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Theresa May Faces No Confidence Vote After Historic Defeat; Al- Shabaab Is Reportedly Claiming Responsibility For A Deadly Assault On A Hotel Complex In Nairobi In Kenya. Aired: 5-6a ET

Aired January 16, 2019 - 05:00   ET

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


BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The "ayes" to the right, 202.

CROWD: Ooh.

UNIDENTIFIED MALE: The "no's" to the left, 432.

CROWD: (Cheering).

JOHN BERCOW, SPEAKER OF THE HOUSE OF COMMONS: So the "no's" have it. The "no's" have it. Unlock.

(END VIDEO CLIP)

MAX FOSTER, ANCHOR, CNN: And with that, the United Kingdom plunges further plunging into unchartered territory. No closer to an orderly Brexit, and now facing the possibility of an early general election. Thanks for joining us. I'm Max Foster live outside the Houses of Parliament in London for this special edition of "CNN Newsroom."

Prime Minister Theresa May then begins Wednesday with a fight for her political survival after suffering a historic defeat in the battle for Brexit. In the coming hours, British lawmakers are expected to debate a no-confidence motion tabled by the Opposition Labour Party. Immediately after Parliament's overwhelming the rejection of her Brexit deal. She lost by a margin of 230 votes, including 118 from her own Conservative Party. Here's how it played out last night.

(BEGIN VIDEO CLIP)

BERCOW: The "ayes" to the right, 202. The "no's" - order. The "ayes" to the right, 202; the "no's" to the left, 432. So the "no's" have it.

THERESA MAY, BRITISH PRIME MINISTER: Mr. Speaker, the House has spoken and the government will listen. Every day that passes without this issue being resolved means more uncertainty, more bitterness and more rancor. The government have heard - has heard what the House has said tonight, but I ask Members on all sides of the House to listen to the British people who want this issue settled and to work with the government to do just that. JEREMY CORBYN, OPPOSITION LEADER, LABOUR PARTY: The results of

tonight's vote is the greatest defeat for our government since the 1920s in this House. This is a catastrophic defeat for this government.

After two years of failed negotiations, the House of Commons has delivered its verdict on her Brexit deal and that verdict is absolutely decisive.

(END VIDEO CLIP)

FOSTER: Hadas Gold is outside 10 Downing Street, so he has called the no confidence motion, is he going to win it?

HADAS GOLD, REPORTER, CNN: Max, the numbers right now seem to indicate that he will not win it, but the Labour Party essentially had to table that no-confidence vote because of that historic defeat.

The margins of which we have not seen before in modern British politics. Typically, if a Prime Minister were to lose a vote by say 100, they would normally resign. But obviously, we are not in normal times right now. That no confidence vote will take place later today at 7:00 p.m. after a few hours of debate.

Before then, Theresa May will head to the House of Commons where she will take Prime Minister's Questions where I'm sure it will be another raucous few moments there for her. She, right now, faces really an uncertain future not only for herself politically, but for her Brexit deal.

So far, she doesn't seem to be backing too far away from her original plan. She said she will be talking to Members of Parliament across different parties to try to get a sense of what they need and what they want and then she will go to Brussels and try to see if they can give her any more concessions.

But it does not look good for her, although she is supposed to come back to the House of Commons on Monday and update them on what her next plans, next steps will be and there could be another vote, perhaps even next week.

On the Labour Party side, there are indications that they actually plan to continue tabling these the no-confidence votes over and over again because they feel that they are - it is such a desperate time and they also want to be in power and they want to be the ones to negotiate this Brexit deal. But it is not clear that they will ever have the votes - they will ever have enough votes in order to topple Theresa May, in order to topple the Conservative Party.

But to just give you a sense of how dire things are, if you look at the papers today that came out, "No Deal, No Hope, No Clue, No Confidence." Some of the headlines, "Dismay," obviously, a play on Theresa May's name. All of these does not change the calculus that we are 72 days away from the U.K. crashing out potentially out of the European Union With no deal on March 29th -- Max. FOSTER: Hadas, thank you. Reactions to the vote pouring in. A

statement from the Irish government urging the U.K. to see how it proposes to move forwards, will then consider what next steps to take in consultation with our E.U. partners. The Scottish First Minister took aim at the British Prime Minister and called for delay that would lead to a second Brexit referendum.

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NICOLA STURGEON, SCOTTISH FIRST MINISTER: This is a defeat of literally historic proportions for the Prime Minister and she has seen it coming for months and has just wasted time. We can't waste time any longer. First of all, I believe now is the time to stop the Article 50 clock to take away any risk of the U.K. crashing over the E.U. without a deal on the 29th of March.

(END VIDEO CLIP)

[05:05:08]

FOSTER: On the continent, French President Emmanuel Macron says the E.U. went as far as it could with the current Brexit deal. He adds, he expects the U.K. to ask for more time to renegotiate.

The European Council President Donald Tusk tweeted, "If a deal is impossible and no one wants no deal, then who will finally have the courage to say what the only positive solution is?" European Commission President, Jean-Claude Juncker says he regrets the outcome of the vote in the House of Commons. He is urging the U.K. to clarify intensions as soon as possible adding that quote, "Time is almost up." And Spain's Prime Minister says his government is also regretting the no vote. Pedro Sanchez tweeted that a disorderly exit will be negative for the E.U. and a catastrophe for the U.K.

Moments ago, we heard from German Chancellor Angela Merkel, too, she said simply, "I'm sorry about the outcome in the House of Commons." For more reaction from Europe, CNN's Melissa Bell is live in Brussels. Not much from the German Chancellor, although she and Macron really hold the cards really for the Prime Minister right now.

MELISSA BELL, CORRESPONDENT, CNN: And they have been absolutely firm, Max, that they have been, as far as they can go, although Emmanuel Macron as you say last night, speaking to the crowd in Normandy, leaving open that possibility of an extension.

Otherwise, really astonishment has been expressed on all sides this morning over on the European continent, astonishment after all, Max, that it was this House of Commons that triggered the Article 50 on the 29th of March, 2017 without a plan. The negotiations then of course, really kicked in. A lot of work was put in to find what Michel Barnier who led E.U. in those negotiations described as the best possible compromise that could have been reached, only to see that same House of Commons rejected at the end of the process.

Now, Michel Barnier was speaking this morning to the European Parliament and essentially expressing that other idea that we have heard emerge from Europe this morning, that says, "Look, we are really coming down to crunch time here. There are 72 days to go. We're going pick up preparations and speed up preparations for what looks more and more likely which is a no-deal Brexit.

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MICHEL BARNIER, E.U. CHIEF BREXIT NEGOTIATOR (Through a translator): Today, ten weeks away, the risk of a no-deal has never seem so high. Our goal is to avoid such a scenario, but we also have a responsibility to remain clear-headed, which is why we will intensify our efforts to be prepared for this possibility.

(END VIDEO CLIP)

BELL: Now just after him, another man deeply involved in this process, Guy Verhofstadt, the former Belgium Prime Minister and the man who has been leading the European Parliament in these negotiations also spoke to the European Parliament. And he later tweeted essentially what he had said that, "What we will not let happen deal or no-deal is that the mess in British politics is again imported into European politics. While we understand the U.K. could need more time going beyond the - extending Article 50 beyond the European elections," is unthinkable.

So again, that window opened for a possible extension and what we expect really to happen is if Theresa May survives that no confidence vote today, if those cross-party talks happen thereafter and if she then gets back to Brussels by the end of the week, this is possibly something that might be negotiated. The idea of a small extension of Article 50. This would allow at least to extend that March 29th deadline by a few more weeks.

Either that, the date of the European elections at the end of May or possibly others had speculated the actual changeover when the new Parliament will take its seats without, of course, the British MEPs present which would be in early July that would allow the British some time, perhaps, to get some kind of compromise through their own Parliament, and therefore to avoid what everyone wants to avoid, but the E.U. says it is preparing for that specter of a no-deal Brexit -- Max.

FOSTER: Okay, Melissa, thank you. Prime Minister May have suffered a major defeat last night, but she still has plenty of supporters. I'm joined by the Conservative MP, Antoinette Sandbach who voted in favor of Theresa May's deal and there weren't that many of you?

ANTOINETTE SANDBACH, MEMBER OF PARLIAMENT, CONSERVATIVE PARTY: No, not from the government payroll, which I'm not. I'm a back bencher MP. Yes, it was a disappointing result and I'm quite angry in a way with my hard line Brexiteer colleagues. My view is that a no-deal Brexit, the U.K. would be catastrophic. I feel that one of the chances to get a sensible resolution has now gone.

FOSTER: She now has to adjust her deal. Could she lose you in that process? SANDBACH: Well, she has spoken about reaching out across the House to

senior Parliamentarians, which I very much welcome and I think she may need to soften some of her red lines.

I think there are potentially some alternatives along the Norway style agreement that may well attract cross-party support.

[05:10:06]

FOSTER: John McDonnell tells me, he is a very senior Labour that he won't compromise on a Customs Union. We have to rank parts of the Customs Union.

SANDBACH: Well, I think certainly, a temporary customs arrangement is necessary. And in fact, the Conservative manifesto had in it a comprehensive customs agreement, so I don't think a custom agreement would be controversial because it was in our manifesto. But really, we need to be looking at the whole shape of the deal and it I think it is disingenuous for him to just pick one thing out. He hasn't dealt with free movement issues and you know, Labour's position would fail its own six tests, so Labour have very much played politics.

FOSTER: He is suggesting that the Prime Minister is being disingenuous because she is not going to - she has got no intention it appears to speak to him or the leader of the Opposition Party when she says she is reaching out.

SANDBACH: Well, I think the Labour leadership have played pure politics with Brexit and have failed to act in the national interest. But there are a number of groupings I would say that Labour is as split as the Conservatives are on Brexit. There is the possibility of building some cross-party alliances, and in fact, in some of the votes that I voted in, that cross-party partnership has been there.

FOSTER: Is she going to get behind his back effectively and speak to senior Parliamentarians as she calls it who operate behind him?

SANDBACH: Yes, I think she will.

FOSTER: Is that good strategy?

SANDBACK: Yes, I think it's very commendable strategy. You know, I think it is really important that we see whether or not there is a compromise that attracts broad support from the House of Common. And you know, this is about what is in the national interest, not about what is in one party's interest.

And I think the Prime Minister should work cross-party in the way that she has indicated.

FOSTER: When she comes back on Monday, she is going to have to have a new adjusted deal. What are you hearing about what she's going to be looking at there? She must have something in mind before she starts these discussions.

SANDBACH: I have no idea, I'm afraid. We need to see what comes back, but first thing first, is that she has to survive the confidence vote today, which I think she will do. But I hope she will give it really serious and detailed consideration over the weekend. And maybe come back and allow Parliamentarians to table a range of motions that we can vote on so that we can see if there is a consensus that we might unite around.

FOSTER: You were shocked at the scale of the defeat last night?

SANDBACH: Yes, I was.

FOSTER: Are you concerned that there might be an equally shocking figure tonight even though as you say, we are going to - she is going to scrape through it.

SANDBACH: No, I think Conservative MPs will support her and the DUP have also said that they will support her. So I expect that the figures to be the usual ones that there are when Parliament divides with the numbers that we have at the moment. She doesn't have control. It is a minority government.

FOSTER: Okay. Thank you. Interesting times. Coming up on the special one hour edition of "CNN Talk" we want to know what you think, does the U.K. need new leadership? Prime Minister May could very well survive the expected no-confidence motion, but is she the right person to lead the country going forward? Log on to facebook.com/cnninternational to have your say. That is "CNN Talk" starting at 12:00 p.m. here in London, that's 8:00 p.m. in Hong Kong.

The markets don't like uncertainty and the Brexit defeat served up more of it than they probably liked. How investors are responding, just ahead.

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[05:15:00]

FOSTER: Whilst chaos unfolds behind me here in Westminster, European markets have been open for a few hour now and their response to the defeat of Theresa May's Brexit plan has been far more muted. Defeat had been priced in, but was not expected to be quite so heavy. Let's bring in Anna Stewart who joins us from the trading floor in London. They are banking on something what is it?

ANNA STEWART, CORRESPONDENT, CNN: It's really interesting, Max. I'm here on the trading floor to gauge market reaction and to be perfectly honest, there is not a huge amount as you just showed there.

Equity is fairly flat and it goes the same for the pound. Now, yesterday straight after the vote, we saw it dip below $1.27 mark. It has gained ground since and the people I have been speaking to today say essentially this defeat did surprise them in terms of how big it was, but it means, necessarily sort of two things for markets.

First of all, that Parliament is likely to take greater control of the Brexit process, well, that means that a no-deal looks less likely. We know that there is no appetite for that in Parliament. We saw that with an amendment yesterday, plus if the Prime Minister needs to try and get a new deal or hash out new clauses within that, that's going to take some time and that means that Article 50 is likely to get extended, perhaps the U.K. isn't going to leave the E.U. at the end of March. These things are being seen as positive in terms of the market. Short-term risk has dissipated.

Different story when it comes to business. Now for business, we are seeing quite a different reaction. The BCC came out saying that this was really uncertain times for businesses. They want the government to come up with a deal, break this impasse. Of course, for businesses, they may hope for the best, but they have got to plan it for the worst. And currently, the worst is still a no-deal.

So they have to put in contingency plans, business investment is holding off for many. This means that there is a real impact on the economy. Now, GDP has already been sunk frankly by some of these issues and that is now extended for some time -- Max.

FOSTER: There was a call wasn't there, between the Chancellor and leading busy figures here in the U.K. and it didn't go particularly well according to those leading business figures because they are not being given any assurances about what is happening ahead and these conflicting messages coming out of government. How concerned are they going forward as businesses as opposed to just looking at the markets?

STEWART: Yes, there is huge concern here, Max. I think for businesses, it is just that. It is how can you plan for something when you really don't know what it is going to be? And you have to really plan for the worst and that is costly. It means delaying investments here in the U.K. It means putting time, money and thought into contingency plans.

We have already seen many banks move assets from the U.K. to the E.U. in case of a no-deal Brexit to circumvent the loss of passporting rights that will continue. We are going to continue to see the story until there really is a deal that is actually on the table and signed off by Parliament and the E.U. and we just seem so, so far away from that.

So it is a huge concern for business leaders if not for the markets today.

FOSTER: Okay, Anna, thank you. For more on how financial markets are doing after May's crushing defeat, let's bring in John Defterios. He joins us now from Abu Dhabi. We also have Kaori Enjoji in Tokyo.

John, in terms of the European perspective on this, what are you hearing from leaders that might affect the markets coming forward?

JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Well, first and foremost, Max, in terms of the overall investment climate and the response we have seen from the leaders so far, I think they are growing numb to the pain that we are seeing from the U.K. Parliament. So it not having an impact in European Markets or global markets for that matter. And the fact is the dollar-pound rate, the pound at its strongest

level ever since the vote traded at $1.2875, so that kind of risk is off the table right now. You brought up this idea of Angela Merkel saying she is sorry to see the outcome, but I read further into the comments which I thought opened the door for some flexibility from Europe overall.

These are quotes from her, "We will keep trying to work for an orderly solution." She went on to say, "We're ready for a non-orderly solution." But the one that stood out for me was the third point here, "We do have time to negotiate." And the view in the markets here is that the March 29th deadline will probably be extended.

The idea of a second referendum, definitely on the table, even the thought of a general election is there. And I think the Europeans, Max, cannot ignore the rising populism, yes, represented in Brexit, yes, with the yellow vest movement in France, but also in Italy with the five-star movement and ...

[05:20:09]

DEFTERIOS: ... even where Angela Merkel sits, the Germans have had the hard liners taking to the streets unhappy about growth and the level of migration coming into Germany as well.

So I think there is a slight window open here, even the Finance Minister of Germany is saying, we have to pay attention to what is taking place here and let's not forget the final point I was going to make here, U.K. represents nearly 70 million consumers and about $2.5 trillion of GDP.

In a world in the second half of 2019 where we could see a recession, it is not going to help European growth whatsoever to see a hard Brexit. So the Germans are suggesting here, let's try to negotiate. We have not heard that tone as Melissa was suggesting out of Brussels yet.

FOSTER: Okay, Kaori, from your perspective, what sort of impact is all of this having on the Asian markets? Because there are big trading links between Japan for example and the U.K.

KAORI ENJOJI, JOURNALIST: That's true, Max. YOU would have thought in a situation like this the yen would gain. Usually, yen is seen as a safe haven currency in times of unexpected like this. But this time, not really. I mean, dollar-yen has been very steady, around the 108 half level throughout the Asian trading session.

I think that is partly because we don't know what is going to happen from here on and people are - investors are loathe to take positions ahead of that big uncertainty. Ditto for the equity market as well, just two thirds of 1% lower in the Tokyo trading session. But that is not to say that corporations are extremely nervous about what is going to happen from here on.

The biggest business lobby here in Japan saying and warning that companies should take contingency plans for worst-case scenario. Just look at the manufacturing sector which is going to get very - which is bracing for a lot of turmoil. Honda recently said that it is going to be forced to halt production for a of couple days in the month of April because they are anticipating a lot of backlog logistical nightmares, the word that I'm hearing a lot.

Because you know when they get parts for an automaker from Europe, they might be held up in Customs. It is going to delay the whole process and these are companies that invented just in time management. So they don't want parts idling on their factory floors. Not to mention the finished products that the make in the U.K. are bound for the European market in many cases.

They may be faced with new tariffs and new regulations. A car that is certified in the U.K. may not be able to be sold in the German market or in a French market under different certification rules.

So there are a lot of variables that these manufacturers have to deal with. There are plenty of auto companies, the build factories in the '80s in the U.K. lured by Margaret Thatcher, those days and they are saying that they are building half the cars that the U.K. produces annually. Honda, Toyota and Nissan - this is going to be a big struggle for them.

It's not just the automakers, I think the financial community here is very concerned. People like Nomura, Daiwa, Sumitomo - the bankers that have big presence in the city, insurance companies as well have already started to look for other hubs and some of them have moved to Germany and Amsterdam and the Netherlands comes up as a big contender as well to try and mitigate some of the risks.

So I think there is a lot of concern at the political level as well. Japanese Prime Minister Shinzo Abe has been very, very supportive until now of Theresa May's Brexit plan and the politicians here have been unusually vocal about their concerns about this process.

So although we are not seeing any direct impact for today on the financial markets, Max, I think there is a lot of lingering concern among the Japanese corporate community.

FOSTER: Well, thank you both. As John and Kaori just mentioned Germany's reacting to the news of the day as other European nations.

German's Finance Minister Olaf Schutz says, "This is a bitter day for Europe. We are well prepared, but a hard Brexit would be the least attractive choice for the E.U. and Great Britain #Brexit." And Denmark's PM Lars Lokke Rasmussen says, "Very unfortunate outcome of the Brexit vote this evening. One step closer to a chaotic no-deal Brexit scenario and running out of time. It is now time for the British government to suggest a way forward. Meanwhile, we will intensify our no-deal preparations."

Joining me now, CNN political contributor, Robin Oakley. So much has happened in the last 12 hours. But what are you focused on today? Because weirdly, it is not the vote of confidence because we know what's going to happen. ROBIN OAKLEY, POLITICAL CONTRIBUTOR, CNN: Yes, we think we know what

is going to happen. But of course, we have to keep at the back of our minds the implications if she does lose that vote of no confidence, then there is 14 days for the Conservative Party under her leadership or somebody else's leadership to come back and win another.

FOSTER: She has to resign pretty quickly?

[05:25:01]

OAKLEY: She would have to probably in those circumstances. But we are not expecting it to happen, but you know, 14 days and then we could be pitched into a general election. But I am not sure that would clarify the position for anybody.

Because what would the Conservative Party fight on? You know, the May plan? Because all of the Brexiteers who have seen that often in the House of Commons could hardly continue to support her through a general election. How much would Labour change? The last election, Labour was vowing to support the decision taken in the Brexit referendum, now Labour has got a lot of remainers, lots of young people attracted to the party and because they are remainers and because they look to Jeremy Corbyn's party to reverse the first referendum.

So the election doesn't necessary solve anything. I think what we are tackling now is the very problem that is thrown up by having direct democracy of a referendum. Because the people voted in that referendum by a majority, 17 million people voted to come out of Europe. But they didn't necessarily vote to come out of Europe on any circumstances.

And what a lot of people are saying now, John Major, former Prime Minister for example is saying that there was a lot of the Brexit vote was because the leavers offered a prospectus that could never possibly be filled.

And now, because their version, vote gathering version of what - all the benefits there were going to be because Theresa May has not been able to deliver that in the negotiations, is probably nobody could, it's all being taken out on her.

Where do we go from here? One of the outcomes is another referendum because Parliament is in deadlock. Parliament doesn't seem to agree on any alternative plan. What do you do in those circumstances? Do you throw it back to the people who caused the difficulty in the first place in a referendum.

FOSTER: That would be a scandal according to hard Brexiteers though because the decision was made and if you're going to have a referendum, you have to go by the result. Actually the polls indicate that people have not shifted position that much. OAKLEY: But how do you interpret that result? It's a yes or no referendum. There was no gradation. There was no knowledge of precisely what form of Brexit was going to emerge from that and Brexit always had to be a negotiation. Now, we're talking about another kind of negotiation, can Theresa May

negotiate with other Parliamentary leaders? You just don't see the picture somehow of Theresa May and Jeremy Corbyn sitting down at the table and saying "You give me that, I'll give you that. We can cut a deal. We can get this through. We will leave Europe on reasonable terms. And the E.U. will accept it."

She is not that kind of politician. She is not a consensus person. Theresa May is somebody who has come up through the ranks of the Conservative Party, dyed in the wool of the Conservative. She likes to operate on simple slogans which is why she is typed as the May-bot at the last general election.

And of course, one thing her party doesn't want to do is to go into another election with Theresa May as the leader. Because she is not an inspirational figure in that position.

FOSTER: Robin, thank you. MPs making it clear, Theresa May's deal is not what they want. But what kind of Brexit do they want? We consider that next.

We're following another story out of Nairobi where at least 14 people have been killed. The Kenyan President says everything is now under control after a terror attack on a hotel complex. We be live at the scene for you.

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[05:30:00]

FOSTER: Welcome back to Westminster. Now that Parliament has roundly rejected Theresa May's Brexit deal, we know what the MPs are against, but what are they for? That question perhaps is uncertain as Mrs. May's political future. Here is CNN' Nick Glass.

(BEGIN VIDEOTAPE)

NICK GLASS, CORRESPONDENT, CNN (voice over): A month or so late but finally, yes finally a day of reckoning. The Prime Minister had postponed the Brexit vote once before just before Christmas. Now, after a total of eight days of fractious debate. There was no avoiding it. No more delays just the last plea for Mrs. May to save her deal. She was on her feet for over 20 minutes.

(BEGIN VIDEO CLIP)

MAY: Mr. Speaker, this is the most significant vote that any of us will ever be part of in our political career. After all the debate, all the disagreement, all the division, the time has now come for all of us in this house to make a decision.

(END VIDEO CLIP)

GLASS (voice over): Mrs. May again argued her case, but the House was in raucous combative mood. The Speaker had to quiet things down.

(END VIDEO CLIP)

BERCOW: The House must calm itself. Zen, restraint, patience.

(END VIDEO CLIP)

GLASS (voice over): The Prime Minister had already made a point of attacking the man across from her, the Labour opposition leader.

(BEGIN VIDEO CLIP)

MAY: He has failed in his responsibility - in his responsibility to provide a credible alternative to the government of the day by pursuing from the start a cynical course designed to serve his own political interest and not the national interest.

(END VIDEO CLIP)

GLASS (voice over): By the end, she was almost having to shout.

(BEGIN VIDEO CLIP)

MAY: We each have a solemn responsibility to deliver Brexit and take this country forward. And with my whole heart, I call on this House to discharge that responsibility together and I commend this motion to the House.

(END VIDEO CLIP)

GLASS (voice over): Mrs. May must have already known what was about to happen. She only had to read the morning newspapers how big would her defeat be. We didn't have long to wait.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The "ayes" to the right 202, the "no's" to the left 432.

(END VIDEO CLIP)

GLASS (voice over): The Brexit motion lost by 230 votes, simply the largest government defeat in modern British Parliamentary history. Jeremy Corbyn rose to his feet.

(BEGIN VIDEO CLIP)

JEREMY CORBYN, LEADER, LABOUR PARTY: I have now tabled a motion of no confidence in this government.

(END VIDEO CLIP)

GLASS (voice over): And in his excitement, off came the glasses.

(BEGIN VIDEO CLIP)

CORBYN: And I'm pleased - I'm pleased that motion will be debated tomorrow so this House can give its verdict on the sheer incompetence of this government and pass that motion of no confidence in the government.

(END VIDEO CLIP)

GLASS (voice over): Voices are evidently being strained on all sides and there'll be more to come. Hopefully one day some clarity about Britain's future in and out of Europe. Nick Glass CNN at Westminster.

(END VIDEO TAPE)

FOSTER: Joining me now is Kevin Brennan, Labour MP and remainer. I need to ask how you voted last night, it is not clear. Nothing is clear at the moment.

KEVIN BRENNAN, MEMBER OF PARLIAMENT, LABOUR PARTY: I voted against the deal that government brought forward. As you know, it was defeated by 230 votes which is quite unprecedented. So it was a bit crowded in that lobby.

FOSTER: You're on the front bench and your leader then called this vote of no confidence. So you will voting against the Prime Minister again?

BRENNAN: Yes.

FOSTER: What is the point of the vote when you're not going to will not win, dare I say?

BRENNAN: Well, you never know until it happens. I mean, if the people who say they are going to vote the way they are going to vote do and that includes the Democratic Unionist Party from northern Ireland, then she should be able to ...

[05:35:09]

BRENNAN: ... command a majority in the House. We know that already, that's how the government has survived so far, but it is an extraordinary situation where a Prime Minister can lose a vote on the most important policy that they have and that they have tried to sell for two years.

FOSTER: At such a scale.

BRENNAN: At such as a scale, but 230 votes and survive. And it is a byproduct of the strange times we're in and also the new sort of technical arrangements we have about how you trigger a general election. But it is expected that she will survive. But it is really important that the opposition says, look, we are here to take over. Let us do the job.

FOSTER: My initial understanding was he can only call one no vote of confidence. But that is not true, is it?

BRENNAN: No, it isn't true, and in fact, Mrs. Thatcher in the 1970s called I think about half a dozen before she eventually won one.

FOSTER: Is that his plan now do you think to keep doing that? BRENNAN: I don't think so. Because I mean, I think what happens next

is very interesting. I think Theresa May, if she survives today, she has to come back by terms of another motion next Monday and tell Parliament what she is going to do next. And it is rather incredible, she doesn't seem to be including in that talking to the largest opposition party in order to try and work out.

FOSTER: Well, she is going to speak to senior Parliamentarians, so that might be the likes of you and other senior Parliamentarians, but not actual leaders.

BRENNAN: Well, so far that's tended to translate into people on her side who are the extreme Brexiteers.

FOSTER: You don't think she will speak to any senior Labour members?

BRENNAN: Well, senior is a term that is very flexible, isn't it? Is she going to speak to the official people who actually represent the Labour Party? I genuinely don't know, but it would make sense for people to be talking, but I think what needs to happen next is that no-deal needs to be ruled out.

The Prime Minister yesterday in her statement said "I am not trying run down the clock. I am not trying to play games here and get down until it's too late and crash out with no deal." Well, she needs to make that reality really and make it clear that that is not what her plan is and bring some reality that and it seems more and more clear to me that we are getting to a stage where at some point people are going to have grasp the issue and extend Article 50 beyond March 29th.

FOSTER: But no deal is the default if we carry on as we are. So if you rule that out and you haven't got a deal, what happens on March 29th? I mean that's even more a bizarre situation.

BRENNAN: Well, that is why an extension, I think is required. There is a number of options that can happen. Either an alternative deal is agreed across the House and as we know Parliament is in a situation now where it is really behaving in a way it hasn't possibly ever before, certainly, not in living memory or secondly, we get to a stage where we have to really consider putting this question back to people. It is like a sort of political fat bird to use a horrible analogy, you know one of those horrible accumulations of mess in the sewers that has to be cleared, somehow or other and if it takes another referendum to do so, that might be what happens eventually.

FOSTER: And for a referendum, I mean, I am sure there will be support on your side for a referendum, but you need some Conservatives to move over to that position, too. Have you had any soundings there? What do you think?

BRENNAN: Well, the Labour Party's position is that we should seek all the alternatives and that is one of the alternatives that we have. There have been a number of Conservatives who have express the view. It is not a huge number, but a number of Conservatives who have expressed the view that that's what should happen. I don't think we are at a stage yet where there is a majority for it

in Parliament quite frankly and the Labour Party has to go through its processes. But I think it is more and more likely than it has been previously. Particularly after the scale of last night's vote.

FOSTER: Brussels is only going to give you a delay if you offer a reason and that reason you know needs to be a referendum, presumably. So there is a process you need to get to the delay on.

BRENNAN: But I don't think, in any way, shape or form, that they want no deal to happen by accident. And in fact, it would be a constitutional aberration if you think about it and a ridiculous situation if a no-deal Brexit happened by accident against the desire of the majority of members of the British Parliament against the desire of all the other members of the European Union and against the desire of the Commission and the European Parliament. That would be a ludicrous state of affairs.

So I think everybody mind's will be focused on that and making sure that doesn't happen and that might require an extension of Article 50.

FOSTER: Are you one of the remain MPs who has a constituency which voted leave?

BRENNAN: I'm not because mine is more of a city constituency. So mine voted at the time, probably, you can't know for sure, 56 - 44 and all the evidence suggests, if anything, it has moved even more towards the remain camp.

FOSTER: But that is the interesting challenge, isn't it for some of your counterparts who are in that position and there are a lot of them and that is who Theresa May needs to square with really, is that right?

BRENNAN: It is a problem. There are quite a few Labour members where the majority of their voters voted for Brexit. There are very few seats where the majority of Labour voters voted for Brexit despite the focus - understandable focus on that demographic. So it is a complicated question for people. And ultimately, when it comes down to it, you have to decide ...

[05:40:10]

BRENNAN: ... you know, do I what I think is right for the country as an elected representative or do I just take the temperature of most constituents and that's a hard choice and I understand why a lot of colleagues face a more difficult dilemma than perhaps I do.

FOSTER: Are you backing yourself in a bit of a corner though by calling for these referenda because what you're doing is pitting parliamentary democracy against direct democracy and ending up in a bit of a pickle.

BRENNAN: Unfortunately, I think that ship's already sailed. At the end of this process, I suspect that something I've called for, for many years, some kind of constitutional convention to get the U.K. Constitution sorted out and decide what we actually think about when a referendum should happen and what the rules should be under those circumstances. Some people think it's daft that on a given day, you take a snapshot and 52% is enough to radically change your Constitution. There aren't many countries in the world where you could do that without proving that it was the settled will of the people and had some kind of consensus around it.

FOSTER: This maybe the crisis that resolves it all?

BRENNAN: Yes, indeed.

FOSTER: Kevin, thank you very much, indeed. Now, in other news, Islamist militant group Al-Shabaab is reportedly claiming responsibility for the deadly assault on a hotel complex in Nairobi, Kenya. Just ahead, why this hotel was a prime target for the terror group.

(COMMERCIAL BREAK)

[04:45:00]

FOSTER: Kenya's President says everything is under control in his country after at least 14 people were killed in a terror attack. Our correspondent on the scene has been witnessing gunfire and people being evacuated from a hotel and office complex in Nairobi. The attacks started on Tuesday afternoon.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Run down. Run. No.

[Gunfire]

UNIDENTIFIED MALE: Come, come this way. Run.

[Gunfire]

(END VIDEO CLIP)

FOSTER: You see people running for their lives there. It began with explosions. One in the car park and the other in the hotel's foyer. Then hours of gun fire. The Islamist militant group, Al-Shabaab says it carried out the deadly assault.

On Capitol Hill on Tuesday, there were both cheers and jeers from Democrats as the U.S. President's nominee for Attorney General was grilled by senators. Bill Barr clearly stated his position on Special Counsel Robert Mueller and his Russia investigation.

(BEGIN VIDEO CLIP)

WILLIAM BARR, NOMINEE FOR ATTORNEY GENERAL: I want - I want Special Counsel Mueller to discharge his responsibility as a Federal prosecutor and exercise the judgment that he is expected to exercise under the rules and finish his job.

(END VIDEO CLIP)

FOSTER: Well, unlike the man he would replace, Jeff Sessions, who on the advice of government lawyers, recused himself from all things Russia. Barr said he would be the one to ultimately decide on any question of recusal.

(BEGIN VIDEO CLIP)

BARR: There are different kinds of recusal. Some are mandated for example if you have a financial interest ...

[05:45:10]

BARR: ... but there are others that are judgment calls.

KAMALA HARRIS, U.S. SENATOR, CALIFORNIA, DEMOCRAT: Let's imagine it is a judgment call and the judgment by the career ethics officials in the agency are that you recuse yourself. Under what scenario would you not follow their recommendation?

BARR: If I disagreed with it.

HARRIS: And what would be the basis of that disagreement be?

BARR: I came to a different judgment.

HARRIS: On what judgment?

BARR: The facts.

HARRIS: Such as?

BARR: Such as whatever facts are relevant to the recusal.

(END VIDEO CLIP)

FOSTER: Barr was also asked what he would do if directed by the President to commit an illegal act.

(BEGIN VIDEO CLIP)

BARR: If the President directs an Attorney General to do something that is contrary to law, then I think the Attorney General has to step down.

(END VIDEO CLIP)

FOSTER: Barr also testified that he believes Russia either interfered with or tried to interfere with the 2016 U.S. presidential election.

Venezuela opposition leader Juan Guaido has thanked the U.S. Vice President for his support. Mr. Guaido spoke to Mike Pence on Tuesday after the Venezuela National Assembly said it will not recognize Nicolas Maduro's second term as President. Sources say the U.S. President is also considering recognizing Guaido as Venezuela's legitimate President. Mr. Maduro, a socialist authoritarian who has presided over Venezuela's political and economic crisis was sworn in last week despite hundreds of complaints of election violation violations and a low turnout.

Now, a former aide to Joaquin "El Chapo" Guzman says the drug kingpin once paid a $100 million bribe to the Mexico's former President Enrico Pena Nieto. The testimony came out at Guzman's trial in New York. Earlier in the trial, a spokesman for the former President called the bribery accusations false.

You are watching "CNN Newsroom." Theresa May is likely to win her confidence vote, but what about the battle for Brexit? We will have more analysis after the break.

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FOSTER: We are live outside the U.K. Parliament for a special edition of "CNN Newsroom." Prime Minister Theresa May faces a no-confidence motion tabled by the Opposition Labour Party that came immediately after Parliament's overwhelming rejection of her Brexit deal.

I'm joined now by Owen Jones, he is a left-wing journalist and activist. I was speaking earlier to John McDonnell, very senior in the Labour Party, Owen saying that he doesn't expect to be reached out to if I can call it that by the Prime Minister. Does that surprise you?

OWEN JONES, LEFT WING JOURNALIST AND ACTIVIST: No, I don't think it's surprising in the slightest. I mean, I think the problem I suppose Theresa May has, not perhaps surprising that I would offer sympathy to the Prime Minister given my own political position is she has an impossibly internally fractious Conservative Party.

In fact, the only thing keeping the Conservative Party together and there was one Tory MP who anonymously briefed "The Telegraph" newspaper a few weeks ago that he worried the Tories would exist in their current form by the end of the year, so profound was their crisis.

That there is a hard core Brexiteer faction who would regard any dealings with Corbyn's Labour Party as completely and utterly unforgivable and it could even provoke resignations from that particular faction from her government.

So the problem that she faces is her deal is clearly dead. It is the biggest defeat in the history of Parliamentary democracy in this country. The idea of getting anything from the E.U. when they have made it clear they not going to give is clearly for the birds.

But if she now she pivots towards for example a softer Brexit or Norway plus, she could command the support of certainly much of the Parliament Labour Party, but at what cost? Because clearly, the hard Brexit faction of her party would regard the Norway plus option which is staying in the Custom Union, single market effectively.

[05:50:06] JONES: As a complete betrayal of their Brexit plans. So that's the

situation which she finds herself. Either she softens Brexit or of course pivot towards a second referendum. She would have to resign almost certainly on the spot. I couldn't count - I can't see for a second not at least given her own public very clear statements that a second referendum cannot happen. Although she has gone back on her word before several times admittedly, that that won't wash with the party either.

So to coin a phrase, she is caught in a trap - of her own making.

FOSTER: She appears to be - she is talking about still speaking to senior Parliamentarians which does suggest she is going to go around the back of Jeremy Corbyn and John McDonnell for example and try to speak to senior Labour Members of Parliament. She will try to find some sort of compromise. Do you think she will find anything there?

JONES: I think it is a complete waste of time going over the heads of the Labour leadership to talk to back benchers. Back benchers have already made it clear anyway, even though those who were certainly cannot be described as Corbyn-ites, if you like. That's simply not going to wash.

I mean, there were only a very, very limited pool of Labour MPs who were going to back the deal. In the end, three did, just three, beyond that, there is only a handful you could see. Now, given she lost with a majority of 230, the idea of getting five or six Labour MPs to back her deal is just a complete and utter waste of time. The only way she could a decisive shift is to completely abandon the deal she has got at the moment for example pivoting towards a permanent Customs Union, but she has ruled a Customs Union, a permanent Customs Union so vociferously and that is being made by her own party senior - party leaders, particularly on the right, as completely and utterly unacceptable.

She made such dark red lines, it is now very, very - it is almost impossible for her to cross any of them. She would have to cross thick, dark, red lines she set in order to get support of enough of the Parliamentary Labour Party to have any chance whatsoever of getting her deal through.

FOSTER: It's not like you, as you say to offer sympathy for Theresa May. But she is in this very difficult situation, isn't she? Because if she does move towards this idea of a Custom Union, she will lose those hard Brexiteers within her Cabinet in particular, but also in the wider party and then she has got the same problem again. She is just not going to be able to get her deal through.

JONES: Hold on, let's not offer too much sympathy for her. This is a nightmare of her own making. She kept saying no deal is better than a bad deal. Then she came up with a bad deal which is obviously better than no deal in the first place. She called a general election she never needed to call. She destroyed her authority. The way she approached the negotiations with the E.U. rather than trying to build bridges, using language which is so inflammatory, she alienated the 27 foreign governments she needed to build bridges with. Equally, she could not build a deal with her own Cabinet, let alone

those 27 foreign governments. And then she set impossible red lines. So look, this is a nightmare of her own making. History will condemn her just as David Cameron, I would imagine for being amongst the two worst Prime Ministers in the history of this country. She is now caught in a trap of her own making.

And I think the only real way of breaking this deadlock is either to move toward Norway plus, Customs Union, single market; another referendum which will be bitter and divisive, a general election, given the source of all these troubles in this country are nearly a decade of disastrous conservative rule.

FOSTER: I know you are a great proponent of getting out of Westminster. I see you're not in Westminster right now. You're in another part of London. You go around the country. You are very - you have got a huge youth following, particularly on the left. This idea that if there is another referendum, you are going to have lots of young people who were unable to vote in the last referendum coming out and swinging the vote. I mean, justify that to us. What are you basing that idea on and what are the facts behind it?

JONES: I don't think I have said anything I have argued by the way. I mean, one of my concerns is I spend a lot of time in leave areas. I grew up in an area of Stockport in the north which voted to leave the European Union. Many of my friends voted to leave the E.U.

I go to Mansfield or Ashfield - these are places or - Blackpool, places in the Midlands and North and I meet leave voters. And I campaign for remain, who say, why haven't we left yet? We voted two and a half years ago. They are alienated from the political elite. I worry in a second referendum many of those people will be angrier than ever. The leave campaign slogan is set to be "Tell the Again," which is a frighteningly powerful proposal.

I do think that there will have more young people coming out to vote. I think turnout was higher amongst young people last time than people remember. It was lower than older people. But it was still about two thirds of younger people who came out to vote and heavily for remain.

More could come out but equally there could be more people to come out to vote for leave. I have met lots of people who didn't vote in the last referendum who would vote for leave. The truth is, the brutal reality is, this is a bitterly divided nation.

[05:55:04 ]

JONES: There hasn't been a significant shift between leave and remain, not least given how disastrous I think Brexit negotiations have been.

If there is another referendum, which there may well be. It may well be the only option, leave has every chance of winning all over again and then it will be worse than over.

FOSTER: Owen, I appreciate your time. Thank you very much, indeed. I'm Max Foster in London. Thank you for joining us. We will have more throughout the day as the British Prime Minister faces that no confidence motion tonight, but for now, "New Day" with John Berman and Alisyn Camerota coming up for you.

(COMMERCIAL BREAK)

CHUCK SCHUMER, U.S. SENATE MINORITY LEADER: I don't want to give the President a victory on this issue. I have three words for President Trump and our Republican senators, open the government.

ANNOUNCER: This is "New Day" with Alisyn Camerota and John Berman.

JOHN BERMAN, ANCHOR, CNN: Welcome to our viewers in the United States and all around the world. This is "New Day." It's Wednesday, January 16th. 6:00 here in New York and we have a major new development in the longest government shutdown in U.S. history.

It turns out it's really bad for the economy. So maybe that's not a shock ...

[06:00:00]