recently come into power, a controversial figure and seen not to have handled the whole remain campaign very well. Didn't really galvanize that Labour Party support in the way he should have.

But extraordinary moment when David Cameron came out, though. We thought, you know, he would come out and reassure the markets and perhaps resign a bit later on. Obviously, the pressure was so high on him, so heavy on him that he had to come up with some other solution.

The only other solution was for him to resign. So, he fell on this sword, very clearly saying this referendum was his idea. [04:05:01] He fully backed it. He fully supported it, and he had to

fall on his sword. An extraordinary here, and all those international repercussions coming on the back of it.

QUEST: Max, obviously everyone looks at Boris Johnson as potentially, and I see the bookies now saying he's the favorite. But how -- I mean what timeline?

The prime minister says he's put -- let me find his exact quote. "It's a period of stability. The ship needs to be stabilized but it's not right to be the captain to the next destination."

So what happens over the next two to three months up to the October meeting, October conference?

FOSTER: I think all those conservative leaders on the leave side are jockeying for position. Who will they promote as the leader? Will it be Boris Johnson? It could be Michael Gove.

But also Theresa May who backed the remain team on this one. She's also still seen as a front-runner which surprises me. I thought she'd also be expected to resign as well. But she's been the back seat. David Cameron very much at the front.

We head towards the Tory Party conference in the autumn, and that's when David Cameron will step down and then we'll have a clear picture about who the party wants. This is a party that's broken, the Conservative Party. David Cameron tried to fix it because it split along pro-European, anti-European lines. He tried to fix it with this referendum.

But you could argue that he's just exacerbated the problem because now people are more firmly entrenched in the idea that they are pro or anti-European. We're going to see a huge amounts of logistical and economic problems in the next three months and that's going to be a hard thing to heal.

Whether or not you believe in the philosophy, that Britain should come out of the European Union, behind the scenes quietly, even during the campaigns, the leaders were saying you have to accept there's going to be a period of turmoil as we get used to the idea and start trying to extricate Britain from the European Union.

So, there's going to be pain if there's going to be any gain in the long term.

JONES: Max, good morning to you. It's Hannah in the studio here. Extraordinary scenes, of course, around you in Downing Street. We've got live pictures from Boris Johnson's home in London as well. Everyone waiting to hear from him as the leader of the leave campaign.

We've only heard from Nigel Farage so far. But just explain to our viewers if you can, Max, the relationship between Boris Johnson and David Cameron. They've known each other for years. They went to school together, to university together, and now, it looks like these two foes, friends and foes could now be replacing each other in their roles.

FOSTER: Yes, effectively, Boris Johnson was very much backed by David Cameron. He stepped out of that when he decided to run in the opposite campaign. He decided to head up effectively, if not officially, the leave campaign.

So, he took on David Cameron and what you'll hear from people in the Conservative Party and also in the Labour Party is that perhaps Boris Johnson was from the very start of this jockeying for a position in 10 Downing Street. We can't confirm that. He says he believes in the Brexit and he's going to say that today when we hear from him.

He certainly had a successful campaign by definition, came under a lot of criticism. But the key players in that campaign around him were Michael Gove. So, he's going to be locked into discussions with them, as we speak, and they're going to try to work out a joint position, if you like. It effectively created a new sort of political movement amongst themselves.

So, if they can agree who they're going to put forward, probably Boris Johnson, then we can move forward and hopefully some sort of orderly transition, because what this country doesn't need is yet more political instability on top of all the market turmoil we're seeing this morning.

QUEST: In the Downing Street, thank you.

We do have a picture of outside Boris Johnson's home. It's a bit crackly and noisy but there it is. When Boris Johnson, former editor and -- well, columnist for the "Spectator".

JONES: "Spectator Magazine", yes.

QUEST: Had a very colorful life which I seem to remember has also involved his personal life being very much in the news.

JONES: Speaking about his personal life. It's interesting his father, his sister, all the close members of his family voted on the opposing side of him in this referendum. They all voted remain, whereas he obviously succeeded now in vote leave campaign.

He's always had huge political ambitions. He's always been known for that. And he was just a couple of years ago very vocal saying that he thought the European Union was a very positive part of British cultural life and that we should perhaps stay. And he's obviously had this huge role reversal now and now finds himself at the very, very helm of British politics. Interesting what he says about that in the next couple of minutes.

QUEST: Before we look at the markets, it is probably worth us reminding you of the -- of the nature of the decision.

[04:10:08] If we show you the map of the United Kingdom, you get a chance to see there just how split the country is. And you have Scotland which went fully remain. JONES: Yes. And then you look at Wales. This is what many people

found very surprising indeed. Wales was very much on the leave camp, which with a huge public sector and the fact that Wales gets so much as well funding from the European Union. Many, many people will be surprised that the Welsh turned out in force for the leave campaign.

QUEST: And then you go to Northern Ireland. And Northern Ireland went remain.

But you start to look into main heartland England. Start with the northwest. I'll take you across the country. You go from the northwest of the -- sorry, the northeast of the country and then to the northwest and you work your way down the country. The west midlands and you see again more and more places, this sea of red. Out to the east of England, a total sea of red.

JONES: Except for London, of course.

QUEST: We'll come to London at the end.

The southeast of the country is virtually -- a little more blue. And then you go to London and the heart of London is blue with Basildon on one side and I forget the one left on the other side. Only three sections of London's 32 boroughs actually voted to stay.

So, put it all together and you see that effectively, the England, Scotland, Ireland and Northern Ireland and Wales, the four members very different views on what was going to happen last night.

JONES: Not just geographic split. Demographic as well. If you look at the ages of people voting and the way they were voting as well. I think it's something like 18 to 24-year-olds, over 70 percent voting to remain within the European Union, and as soon as you get into the pensionable age, 65s and over, the majority of them voting to leave as well.

QUEST: The fallout from the financial markets this morning has been severe, the results unmistakably leading to the pound free-fall. At one point, it was down some 13 percent. It slipped to its lowest level since 1985. I think 1.33 was the lowest level. We firm back up quite a bit at 1.37 overall so far.

And if you look in the European stock markets, those early opening numbers were grim. There's no other word for it, down some 10 percent at one point in Frankfurt. They've all pulled back in the last hour. Hardly cheerful by any stretch of the imagination, but possibly because of what the governor of the Bank of England said.

JONES: Yes, and he was speaking just a short time ago, unprecedented speech really to the British public as well. Let's listen in to what he had to say to try and calm markets around the world.

QUEST: Not sure we have the governor. Nina dos Santos is in London's financial center, the city on the trading floor. How -- what did they make of the governor's words. NINA DOS SANTOS, CNN MONEY EUROPE EDITOR: It was pretty much what was expected here, wasn't it? A lot of people knew already because the bank governor hinted at it already. He did warn the British people it was going to have some serious consequences for the economy. He reiterated those politely in his statement earlier today.

A lot of people knew already he was going to say the Bank of England stands ready to provide liquidity to the market. It just didn't know how much he stood ready to provide. Now, we have a figure on that. It's 250 billion pounds, he said, in both U.K. currency and foreign currency.

That equates to about $370 billion based on today's exchange rate which as you well know is changing quite significantly on the back of this. The British pound has surrendered all of the gains it made in the run-up to this last stretch of the referendum when it looked like the remain vote may well have triumphed on the day.

That, of course, hasn't happened. What we're seeing is a lot of people asking themselves, how could the market have gotten this so wrong? Remember that the British pound at about 10:00 p.m. last night when those polls closed went up to 150. So, there's a lot of people here who will have lost a lot of money.

If we look further down the line towards the financial ramifications of what's going to happen, some people pricing in already in the pound at 1.37, potentially a half a point interest rate cut by the Bank of England. The Governor Mark Carney when he made his speech earlier didn't refer to any particular interest rate cuts but that standing neutral for the moment.

[04:15:04] But there's a big question about how much inflation the falling pound against the U.S. dollar will bring here. I was just speaking to Simon French who was the chief economist a few moments ago, and he was saying across Britain, Britons are going to feel it first in the petrol pump because oil is priced in dollars. When the U.K. currency is falling so much against the dollar, that's where consumers are going to hit in the pocket.

There's a reason banking stocks hit so hard today, some down around 20 percent. They've recovered a little bit after Mark Carney's statement. We've also got retailers and home builders suffering significantly in today's session.

And one of the reasons for that is because people are thinking, well, consumer discretionary spending is going to be a lot more pinched from here, not just because the economy could shrink if the U.K. were to decide to leave, which it seems to have voted to do so, but also because of the falling value of the pound.

QUEST: Many thanks, Nina dos Santos. We're going to watch the markets. It's an hour and 15 minutes into the trading day, but we have a long way to go. That promise by Mark Carney to put more liquidity into the market, $250 billion worth -- sorry, pounds.

JONES: Pounds worth. QUEST: Thank you.

JONES: And also providing liquidity in foreign currency as well if required, he says. So, there's been a contingency in plan all along. Nina was just reporting that.

And we're looking ahead to Wall Street. There are reports we're going to get Black Friday on Wall Street in the markets there in four or five hours time.

QUEST: Are we able to see the Dow futures which were off, all the Dow futures, the NASDAQ -- the Dow, the NASDAQ and the S&P 500. And we are able to show you that.

So, they've all pulled back by 1 percent, 1.5 percent. The worst was the NASDAQ which was down 4.5 percent. But the Dow itself was best part of 3. And all in all, it's going to be ugly day, but it's not as ugly as perhaps it could have been.

JONES: Let's get more reaction to everything that's happening out of Westminster this morning.

Let's get to Christiane Amanpour is outside the British parliament, and she has a guest with her.

Christiane, over to you.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Yes, indeed. The mayor of London, the new mayor of London, Sadiq Khan, very firmly in the remain camp. You took part in that great debate at Wembley arena, and you were very, very strong in that.

So what is your reaction today?

SADIQ KHAN, LONDON MAYOR: Well, we've got to recognize the will of the British people. They voted for us to leave the European Union. I mean, London voted quite decisively to remain in the E.U., as did Scotland and Northern Ireland. But the British public have spoken.

My message to friends and businesses and investors in America is we're going to carry on being open-minded, outward looking country. My message to the new prime minister will be, it's real important we negotiate with the E.U. that we ensure we get a single market access for our businesses.

So, use an American company, an investor, a business person, can sort of business have access to the European Union? What's real important is we carry on being a leading global city.

AMANPOUR: But how is that going to happen? Because obviously, this really puts London in threat because the Brexiters, they say they don't want the single market if the price is the free flow of people. That they don't want. That's what this referendum is all about.

KHAN: Well, some of the questions that they weren't able to ask during the campaign was how they're going to negotiate a better deal with the E.U. than we have as 1 of 28. Now, that's a conundrum for them to solve.

My message to the prime minister, whoever he or she is, it's really, really important that London have a seat at the table, access to a single market. My message to businesses and investors and friends and others in America is, don't think for a second that we've got to stop being open-minded, outward looking. Don't think for a second we're going to stop the creativity and innovation in our city.

It's important the message is heard loud and clear. We're a great city, we're a great country. We're going to carry on being so.

AMANPOUR: You're speaking to America but also around the world as this program is being broadcast around the world.

You told me that when we first met that some companies were telling you if there was a Brexit, they would not be able to stay in the city of London. This puts London's prosperity at risk and London's position is what many people call it the capital of the world, certainly the financial capital of the world.

KHAN: That's the concern that some businesses will have. That's the concern investors all around the world will have. If they want to have access to 500 billion people, should they be thinking about Berlin or Paris or other parts of the E.U.?

My message is, no. We've got the most talented and skilled people in London. We'll still ensure we're open for business. We will make sure that the new prime minister, whoever he or she is does a good job with the European Union.

[04:20:00] It's important we be open-minded and outward looking.

AMANPOUR: Can you just walk me through this conundrum because David Cameron's decision to resign? You say new prime minister.

So, is it the conservative party elect you need and the de facto new prime minister or is there going to be a new general election?

KHAN: There's a recent precedent for this, which is when Tony Blair resigned as leader of the Labour Party. The Labour Party then elected a new leader and he became the prime minister, Gordon Brown.

So constitutionally, there doesn't need to be a new general election. The government has a five-year mandate. We have a mixed term parliament.

Strictly speaking a new conservative leader could be the prime minister for the next 3 1/2 years. I expect there will be pressure to have a general election to get a fresh mandate because that will be needed when it comes to negotiations with the European Union.

One thing I care about is ensuring we have rights for workers. I'm keen to ensure we have access to a single market. And so it's important, some people are saying, for the new leader of the Tory Party, Conservative Party, to call a fresh general election. We don't know is the answer. AMANPOUR: I know. There's a lot of unknown right now.

KHAN: This is why it's important. There maybe unknowns, but I reassure your viewers, we're open for business, we're going to carry on doing business and the governor of the Bank of England has reassured our investors that we're in a good place.

AMANPOUR: Sadiq Khan, again, at the debate, and even during your own mayoral campaign, you said you survived and you beat the forces of fear and hate because the campaign was very Islamophobic and all of that kind of stuff. You are the first Muslim mayor of London.

You at the great debate said Boris Johnson was peddling, and you quoted, a big, fat lie in his campaign when he talked about the Turks are coming and 76 million Turks were going to come into Britain. That was the implication. That 350 million British pounds were going to the E.U. every week. That a European army was going to be replacing NATO.

These, you said, were lies and myths. And yet they resonated with the British public and this nation is divided right down the middle. How does this country get back together again?

KHAN: That's the most important question for people like me to answer and to address. We need to bring people back together.

What you see in the results across the country is Scotland, northern Ireland and London voted one way, and the rest of the country voted another way. The only region in England to vote to remain was London.

AMANPOUR: Which is a -- it's the only region in England that has a lot of immigrants. In many of these other parts --

KHAN: We've got to recognize that. The phrase I have is a win is a win.

You're right. It was a close win n we're split down the middle. We have to bring people together. We have to draw a line by the winning party because they won. So, there's no point --

AMANPOUR: So, the lesson is that fear and hate win?

KHAN: The lesson is that the British public aren't happy with the European Union. We didn't do enough over the last few years to persuade the British public of the benefits of the European Union. It's been a drip, drip, drip thing for the last 10, 20, 30 years. A British prime minister talks tough, goes to the E.U. to do a deal, comes back and criticizes the E.U. Or when there's a concession made, talk suffers (ph) because of the British minds.

And I think over the course of the period of time, the British public have not seen the benefits of the E.U. We have to recognize the British public have chosen to leave and deal with the consequences. And one of the consequences is how you bring people back together.

My message to European citizens, Europeans is that we respect you. We respect the work you do. We respect the hard work you do. The taxes you pay. The contribution --

AMANPOUR: You mean citizens here?

KHAN: Absolutely right. You should be reassured that whatever happens in the deal, we will make sure that we recognize the contribution you make.

AMANPOUR: Boris Johnson is potentially about to speak. He's your predecessor. But we have seen absolutely none of the official leave campaigners. The heads of the official leave campaign have not come out to speak yet.

And this vote has been pretty much clear for many hours yet. Instead, we've seen the catalyst who instigated this referendum, that is Nigel Farage, who many people have complained has really driven those politics of fear and demonization of the foreigner. He's the one claiming victory now. He is claiming victory.

Will Nigel Farage be part of Britain's political culture now, accepted culture?

KHAN: Well, that's the question for the leave campaigners to answer. They can't run away from the fact that the -- something's been unleashed during this campaign. There are people who have lived here 10, 15 years, European citizens who for the first time ever have been the victims of racial abuse.

There are people who have lived here for 5, 10 years, Polish, German, Italian, French, Spanish, who in the last few weeks and months have felt uncomfortable because of the atmosphere created by the campaign.

[04:25:09] It's now for the victors, the leave team, to reconcile what's been unleashed.

And my message is very simple: we've got to unite. Yes, you've won. We've got to make sure that we send a message that we're open for business. We're the greatest city, greatest country in the world but at the same time bring our own people together.

AMANPOUR: And from the Labour Party, there are people who said that if though Brexiters win, it will be even further to the right government of the Tory Party, and many workers, for instance, that's why the trade unions representing 4 million workers voted for remain -- or wanted to vote for remain.

And they say the Brexiters have already talked about cutting red tape and regulations which they say mean our rights as workers. How afraid are you for the working class?

KHAN: One of the things we've got to make clear to the government, the new prime minister when it comes to renegotiations is those are the red lines. We can't dilute any of the rights we've won from European Union. It's a fact, I'm afraid that if you look at the history of this country over the last 20, 30 years, labor governments bring in workers rights and conservative governments tend to dilute them. The European Union has been a good basement, The labor government has

been a low below which the British can't go. If we leave the European Union and there's no floor, a conservative government could dilute workers rights. If a new prime minister wants to heal the country, one way is to give a guarantee that none of the workers rights we've gained from the European Union will be given away.

AMANPOUR: And, finally, just as a person, as a politician who triumphed over the politics of fear in your own election, how do you feel today?

KHAN: I'm disappointed. I'm thoroughly disappointed. I think what's important is that we recognize that, you know, a referendum is a referendum. You have to respect the will of the people in democracy. They've chosen to leave the E.U.

We can have a post-match analysis of why we lost, why they won. We have to with humility recognize they won and work with them to make sure we get a good deal from the European Union.

But my message as the mayor of London is we have to carry on being a great city and we're going to carry on being the best city in the world. And come and visit. Come and invest. Come and make friendships.

AMANPOUR: All right. On that very optimistic note, Sadiq Khan, mayor of London, thanks very much for joining us.

And we're going to take a short break, and we'll be back with a lot more after this.

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