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Brexit Throws Britain Into Political And Financial Turmoil; Parliament's First Session Since Brexit Vote; P.M. Cameron Says Brexit Outcome Was Not One He Desired, But Process Must Now Begin Nonetheless; Cameron: We Will Not Stand For Hate Crime; Prime Minister Cameron Reassures That Robust Contingency Plans Are In Place; Cameron Says Article 50 Will Not Be Invoked At This Stage and That U.K. Should Not Turn Its Back On The EU; Corbyn Says Economy Needs Clear Plan For Investment And Welcomes Market Protections; Scotland Voted 62 Percent To Remain In European Union And Is Considering Independence Referendum. Aired 10-11a ET

Aired June 27, 2016 - 10:00:00   ET


[10:00:00] BECKY ANDERSON, CNN ANCHOR: As Big Ben chimes, 3:00 in the afternoon here in London. I'm Becky Anderson outside the Houses of

Parliament, the impact of the U.K.'s decision to leave the European Union continuous to be felt around the world.

In Britain's House of Commons behind me, the scene may look familiar but beneath the surface, chaos. Remember, the parliament is now waiting word

from their prime minister. Well, David Cameron has just left a meeting with his cabinet he has to address at the House of Commons in about a half

an hours time. It will not be the first time he'll face parliament since Britain voted to spit with the European Union. In fact, it'll be the first

time we saw -- we've seen him since the results of this vote.

Investors are seeing more rage on Wall Street in the second day of trading since the Brexit vote. U.S. market is open about 30 minutes ago. And

there, you see the down industrials right now. Trading down about 1.2 percent, off 200 points, nothing like the declamation we saw of that

markets on Friday but lots of time to go.

David Cameron expected to address some of the bit sort of the worrying investors. Robin Oakley joining us to talk more now.

And as we await David Cameron's statements in the building behind us, we are beginning to got word of the plans that the British government is now

putting in place with a Brexit unit as it's, getting to be called, going forward, I guess. And details of when we should expect a new prime


ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: Yeah, I mean, they certainly need a new kind of Brexit unit because there are few officials in British

government now with any experience in negotiating trading agreements. So they're going to have to build from the bottom, and it's going to a lot of

employment there but solicitors and other people with legal qualifications, I think, Becky.

But the really interesting loop is this very speedy decision from the 1922 Committee, that's the committee of Conservative backbenchers in parliament.

There really a rush forward with the choice of a new Conservative party leader who will of course become prime minister.

And its nominations in by Wednesday evening and closing on Thursday at noon. So, I was listening to Andrea Leadsom, one of the leading voices on

the leave campaign being asked earlier, "Are you going to be running?" "So, I'm considering it. I'm considering it." Well, she and the others

are considering it, not very long to consider now. They've really got to put their funds together, their teams together if they're going to go for

it. And what will see then is an exhausted ballot until they have reduced to -- until the M.P.s, the Conservative members of parliament have reduced

the candidates to two, at which point, it goes out to 150,000 party members of the Conservative Party who will choose not just the party leader but the

next prime minister.

ANDERSON: So, we can expect with those details at least today the beginning of the attempt by the British government to reassure not just the

British public but European global investments. So there is a plan of going forward because the problem has been since we have the results of

this vote, there's been so little clarity and so few details or any contingency plans as a government?

OAKLEY: Well, the leave campaign don't seem to have had very much of a contingency plan in place. And there're still divisions among those that

will effectively won the referendum for Britain to come out in the EU about precisely what kind of trading arrangement there is going to be with EU.

Is it for example going to be the Norway example whereby Norway continuous paying money into the EU, accepts free movement but gets full access to the

single market of the -- is the British government going to go for that or not but there's still division in the ranks on that essential question.

ANDERSON: A number of other points that the prime minister's spokeswoman has provided a bit of clarity on in the last couple of minutes and again,

as we await the statements of the British Prime Minister David Cameron, who of course tended his resignation on Friday morning but will still continue

as prime minister until a new leader is in place.

On Scotland today, the spokeswoman told CNN the last thing Scotland needs is another divisive referendum, that is with reference to other possibility

of another referendum on independence. I'm going to ask whether there's any possibility of Scottish veto of the results of last week's vote. She

said categorically no.

OAKLEY: Well, I think that is the basic opinion of the constitutional experts that Scotland cannot actually block this decision that has been

taken however much Nicola Sturgeon might like to do so.

[10:05:03] But, of course, it's wishful thinking perhaps only on the other question of Scottish independence because many of those who are making the

case to remain said, look, if England, if Britain -- the rest of Britain votes to leave and Scotland votes to stay, there is bound to be another

referendum. And, you know, that will almost inevitably take face at some stage. But we don't -- it wouldn't happen until Nicola Sturgeon basically

assures she can win it.

ANDERSON: So, as we consider the states of domestic British politics which was also considered how this is playing out else where. And we have heard

from Angela Merkel, the German Chancellor today who is a busy woman and she has meetings with all the European leaders, at least those of France and

Italy today trying to, it seems provide a bit of this sort of fell on the great (inaudible) trying to reassure other European leaders, we'll get only

this but this doesn't have to be a quickie divorce.

And we've also heard from John Kerry, he says, well, the special relationship with the U.K. will continue but the U.S. will also look to a

very good relationship with Europe going forward.

OAKLEY: Yeah, as well -- I mean, there is an interest to so many people in not having Europe unravel further and that is what is the fear of a lot of

the E.U. leaders. Donald Tusk, leader of the European Council has said for example, there is the specter of an unraveling Europe facing them at this


And what the other leaders, one reason why they came for Britain to get all the negotiations about how it leads, is they don't want this constant

obsession with what's wrong with Europe. And they don't want nationalist movements and/or regional movements in other countries that, you know,

taking an example from Scottish independence for example and from the British brexit. So, there's a lot of worry in Europe.

And from the American point of view, obviously, they want a united strong Europe particularly in terms of standing up to Vladimir Putin on any saber-

rattling he might be doing over Ukraine, issues like that.

ANDERSON: Washington clearly concerned about what it sees going on in Europe and we expect to see John Kerry here later on this afternoon after

his said trip to Brussels. We've been discussing what sort of day is the German Chancellor Angela Merkel is having him, and we even described it as

busy, lots of meetings with various global leaders. She says she does not want to end talks with the U.K. about leaving European Union until it

formally triggers what is this exit process.

Have a listen.


ANGELA MERKEL, GERMAN CHANCELLOR: We cannot accept a statement and that would not be good for the European Union and Great Britain but Great

Britain needs a certain time to analyze everything and I can understand this.


ANDERSON: Well, right now, Ms. Merkel is meeting with the French and Italian leaders in Berlin. As I said, they are planning to make a joint

statement in about two hours and CNN plans to carry that live.

Well as we await the British Prime Minister David Cameron making a statement to the House of Commons behind me in about 20 minutes time, we

have already heard from U.S. Secretary of State John Kerry who is now heading to London this hour, off to emergency meetings in Brussels. And he

is urging U.K. and E.U. to manage the separation carefully for the sake of their citizens the global market.

Nic Robertson joining us from Brussels with the very latest. And when John Kerry spoke about a half hours ago, he reminded his audience that being,

well, the entire world it seems, at this point it seems, maybe the only historians know (ph), doesn't it? That this was a project, that Europe was

a project, set up after World War II for the peace and prosperity of its citizens along with those of the U.S.

And he said, nothing has changed since the result of this referendum last Friday. But clearly, Washington concerned in reassessing its relations

with the U.K. and Europe going forward, Nic.

NIC ROBERTSON, INTERNATIONAL DIPLOMATIC EDITOR : Well, it absolutely has to, you know, Washington has relied on Britain to be a voice of the

European table whether it's negotiating with Iran, whether it's stiffening the European resolve with sanctions over Russia because of its accession of

Crimea, whether it's meddling inside Ukraine. All of those issues, United States has looked to Britain to help give it voice in the European


If we look back just a couple of months ago when Britain took -- vote undecided, it couldn't get involved joining the United States with strikes

on Syria. You very quickly saw the United States shift focus and turned its attention particularly in working in Syria to France where France was

willing to step up and able politically to step up and take on that position.

[10:10:13] So, the United States, while it does have that special relationship with Britain, it needs its own strategic interest strong and

good friends in Europe so absolutely, when Secretary Kerry comes here, on the one hand, he might be trying to sort of bring the two sides, Britain

and the European Union together but he is absolutely looking out if the U.S. interest put on that issue of bringing of the two sides together.

Without doubt, there is some tension at the moment. The European Union wants to be very clear, it wants to hear from Britain an intention at some

point that it will trigger Article 50 and begin to negotiate that divorce. Why? Because they've had a messy relationship with Britain in previous

negotiations. They don't want to be in a position where they feel that Britain is just letting that treaty slide. So that's on one side and we'd

heard obviously all this all about the political chaos and if they insist on moving forward on the -- on triggering Article 50 in Britain.

What Secretary Kerry said here and I think if you listen to his language, it's very clear how worried he is about how troubled the current situation

is. This is what he said.


JOHN KERRY, U.S. SECRETARY OF STATE: I think it's important to note that ever since World War II, we have been working, all of us together, on the

development of a structure to be able to make our countries stronger and to be able to deliver a good life, benefits to our people.

The interests and the values which have united us for such a long period of time did not change on the day of that vote.


ROBERTSON: So, what he also told about was that there should be calm heads that people shouldn't go off half-cocked. He really was talking here about

cooling off the temperature, understanding the situation from both sides, Britain isn't in a position yet, it may get there very soon. We've just

heard from Robin about how that process of finding a new prime minister may accelerate the level Britain articulating its way forward on this. But a

very real concern here in Europe at the moment is not able to do that at the moment, Becky.

ANDERSON: Nic Robertson is in Brussels for you this morning. John Kerry on his way to London here to discuss this Brexit.

With the prime minister, he will be speaking here in the building behind me, in the House of Commons in about 15 minutes time. We'll take that

statement to lawmakers here live on CNN. We are now in the second day of trading since the Brexit vote and global market still ruffles.

As probably 10 Downing Street with CNNMoney editor-at-large, Richard Quest is standing by and lay assurances, Richard from the finance, Mr. George

Osborne earlier on today's failing to convince investors that Britain will be as good as financial bank going forward as it was last Wednesday before

this vote. I'm seeing the result of that in the sell off (ph) to the market once again certainly against British financial assets.

RICHARD QUEST, CNNMONEY EDITOR-AT-LARGE: Yes. And the reason why he was unable to calm the markets other than the fact of they've got a plan and

they've got contingency plans and the -- I mean, the governor of the Bank of England tried that on Friday. That was only marginally successful is

that he said he doesn't back down from any of the things he said during the campaign.

And one of the things he said is a strong proponents of the remaining side was that there would be a massive budget hole in the -- deposit in the hole

of the U.K. budget, that there would probably have to be an emergency budget raising taxes. The recession was highly likely and it would be very

damaging to the British economy.

Now, today, Becky, he did not back down from any of those statements. He - - Immediately, he pushed forward the fact that future budget would have to be dealt with by a new government that takes office in September.

But substantially, Becky, the message remains the same. There's going to be a major adjustment to the U.K. economy. It's going to be short-term

volatile (inaudible) and the benefit's longer-term, we just don't know how far out.

ANDERSON: I was interested to hear John Kerry appeal to see the sort of reform but other than some called for across Europe.

So, while, just earlier on, Nic and I were just discussing this and it is important for sort of, you know, economic analysis going forward.

[10:15:06] Look, Europe isn't the most successful project in the world, is it? Without Britain involved, it could be even lesser. So, let's leave

aside what's going on with British financial assets at the moment, how concerned do you think global investors are about the project there is, the

European Club?

QUEST: Oh, they're very concerned and for very good reason, George Soros in a note put out just in the last 24 hours, he said, you're looking at the

start of the disintegration of the European Union. And there are many people who believe that whether it happens fast or whether it happens slow

that the European Union is not going to survive as a result of what is taking place.

Now look, that's not saying that the 27 will splinter completely, there will always be a core of countries that have decided to be together,

probably the original 506 that go back to the Steel and Coal Community's act which is all things was originally when it started. But there are

serious people with serious views who seriously believe that what you are seeing is the beginning of the breakup of the European Union as we know it.

And that's just because Britain has fired a starting gun and others will follow in fullness of time.

Can we prove that today in the middle of Union? Absolutely not.

ANDERSON: All right, good stuff. Thank you. Richard is outside 10 Downing Street. I'll be joined by Robin Oakley here on the set.

As we await statement from the British Prime Minister, still is the British prime minister but weren't be by September 2nd. We are told nominations

for the Conservative Party leadership should be in, we are told by Wednesday night, close by Thursday and in 10 weeks from now, we will have a

new British prime minister who will seek advice and take opinions from a new Brexit unit on how to extricate Britain from the European Union


Still ahead, political turmoil in the opposition Labour Party. Here in the U.K., the mounting (inaudible) defined Jeremy Corbyn to stand down.

Meanwhile, Scotland (inaudible) what to do about Brexit because the Scots opt for an exit of their own.

Details ahead.


ANDERSON: The U.K.'s vote to leave the European Union has unleashed uncertainly in financial markets around the world but a leading leave

campaign is painting a picture of calm and stability.

[10:20:10] Boris Johnson who is housing good news, there weren't by any immediate changes to the budget.

Listen to what he told to a throng of reporters earlier.


BORIS JOHNSON, LEAVE CAMPAIGNER: It's clear now that project fear is over. There's not going to be an emergency budget, people's pension are safe, the

pound is stable, the markets are stable, and I think that's all very good news.


ANDERSON: The opposition Labour Party is in turmoil following a weekend of resignations. Leader Jeremy Corbyn has announced 10 new appointments to

his shadow cabinet he had to replace. String of members who quit and protest over his leadership but Corbyn still refuses to step down. He

faces no confidence motion this week and he's accused of ineffectually campaigning to stay in the E.U.

Well, the British finance minister also working to reassure, so here's George Osborne address the nation before the markets open. He acknowledges

that recovery won't be playing failing but he says the British economy remains fundamentally strong.


GEORGE OSBORNE, BRITISH CHANCELLOR OF THE EXCHEQUER: We've worked systematically through a plan that today means Britain has the strongest

major advanced economy in the world. Growth has been robust. The employment rate is at a record high. The capital requirements for banks

are 10 times what they were. And the budget deficit has been brought down from 11 percent on national income, and was forecast to be below 3 percent

this year.


ANDERSON: Well, Labour M.P. Adrian Bailey, it's critical of Jeremy Corbyn, the Labour leader and the joints of -- now, joint (inaudible), it seems

that he's losing friends in high places, the shadow cabinet in drogues.

However, that's not necessarily important, isn't it? As long as Labour membership, those who vote for the Labour party still care about Jeremy

Corbyn, he may just still survive.

ADRIAN BAILEY, BRITISH PARLIAMENT MEMBER: Well, I think there's one spread concern even amongst those members who did vote for Jeremy a year ago about

the nature of the campaign he conducted during the E.U. referendum.

Put this simply, they recognized that if he confuses Labour supporters about his own commitment to the E.U. and what they will be standing for,

how confusing would he be in the heat of the general election. He demonstrated there a lack of leadership which puts up serious consequences

if we were precipitated into an already general election.

ANDERSON: And which is a high ...

BAILEY: It's quite a possible.

ANDERSON: ... possibility at this point.

OK, listen, this must be very depressing for you. You know, earlier, we're seeing sort of, you know, incredible mess in the ruling government here

and, you know, criticism of whether there was enough of a plan or contingency for a leave vote, waiting to hear from the prime minister

shortly here.

Going forward, why should any of all our viewers in the world care about what's going on in the opposition Labour Party here in the U.K? What makes

your party relevant at this point?

BAILEY: Well, of course if there is a general election and we did have a change of leader, the rights for a dissatisfaction would -- of the way in

which the remaining camp -- I'm sorry, the leave camp conducted a campaign and the possible leadership, future leadership of victory (ph) party could

actually result in a Labour victory.

Therefore, to have a Labour leader who is a credible prime minister and can command the confidence and support of the public is very important indeed.

But even if we didn't have a general election, it is most important at a critical time that you'll have an opposition that is effective and gain,

commands the support of his supporters, join the referendum campaign, I think it was quite clearly demonstrated that Germany (ph) did.

ANDERSON: I think it was also a quite clearly demonstrated during their campaign that people in middle England, let's call it, my family is

offended by that, don't feel represented by their politicians of whatever. Struck as it were. So, it's a matter of whether they're of the left or of

the right. This, to many people, was a vote against this place, against the (inaudible), against those who work here, suggestion that, you know,

people work here, politicians world, they don't get of -- some people say to the detriment of this entire referendum. And many people may not been

voting on whether they want to be in the E.U. open note, it was all about guys like you.

BAILEY: Well, obviously, we had 78 years now of austerity and worst, all the headline figures which seems to paint rosy picture of Britain's

economy, the fact is that a substantial proportion of the public failed that they have missed out on it. And that is a direct result of government

policy and the measures it has taken.

[10:25:05] Obviously, any future Labour leader must demonstrate it has the policies to actually change that.

ANDERSON: All, right, we'll have to leave it. And we thank you very much today for joining us.

We're taking a very short break. Thank you so much.

Stay with me for just one lens into. Let's get into a break. You are watching CNN, Becky Anderson, outside the House of Commons. Stay with me.


ANDERSON: The Houses of Parliament in London has the impact to the U.K.'s decision to leave of the European Union continues to be felt around the

world. We are now waiting for Britain's prime minister to face parliament. It will be David Cameron's first time standing before them since he

announced plans to resign.

Mr. Cameron is coming from 10 Downing Street where he just met with his cabinet, his spokeperson says he told them to begin laying down the

groundwork for a split with Europe. For more on the political chaos here in the U.K., we turn to John Peet, the Political Editor for The Economist.

And forgive me John, we will break in to this because we will -- we are of course waiting on the statement from the prime minister. And this will be

the first time that we've seen him since, 8:00 in the morning when it was clear that the country voted to leave the E.U. and he looked pretty stomped

(ph) at this point.

JOHN PEET, POLITICAL EDITOR, THE ECONOMIST: Almost cheerful at one point. And he said he did not expect to leave the state. I think he assumed he

will win all the way three


PEET: So he was stopped.

ANDERSON: What do you make of what's going on in present.

PEET: Well, it's the best. I mean, I think he have to resign. I always think he lost the state particularly since he was so strong identified

remaining campaign he had to go. I'm slightly surprised the turmoil spread, say, quickly to the Labour party, the opposition as well. But we

now (inaudible) leaderless parties.

And obviously, we got problems with the markets, stock markets, with -- on selling falling. People want things to move more quickly. So I didn't

think we got that long to resolve for the party.

ANDERSON: And we've been looking to some bright spots this morning. Now, I see that David Cameron there smiling on the right-hand said of the

screen, just for the left. There aren't a lot of bright spots to talk about. One of them perhaps is that in fact Angela Merkel, the German

Chancellor rating (ph) but keeping it basic, all the E.U. leaders who say out, is out, let's get Britain divorce from this club as quickly as

possible suggesting that Britain should be needing some time, you know and let's just take this first a little clearer then others might ...

PEET: I think, I mean it will be an interesting to see what the mode is like in Brussels tomorrow when Mr. Cameron goes out to meet his colleagues,

but I think they were -- their (inaudible) is British. They didn't think this is very -- was necessarily, they think Cameron has mishandled it ...

[10:30:02] BECKY ANDERSON, CNN ANCHOR: Just take this process a little flow than others might ...

JOHN PEET, POLITICAL EDITOR, THE ECONOMIST: I think, I mean it will be an interesting to see what the mood is like in Brussels tomorrow when Mr.

Cameron goes out to meet his colleagues. But I think they were -- they're angry with the British. They don't think it was necessary. They think

Cameron mishandled it. Britain is always an awkward country in the European Union anyway.


PEET: But there's also grown politicians. They know that elections (ph) always what people what to do. And they were trying the best of way we got

to and they want to have a good relationship with Britain. They want to preserve trade as much as they can. And so I think they will be quite

grown up about their approach because that's not the same being easy or generous to the British. So I think, you know, it's going to be a tough


ANDERSON: What do we need to hear from David Cameron?

PEET: I think we need to hear that he's exploring all these options, that his setting in train quite quickly a Tory leadership contest because we do

need new prime minister. And I think, you know, early October is maybe too late. We want it -- we may want it before then because I think they do

need to get the negotiations going.

ANDERSON: We've heard from the committee that organizes these things that the nominations for a new leader of conservative party will be in and close

by Wednesday evening.

PEET: Yes.

ANDERSON: And that a new leader of the conservative party will be in position by the December the 2nd.

PEET: December.

ANDERSON: That's pretty quick I think, you know.

PEET: That is quite clear. I mean it may (inaudible) a bit but that is ...


PEET: That is quite clear because probably will respond to the pressure. I think the question then is how quickly do we -- and to form organizations

to lead. And I think the other countries will want happen quite quickly in September.

The new leader, if its Boris Johnson may say you'd rather have an informal negotiation before we get into the formal exit negotiations. I think the

other countries will say that no interested in that. They want to know whether Britain serious about leaving or not.

It's conceivable somewhat during this negotiation period.


PEET: The British may something to say well we're not sure this is a game or the right way. We need to think again. But I think, you know, a

referendum like this probably doesn't mean we are leaving.

ANDERSON: David Cameron has had the weekend to think about what is he's going to say here. It is 3:30. We'll just ask you within -- in the U.K.

We are waiting his statement to the British Parliament. He's got a weekend to think about it.

Given that (inaudible) seems -- he's standing up now. So let's go ...

PEET: Yes.

ANDERSON: ... to David Cameron.


DAVID CAMERON, BRITISH PRIME MINISTER: Thank you, Mr. Speaker. With permission, Mr Speaker, I would like to make a statement on the result of

the E.U. referendum.

Last week saw one of the biggest democratic exercises in our history with over 33 million people from England, Scotland, Wales, Northern Ireland and

Gibraltar all having their say.

We should be proud of our parliamentary democracy. But it is right that when we consider questions of this magnitude, we don't just leave it to

politicians but rather listen directly to the people. And that is why Members from across this House voted for a referendum by a margin of almost

6 to 1.

And when I talk about this House, let me welcome the new member for choosing to her place.

I think I had advice to keep my mobile phone. She might be the shadow cabinet by the end of the day. And I thought I was having a bad day.

Mr Speaker, let me set out for the House what this vote means, the steps we are taking immediately to stabilize the U.K. economy, the preparatory work

for the negotiation to leave the EU, our plans for fully engaging the devolved administrations and the next steps at tomorrow's European Council.

Mr Speaker, the British people have voted to leave the European Union. It was not the result I wanted nor the outcome that I believed is best for the

country I love. But there can be no doubt about the result.

Of course, I don't take back what I said about the risks. It is going to be difficult. We have already seen that there are going to be adjustments

within our economy, complex constitutional issues, and a challenging new negotiation to undertake with Europe. But I am clear -- and the Cabinet

agreed this morning -- that the decision must be accepted and the process of implementing the decision in the best possible way must now begin.

At the same time, Mr Speaker, we have a fundamental responsibility to bring our country together. In the past few days we have seen despicable

graffiti daubed on a Polish community centre. We've seen verbal abuse hurled against individuals because they are members of ethnic minorities.

Let's remember these people have come here and made a wonderful contribution to our country. And we will not stand for hate crime or these

kinds of attacks. They must be stamped out.

Mr Speaker, we can reassure European citizens living here, and Brits living in European countries, that there will be no immediate changes in their

circumstances. Neither will there be any initial change in the way our people can travel, in the way our goods can move, or the way our services

can be sold. The deal we negotiated at the European Council in February will now be discarded and a new negotiation to leave the EU will begin

under a new Prime Minister.

[10:35:12] Turning to our economy, it is clear that markets are volatile, there are some companies considering their investments and we know this is

going to be far from plain sailing. However, we should take confidence from the fact that Britain is ready to confront what the future holds for

us from a position of strength.

As a result of our long-term economic plan, we have today one of the strongest major advanced economies in the world and we are well placed to

face the challenges ahead. We have low, stable inflation. The employment rate remains the highest it has ever been. The budget deficit is down from

11 percent of national income, forecast to be below 3 percent this year. The financial system is also substantially more resilient than it was 6

years ago, with capital requirements for the largest banks now 10 times higher than before the banking crisis.

The markets may not have been expecting the referendum result but, as the Chancellor set out this morning, the Treasury, the Bank of England and our

other financial authorities have spent the last few months putting in place robust contingency plans. As the Governor of the Bank of England said on

Friday, the Bank's stress tests have shown that U.K. institutions have enough capital and liquidity reserves to withstand a scenario more severe

than the country currently faces. And the Bank can make available 250 billion pounds of additional funds if it needs to support banks and


In the coming days, the Treasury, the Bank of England and the Financial Conduct Authority will continue to be in very close contact. They have

contingency plans in place to maintain financial stability -- and they will not hesitate to take further measures if required.

Turning to preparations for negotiating our exit from the E.U., the Cabinet met this morning and agreed the creation of a new EU unit in Whitehall.

This will bring together officials and policy expertise from across the Cabinet Office, Treasury, Foreign Office and Business Department.

Clearly, this will be most complex and most important task that the British Civil Service has undertaken in decades. So the new unit will sit at the

heart of government and be led by and staffed by the best and brightest from across our Civil Service. It will report to the whole of the Cabinet

on delivering the outcome of the referendum, advising on transitional issues and exploring objectively options for our future relationship with

Europe and the rest of the world from outside the E.U. And it will be responsible for ensuring that the new Prime Minister has the best possible

advice from the moment of their arrival.

Mr Speaker, I know that colleagues on all sides of the House will want to contribute to how we prepare and execute the new negotiation to leave the

E.U. And my Right Honored Friend the Chancellor of the Duchy of Lancaster will listen to all views and representations and make sure they are fully

put into this exercise. He will be playing no part in the leadership election.

Turning to the devolved administrations, we must ensure that the interests of all parts of our United Kingdom are protected and advanced. So as we

prepare for a new negotiation with the European Union, we will fully involve the Scottish, Welsh and Northern Ireland governments. We will also

consult Gibraltar, the Crown Dependencies, the Overseas Territories and all regional centres of power, including the London Assembly.

I have spoken to the First Ministers of Scotland and Wales, as well as the First and Deputy First Ministers in Northern Ireland and the Taoiseach, and

our officials will be working intensively together over the coming weeks to bring our devolved administrations into the process for determining the

decisions that need to be taken.

Mr Speaker, while all of the key decisions will have to wait for the arrival of the new Prime Minister, there is a lot of work that can be

started now. For instance, the British and Irish governments begin meeting this week to work through the challenges relating to the common border


Mr Speaker, tomorrow I will attend the European Council. In the last few days I have spoken to Chancellor Merkel, President Hollande and a number of

other European leaders. We have discussed the need to prepare for the negotiations and in particular the fact that the British government will

not be triggering Article 50 at this stage.

Before we do that we need to determine the kind of relationship we want with the EU. And that is rightly something for the next Prime Minister and

their Cabinet to decide. I have also made this point to the Presidents of the European Council and the European Commission and I will make this clear

again at the European Council tomorrow.

Mr Speaker, this is our sovereign decision and it will be for Britain - and Britain alone - to take. Tomorrow is also an opportunity to make this

point, Britain is leaving the European Union, but we must not turn our back on Europe -- or on the rest of the world.

The nature of the relationship we secure with the E.U. will be determined by the next government. But I think everyone is agreed that we will want

the strongest possible economic links with our European neighbors, as well as with our close friends in North America, the Commonwealth and important

partners like India and China.

[10:40:02] I am also sure that whatever the precise nature of our future relationship, we will want to continue with a great deal of our extensive

security cooperation and to do all we can to influence decisions that will affect the prosperity and safety of our people here at home.

Mr Speaker, this negotiation will require strong, determined and committed leadership. And as I have said, I think the country requires a new Prime

Minister and Cabinet to take it in this direction. This is not a decision I have taken lightly. But I am absolutely convinced that it is in the

national interest.

Mr Speaker, although leaving the E.U. was not the path I recommended, I am the first to praise our incredible strengths as a country. As we proceed

with implementing this decision and facing the challenges that it will undoubtedly bring, I believe we should hold fast to a vision of Britain

that wants to be respected abroad, tolerant at home, engaged in the world and working with our international partners to advance the prosperity and

security of our nation for generations to come.

I have fought for these things every day of my political life and I will continue to do so.

And I commend this Statement to the House.

JOHN BERCOW, SPEAKER OF THE HOUSE OF COMMONS: And the leader of the Opposition Jeremy Corbyn.

JEREMY CORBYN, LABOUR PARTY LEADER: Thank you. Thank you, Mr. Speaker. Firstly, I would like to thank the British people for turning out to vote

in the referendum in such high numbers.

The votes was a reflection of the significant of the issue, but it was a close vote on the back of the campaign that was too often divisive and

negative. These benches put forward a positive case to remain part of the European Union and convince more than 2/3 of our supporters. But the

majority of people have voted to leave and we have listened to an accepted what they've said.

Many people feel disenfranchised and powerless, especially in parts of the country that have left behind for far too long. Communities, Mr. Speaker,

that have been let down not by the European Union but by Tory governments. Those communities don't trust politician's deliver because for too long

they haven't.

So, instead of more extreme cuts to local services which have hit the areas the hardest, this government needs to invest in those communities. Many of

those areas are deeply concerned. Deeply concerned about the security of pledge E.U. funding. Can the Prime Minister give us any guarantees on

those issues as that money is desperately needed?

Secondly, is the issue of trust and the tenor in the referendum campaign was disheartening. Half truce and untruce were told.


CORBYN: Many of which key lead figures spent the weekend distancing themselves from not at least proclaim that the vote will leave the -- would

hand the NHIS an extra 350 million pounds per week. It is quite shameful that politicians may claim the new (inaudible) of promises they knew could

not be delivered.

Thirdly, real concern exist about immigration but too much of the discussion in the referendum campaign was intemperate and divisive. And in

the days following the referendum results, it appears we've seen a rise in racist incidents such as the attack on the Polish Center in Hammersmith

which the Prime Minister quite right he referred to, and sadly, many of the such incidents all of over this country. I hope the Prime Minister and

Home Secretary will take all action they can to help these attacks, help this graceful racist behavior on the streets of this country.

As political leaders, we have duty to calm our language and our tone, especially after shocking events of 10 days ago. Our country is divided

and the country will thank neither the benches in front of me nor those behind for indulging an internal factoring maneuvering at this time.

Mr. Speaker, we have serious matters to discuss in this House and in the country.

BERCOW: I want to accommodate as many as possible of those colleagues who wish to question the Prime Minister matter to just slow up if people make a

lot of noise. I've got plenty of time. I don't know other people have. Jeremy Corbyn.

CORBYN: Thank you, Mr. Speaker. It does appear that neither wing of the Tory government has an exit plan which is why we're insisting that the

Labour Party be fully engaged in the negotiations that lie ahead.

[10:45:10] We need the freedom to shape our economy for the future and protect social and employment rights while building new policies on trade,

on migration, environmental protection and on investment.

I fully understand the Prime Minister is standing down in three months time but we cannot be in a state of paralysis until then. The Prime Minister is

making the European council tomorrow. I hope he's going to say that negotiations will begin so we know what's going on, rather than being

delayed until October.

We as a house have a duty to act in the national interest and ensure we get the best agreements for our constituents. Will the Prime Minister today

confirm that in the light of the economic turmoil, the chancellor would announce at least a suspension, prepping the termination of his now even

more counterproductive fiscal rule?

What the economy needs now is a clear plan for investment particularly in those communities that have been so damaged by this government and sent

such a very strong message to all of us last week. Will he specifically rule out tax rises or further cuts to public services that was threatened

in the pre-referendum?

I welcome his assurances on the uncertainty felt by many E.U. nationals currently working in our economy, including the 52,000 who work so well and

held by a national health service to provide the service we all need. It is welcome that the Prime Minister is consulting with the leaders of

devolved administrations and I hope with the mayor of London too, a city for which the implications are huge.

We must act in the public interest and support nations to reduce volatility. I welcome market protections but what about protections for

people's jobs, their wages, and their pensions? Can the Prime Minister make clear what plans are in place? The chancellor spoke this morning to

reassure the stock markets, though they clearly remain very uncertain.

We understand that some measures cannot be discussed in the house, so will he give me an assurance that the chancellor will provide private briefings

to has offset numbers on this matter?

Finally, Mr. Speaker, on a personal note, may I say -- may I say Mr. Speaker, finally on a personal note, I've many fundamental disagreements

with the policies of the Prime Minister and his governance. Nevertheless, as he announces the end of his premiership, its right to reflect that he

led a government that delivered equal marriage against the majority of his own MPs and he was right to do so.

But I want to thank him too for his response to the bloody Sunday inquiry and had reject -- reacted to the tragic murder of Jo Cox. We thank him for

his service that I'm sure we will enjoy many more debates and disagreements while he continues as Prime Minister.

CAMERON: Thank you, Mr. Speaker. Well, let me agree with the leadership opposition that it was positive turnout was so high. I also agree with him

that we do need to reach out to those people who haven't benefited from economic rights and make sure they feel that their economic security is

important to us as well. But I don't agree with him that it's right to start to try and re-fight the campaign all over again.

All I know, from my part, is I feel I put everything I could into the campaign that I believed in with heart and soul, and left nothing out and I

think that was the right thing to do.

Answering these questions on money that different areas of the country get, until we leave the EU none of those arrangements change. So, what has been

set out in the budget and the payments and the rest of it, all of those continue. But as the negotiation begins probably for leaving, obviously,

the next government will want to set out what arrangements it will put in place for farmers, for local authorities, for regions of our country.

On intolerance -- in fighting intolerance, I absolutely agree with him. We must take all action we can to stamp this out.

He asked about the chancellor's fiscal rule and also future plans. What I would say is that we have not worked so hard to get the budget deficit from

11 percent down to below 3 percent to see that go to waste. And we must continue to make sure that we have a sound and strong economic plan in our


For the coming months, that is my responsibility and the chancellor's responsibility. In time, it will be the responsibility of a new government.

And they will have to decide how to react if there are economic difficulties along the way.

He asked if there could be private briefings for members of the front bench with the chancellor, his checker (ph). As always, in these arrangements,

if shadow cabinet members want these sorts of briefings, they can have them. And can I finally thank him for his kind remarks and the fact that

he hopes that we'll be debating with each other some weeks and possibly months to come.

[10:50:08] UNIDENTIFIED MALE: Mr. Speaker, when we acquire a new government that's decided what it means by leaving and draws up some

detailed policy instructions for the committee officials he set up, a great deal of detailed legislation on covering a whole variety of fields was

thought being submitted to this parliament. Does my right honorable friend agree that we still have a parliamentary democracy? And it will be the

detail -- duty of each Member of Parliament to judge each measure in the light of what each man and woman regards as the national interest and not

to take broad guidance from a plebiscite which has produced a small majority on a broad question after a bad tempered and ill informed debate?

And would he agree that we face months of uncertainty if we're not careful either?

BERCOW: It's really not acceptable for people to make that level of noise. The right honorable and leaded gentleman will be heard and every member of

this house will be heard. Let's accord the right honorable and leaded gentleman the respect to which he's entitled.

UNIDENTIFIED MALE: Thank you, Mr. Speaker. And with my right honorable read as a risk of uncertainty for a few months causing very considerable

difficulty, we consider the possible first step of joining the European economic area, which was designed in the first place for countries like

Norway and Iceland where the great bulk of politicians wish to join the European Union but could not get past the ridiculous hurdle of a referendum

in order to get there. And that that would at least would be negotiated, modifications, changes, if anybody can decide what they want after we get

there, but do we give some reassuring order and stability to our economy and might begin to attract a little investment and future prospects for our


CAMERON: Well, let me thank my right honorable friend for his remarks.

It might be a symbol this house shouldn't block the will of the British people to leave the European Union. But of course, we've now got to look

at all the detailed arrangements and parliament will clearly have a role in that, in making sure that we find the best way forward. And will be

principally the job for the next government. But I do believe in parliamentary sovereignty and the sovereignty of this parliament and the

latter detail will have to be discussed and debated. But decisions like whether or not to join the EEA must be for our future government.

BERCOW: Angus Robertson.

ANGUS ROBERTSON, MEMBER OF PARLIAMENT: Thank you very much, Mr. Speaker.

Scotland voted overwhelmingly to remain in the European Union. The 62 percent of voters cast their votes to remain the EU. Every single local

government area in the country voted to remain in the EU. And in Scotland, we voted to remain because it really matters that we are in the single

European market because we value the free movement of people of goods and services because our EU citizenship rights matter as do our legal

safeguards for workers, for women and for parents.

In Scotland, Mr. Speaker, we voted to remain because we are a European nation. It really, really matters to us that we live in an outward-looking

country not a diminished little Britain.

In Scotland, we are now being told from Westminster that despite the majority against leave, we're going to have to do as we're told. We're

going to be taken out of Europe against our will.

Mr. Speaker, let me tell this house and our friends across Europe, we have no intention whatsoever of seeing Scotland taken out of Europe. That would

be totally, totally democratically unacceptable. We are a European country and we will stay a European country. And if that means we have to have an

independence referendum to protect Scotland's place then so be it.

Thank goodness, Mr. Speaker, that we have a Scottish government and a first minister prepared to lead and seek to protect Scotland's place. And it is

very, very welcome that this approach is being supported by opposition political parties across the Scottish parliament.

Meanwhile, Mr. Speaker, Project Fear has turned to Project Force. Apparently, those who proposed that we could leave Europe have no plan. A

senior leave MP said and report, there is no plan.

The Leave Campaign don't have the post Brexit plan. They went on to say number 10 should have had a plan.

Meanwhile, U.K. share prices are so volatile that some stocks have temporarily been suspended and Sterling has hit a 31-year low.

[10:55:06] Mr. Speaker, on one thing I hope we are all agreed. And that is that we take very serious note of the very disturbing series of racist

incidents directed against our fellow citizens who happen to come from other European countries. I hope that we all on all sides totally

repudiate these despicable acts and encourage the police and prosecuting authorities to do all that they can.

Mr. Speaker, given the economic damage and uncertainty that is currently being caused, may I ask the Prime Minister the following financial


We welcome the actions of the Governor of The Bank of England to help provide certainty in difficult times. Can the Prime Minister confirm that

the Governor has no plans presently to change his forward guidance on interest rates? The S&P will continue to support any sensible measures to

deliver stability and confidence in the U.K. economy at this time. However, we want to be explicitly clear that this will not be used to

further deepen the program of austerity.

In conclusion, Mr. Speaker, the lack of leadership from Whitehall over the past few days has been unprecedented. We recognize at any further drift or

vacuum simply exacerbates uncertainty. We know the Prime Minister is planning to leave and we wish him well. But can we have an absolute

assurance that this government will finally start to take a firm grip of the situation we all sadly find ourselves in it.

CAMERON: But first of all what I say to the honorable gentleman is our focus should be to get the very best deal for the United Kingdom outside

the European Union. That should be the very best deal for Scotland as well. I actually agree with him about the despicable acts of racism that

are taking place and that we reassure him as well. We will take every step that we can.

He asked questions specifically about interest rates that is the matter for the Governor of Bank of England and a monetary policy committee. And they

set out the views in advance of the referendum. He asked about budget that's going to be a matter for a future government.

And then they say this to him, Scotland benefits from being in two single markets, the United Kingdom and the European single market. In my view,

the best outcome is to try and keep Scotland in both.

BERCOW: Sir William Cash.

SIR WILLIAM CASH, MEMBER OF PARLIAMENT: Thank you. Thank you. Thank you Mr. Speaker. May I first of all pay tribute to the Prime Minister for the

dignity with which he addressed the nation from 10 Downing Street yesterday.

Mr. Speaker, will my right on the offense take a positive and simple message to the leaders of the other 27 member states of the European

Council tomorrow. They made -- a voters of the United Kingdom have demonstrated that the value of that great principle, the principle of

democracy for which people fought and died.

CAMERON: Hello. Let me take my honorable friend. Of course, when I go to the European Council tomorrow, I will report directly of the result and the

decision of the British people and no one should be in any doubt about that. But I think it's important that we set off on this path of exiting

from the European Union. We try to build as much good will as possible on both sides.

BERCOW: Tim Farron.

TIMOTHY JAMES FARRON, LEADER OF THE LIBERAL DEMOCRATS: Can I pay tribute to the Prime Minister following the announcement of his resignation on

Friday. Of course, we haven't often agree but his commitment to historic bipartisanship during the coalition government and his energetic commitment

to the Remain Campaign contrast favorably, the tribalism of others. He has my respect and my thanks.

I also respect the outcome of the referendum but I still feel passionately the Britain's interests are best served at the heart of Europe in the

European Union. I can accept defeat but I will not give up. I have not changed my beliefs.

With the promises of the Leave Campaign unraveling and no leadership being shown by the opposition, will the Prime Minister confirm that free

movements of people and access to single market are paramount the economic stability of Britain? How many launched investigation as the whereabouts

are the members for Oxbridge, I'm sorry.

CAMERON: It's all up to me to ensure attendance in the chamber. I've got many responsibilities but that's not one of them. Let me thank him for

what he said about my leadership and that is how much I enjoy playing on a platform with him at the final rally outside Birmingham University.

We've brought together himself, myself and Gordon Brown (ph) and they are unique but obviously unpersuasive trilogy. Well, they have to say Gordon

Brown (ph) on the write when they gave fantastic speeches.