Pound and U.S. Stocks Seesaw
GORANI: Welcome back. It was a victory for Theresa May tonight at least. The British Prime Minister says her cabinet is backing her draft Brexit plan. Mrs. May has crossed a big hurdle, but she says she expects difficult days ahead. Investors are reacting to the news from London already, the Dow is climbing back from the lows it hit earlier today. We're also getting our first reactions in from the business community. Anna Stewart is following it all. Are we pinning this bounce back on this deal that Theresa May was able to get backing for within her cabinet?</s>ANNA STEWART, CNN REPORTER: Exactly on Sterling, Hala, as soon as she started speaking --</s>GORANI: Because actually, it doesn't look like it's bounced back enough, we're still down a 100 points, yes.</s>STEWART: Well, you know what? We saw it rise --</s>GORANI: Yes --</s>STEWART: To the $1.30 this morning on hopes it would hit a deal, we've had such a rocky ride of the day. Every investor really trading on every single noise that came out of Westminster. Well, we are now back up to $1.30. It doesn't seem high, right? But you know what? This is the sort of psychological barrier where sterling has been for some time now ever since the referendum really where it was $1.50, as soon as the results came in, it slumped to $1.30. And this is really where it's been. We are getting reaction as well as you said from the business community, let me bring you what we have from the BCC, the British Chambers of Commerce, they've welcomed the move as had all of those Forex investors. But they say "this may be the end of the beginning, but not yet the beginning of the end. Our firms need clarity and precision on the specific terms of trade they will face in the future, many of which are still to be agreed." Hala, and this is because as you've been talking about, first of all, we are at the beginning of this process, yes, it's gone through cabinet, it has to go through parliament, it has to go through the EU, and this is just the transition period. Firms will still need some clarity sooner rather than later on what the trading relationship will be.</s>GORANI: Anna Stewart, thanks very much. Kevin Brennan is a British member of parliament for the Labor Party, I'm also joined by James Morris who's a conservative member of parliament. Thanks to both of you. First, let me ask you, what is your reaction to this announcement by the Prime Minister?</s>JAMES MORRIS, BRITISH CONSERVATIVE MEMBER OF PARLIAMENT: Well, look, I think this is a very significant moment. The cabinet has agreed to the withdrawal -- draft withdrawal agreement, so this is a very significant moment. We have a withdrawal agreement which can now be put forward to parliament for discussion and for a vote. Now, this has been a very hard negotiation. The Prime Minister in the British government has been seeking to get an agreement in the national interests, which respects the result of the referendum in June 2016. It takes control of our borders once again, but also is firmly focused on ensuring future U.K. prosperity with a political declaration, which gives us an indication that we will be able to come to good terms on free trading relationship with the European Union.</s>GORANI: So you will be voting in favor really?</s>MORRIS: I haven't seen all of the detail of the withdrawal agreement, I haven't -- no, I haven't seen all the detail of the withdrawal agreement, but this is a significant moment.</s>GORANI: She's going to have a hard time. Do you PMPs -- I just had one of my guests here, PMP, Sammy Wilson said no way, Lib Dem, no way, other Labor Party members are saying this is the worst of both worlds, and so are some Tories. It doesn't sound like she has the numbers?</s>KEVIN BRENNAN, BRITISH LABOR MEMBER OF PARLIAMENT: Well, it doesn't sound like she has the numbers. I mean, the draft agreement itself I understand is about as long as a Harry Potter novel, so it's --</s>GORANI: Six hundred dollars, almost $600 --</s>BRENNAN: And probably not quite as entertaining under this, but then I think is a bit of a significant overnight reading to be done by --</s>GORANI: Yes --</s>BRENNAN: People if you want to get to grips with that. But we do know that there are bones of it from reports, and it doesn't sound like it satisfies the test that the Labor Party have set which were based on the original words of the government about what they said they would achieve for negotiation. And ultimately, this is a -- you know, this is a deal that doesn't actually settle most of the big questions that there are about our future relationship with the European Union. It's a bit of a pig in the poke anyway, we don't really know what we're going to get at the end of a transition period. So I doubt very much that she can command a majority in the House of Commons.</s>MORRIS: No, well, I don't agree with that. Look, the choice which is going to be presented is this is the best deal that is available, that the British government has negotiated, and the choices between that and a no deal, which would be not a good result for the U.K. economy. And --</s>GORANI: Or there's a certain --</s>MORRIS: That is not -- that's not what she said tonight -- what's interesting was it on the set pretending to be -- what this -- what this deal does is it also ensures continuity for British business, ensuring that we have the very good prospect of a negotiated, good free trade deal with the EU and securing Britain's prosperity. That's absolutely the key to this --</s>GORANI: Kevin, if you could just allow me to run this sound-bite --</s>BRENNAN: Yes --</s>GORANI: From Theresa May --</s>BRENNAN: Yes --</s>GORANI: Because what you just mentioned, this is one of the things she said on the steps of 10 Downing Street a little earlier. Listen.</s>THERESA MAY, PRIME MINISTER, UNITED KINGDOM: The choice before us is clear. This deal which delivers on the vote of the referendum, which brings back control of our money, laws and borders, ends free movement, protects jobs, security and our union or leave with no deal or no Brexit at all.</s>GORANI: Well, we -- she says or leave with no deal or no Brexit --</s>BRENNAN: Or no Brexit at all. In fact --</s>GORANI: At all.</s>BRENNAN: And we've had this back and forth in the Commons, you know, in recent weeks many times, and I asked the Prime Minister a question on, you know, just a couple of weeks --</s>GORANI: Yes --</s>BRENNAN: Ago on this, and up until now, she has tried to maintain this fiction, which everybody knows is a fiction that there's -- either, it's either Prime Minister's deal or Britain has to crash out of the European Union with no deal whatsoever. And everyone knows that is not the case. If the House of Commons votes down this deal, then the Prime Minister, there's a process that's been set in place, the Prime Minister will have to go away, maybe I don't know, she might resign over that, I don't know, but she would have to go away and come back with another option. And one of those options must be -- if there's not to be a general election, that there will be another vote potentially on whether or not we remain in the European Union.</s>GORANI: James, that is a third -- that is a third way.</s>MORRIS: And this is -- I mean, this is massive speculation. Look, we have significant milestone tonight, which is what we have a withdrawal agreement in play in the U.K., which the Prime Minister will make a statement tomorrow and all of the detail will be available for people to look at, and then that will be voted on in the U.K. parliament. It is the best deal that the U.K. government can present, it has been -- it's been the work of a lot of hard negotiation --</s>GORANI: But is it better than staying in the EU?</s>MORRIS: It provides the ability for us to -- it respects the result of the referendum, and it also locks in our ability to do trade deals around the world in areas of the world where there is great opportunity for the U.K. to develop its relationships around the world, and it respects the vote of the referendum taking back control of our laws and our borders. That is what the Prime Minister has now presented, is going to present to parliament --</s>GORANI: Yes --</s>MORRIS: For a vote.</s>GORANI: Is this not staying loosely within the Customs Union --</s>BRENNAN: Well --</s>GORANI: But not being able to really vote on any of the rules that govern it?</s>BRENNAN: Well, it is, and that's only for a temporary period we think or apparently according to the deal that could be extended further by mutual agreement, and we don't know on either as Sammy Wilson was talking about earlier on what the situation is with regard to northern Ireland in the long-term. And whether that will have a different relationship with the European Union than the rest of the United Kingdom.</s>GORANI: It sure sounds like it according to Michel Barnier --</s>BRENNAN: So there are exactly, I mean, there are a huge numbers of unanswered questions, despite two years, I was one of those who thought we shouldn't trigger article 50 because the government didn't really know what it was trying to negotiate, and now that harvest is coming home at this point. It's a pretty bitter harvest, and there are very few pickings for people to really understand what our future relationship is supposed to be in the longer term.</s>GORANI: And do you think Theresa May will survive this if parliament votes against her --</s>MORRIS: Well, again --</s>GORANI: And she loses --</s>MORRIS: Look, you're talking about scenarios that we haven't got to. Where we've got to tonight --</s>GORANI: It's all we've got --</s>MORRIS: No, where we've got --</s>GORANI: Yes --</s>MORRIS: To tonight --</s>GORANI: Yes --</s>MORRIS: And people like Kevin and other people in the opposition and other parties have said, we wouldn't ever get to the point where we had a draft withdrawal agreement. We have that tonight --</s>GORANI: Yes --</s>MORRIS: The cabinet has agreed it, and all of the detail that Kevin is looking for will be available tomorrow when the Prime Minister gives a statement, and then it will be for parliament to decide whether it wants to fulfill the band-aid to the referendum and secure Britain's future prosperity.</s>BRENNAN: But we also know --</s>MORRIS: It's a national interest, it's a national interest.</s>BRENNAN: We do also know that a large number of people in the cabinet said they were opposed to the deal tonight, and for the moment, they are keeping collective responsibility, they're keeping quiet. But I wonder whether over the next day or two rather like with Chequers, we'll see --</s>GORANI: Yes --</s>BRENNAN: Some of those people peeling off in resignations from the cabinet. We'll have to wait and see, but I suspect tonight's situation is not what the situation will be tomorrow or the day after.</s>GORANI: Thank you members of parliament, Kevin Brennan and James Morris for joining us, we really appreciate it. A quick break here on Cnn, we'll have a lot more when we come back, don't go away.