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Conservative Party Lawmakers Triggering That Vote Of No Confidence In Theresa May's Leadership To Be Held Later On Wednesday; The French Authorities Heading Up A Massive Manhunt For A Gunman Who Killed Three People And Wounded 13 Others In Strasbourg. Aired: 4-5a ET

Aired December 12, 2018 - 04:00   ET


MAX FOSTER, ANCHOR, CNN: Okay, Rosemary, breaking news here in London, as a no confidence vote has been triggered against the Prime Minister, Theresa May earlier than any of us expected. A vote set for later today as well.

Thanks for joining us. I'm Max Foster outside the Houses of Parliament for "CNN Newsroom."

Conservative Party lawmakers triggering that vote of no confidence in her leadership to be held later on Wednesday. She heard last night, but only heard just a couple of hours ago, speaking moments ago as well, she said she will contest that vote with everything she's got.

Diplomatic editor Nic Robertson is in Downing Street. Erin is in Brussels. Nic, we were scrambled, we knew something was up. We didn't know when it was going to happen. It all happened this morning, and interesting to hear how much gusto she's putting into here fight back.

NIC ROBERTSON, SENIOR DIPLOMATIC EDITOR, CNN: Max, I think this is very much in keeping with the Theresa May we have become used to over recent months. Look at the time she has fought on her feet in Parliament for hours against a huge criticism and swinging attacks on her ability to deliver a Brexit deal that she says is the best Brexit deal that is possible with the E.U. at this time, one that she delivers - she believe delivers on what the British people want.

So I don't think it was too much of a surprise that she would come out and speak as she did, saying that she will fight this, that it will be essentially time wasting and risk - a potentially disastrous outcome the time that it would take to elect a new leader would eat into the time to get any further reassurances that she has been looking for from European leaders or from the E.U. over in particular, the backstop agreement over the border between Ireland and Northern Ireland.

So she laid out the problems that would be inherent if that does become the reality that if there is a vote of no confidence in there, the Chief Whip, we saw him coming out of her offices here a couple of hours ago, Max, and of course, it's up to him now to get around and convince those 158 MPs that she needs to support her. She has had some senior Cabinet members supporting her already --

Michael Gove, Sajid Javid to name but two. Of course, stringing criticism from former Cabinet Minister Owen Patterson overnight. Another one of those MP's that has put in his letter to the 1922 Committee that's precipitated this vote.

So again, I would go back to her tone in this that she didn't sound as if she was on the back foot. She didn't sound overly strident. She sounded very clear and very composed about going forward, and I think that is very much in keeping with the nature of her character that she's shown us in recent months, Max.

FOSTER: Though it appears to be the tone that did it for her when she spoke to Parliament, talking about how she was going to delay that vote and go back to Europe, the hard Brexiteers saying here that they felt that she didn't feel look like a confident negotiator. She felt like she was just going back to see that she could do the best that she could rather than really fighting for those Brexiteers on her side.

ROBERTSON: And, of course, her point in part is that it's her and her team that have been there face-to-face having these negotiations, so there are some of her critics there, like David Davis, within her party, were actually the ones having those negotiations, but you know, I think you can look at this and you can see how the sort of more harder line Brexiteers will have recognized that there was a possibility that this was turning from Theresa May's deal to no deal - no deal that they could stomach getting out of the European Union without a deal in place and trading on WTO regulations, that that was potentially slipping from their grasp here as well.

The other options were getting more of a voice, like a second referendum, like as we heard from the Irish Prime Minister yesterday, saying that Theresa May can either extend the deadline of leaving or choose to not leave at all. We heard that from the European Court of Justice earlier this week saying that, in fact, that was something that the British could do unilaterally, which was to choose not to leave the E.U.

So all of these complexities began to become bigger part of the discussion and although perhaps low possibilities still possibilities nonetheless, and perhaps that is what has precipitated this, but what is clear is that there is a sort of double jeopardy on this, if you will, that if Theresa May does win the vote, there are many that believe that she can and may do, that they won't be able to challenge her leadership for another year, which would leave her path clear to some degree to push ahead with a deal that she has it perhaps with some of those little extra reassurances that Jean-Claude Juncker hinted at yesterday, Max.


FOSTER: Okay, Nic, thank you. So the next time we expect to see Theresa May is here at the Houses of Parliament for the question time really of her career, she'll then Chair a Cabinet meeting back there in Downing Street as she'll address the 1922 Committee tonight just ahead of the vote. We'll then get the vote, and we should get the result later tonight U.K. time.

Let's hear how Theresa May is going into this momentous day ahead of her.


THERESA MAY, BRITISH PRIME MINISTER: So Graham Brady has confirmed that he has received 48 letters from Conservative MPs, so that there will now be a vote of confidence in my leadership of the Conservative Party. I will contest that vote with everything I've got.

I have been a member of the Conservative Party for over 40 years. I've served it as an activist, counselor, MP, Shadow Minister, Home Secretary, and now as Prime Minister. I stood to be leader because I believe in the conservative vision for a better future, a thriving economy with nowhere and nobody left behind, a stronger society where everyone can make the most of their talents always serving the national interest.

And at this crucial moment in our history, that means a securing a Brexit deal that delivers on the result of the E.U. referendum taking back control of our borders, laws, and money, but protecting jobs, our security, and our precious union as we do so. Through good times and bad over the last two years, my passionate belief that such a deal is attainable, that a bright future lies ahead for our country has not waivered, and it is now within our grasp.

I spent yesterday meeting Chancellor Merkel, Prime Minister Rutte, President Tusk, and President Juncker to address the concerns that MPs have with the backstop, and we are making progress.

I was due to travel to Dublin this afternoon to continue that work, but will now remain here in London to make the case for my leadership with my Parliamentary colleagues. A change of leadership in the Conservative Party now will put our country's future at risk and create uncertainty when we can least afford it. A new leader wouldn't be in place by the 21st of January legal deadline, so a leadership election risks handing control of the Brexit negotiations to opposition MPs in Parliament.

The new leader wouldn't have time to renegotiate a withdrawal agreement and get the legislation through Parliament by the 29th of March, so one of their first acts would have to be extending or rescinding Article 50, delaying or even stopping Brexit when people want us to get on with it.

And a leadership election would not change the fundamentals of the negotiation or the Parliamentary arithmetic. Weeks spent tearing ourselves apart will only create more division just as we should be standing together to serve our country.

None of that would be in the national interest. The only people whose interest would be served are Jeremy Corbyn and John McDonnell. The British people want us to get on with it, and they want us to focus on the other vital issues that matter to them, too. Building a stronger economy, delivering first class public services, and the homes that families need. These are the public's priorities, and they must be the Conservative Party's priorities, too.

We must and we shall deliver on the referendum vote and seize the opportunities that lie ahead. But the Conservatives must not be a single issue party. We are a party of the whole nation. Moderate, pragmatic, mainstream. Committed to reuniting our country and building a country that works for everyone. The agenda I set out, in my first speech outside this front door, delivering the Brexit people voted for, building a country that works for everyone. I have devoted myself unsparingly to these tasks ever since I became Prime Minister and I stand ready to finish the job.

Sir Graham Brady has ...


FOSTER: Theresa May was told last night about this leadership contest, and then we heard from Sir Graham Brady who is in charge of the contest effectively for the Back Bencher Party here that he wanted to get the announcement out before the markets opened because there is concern in the markets about all the uncertainty around this. Let's go to Samuel to see how they did open. What did you see, Samuel?

SAMUEL BURKE, TECHNOLOGY AND BUSINESS CORRESPONDENT, CNN: Well, Max, it's interesting you just used that word, "uncertainty," the same word that the Prime Minister was using in her remarks there a few seconds ago, and that's exactly what we're seeing play out. We saw the pound drop below $1.25. Keep in mind that was a currency that traded at a value of about $1.44 just before Brexit.


BURKE: So it's hovering near though not quite at an 18-month low at this point. There is just so much uncertainty when you speak to currency traders right now. They say, listen, the pound could have dropped even more right now with this announcement, but the fact is that so many traders have just walked away from the great British pound because there is so much uncertainty.

So there are a lot of scenarios playing out here. This could make it more likely that there is a delay in Brexit, which a lot of people in the market would like. But this could make it more likely that the U.K. crashes out of the European Union, which most economists are advising against.

So again, you see this uncertainty, but important to note that even though the pound is fluctuating, it went down, though it's starting to come back up, at the same time we see the FTSE opening, and it was actually a bit higher.

Now, sometimes when the pound is weak, that can be very good for U.K. companies. Also, we're seeing a window in the U.K. - U.S.-China trade war, rather, and so there's some good news there. But overall, you have to keep in mind that the pound has just gone down incredibly for Brexit and arguably that has had the biggest tangible effect - Brexit, the biggest tangible effect that it's had is on the value of the pound. FOSTER: Okay. Samuel, thank you. We're going to speak to speak to

Hadas now because you were here when this news landed on us this morning. We were expecting it around this time, but perhaps not at that moment.

HADAS GOLD, CORRESPONDENT, CNN: We were not expecting it as quickly as it came, and then suddenly get the news, the press release that came out from Graham Brady to announce that they had reached that threshold and then he came out here pretty quickly, it was really stunning to see. He did tell us that he actually notified Theresa May last night that the threshold had been reached and that she wanted to get the process done and over with as quickly as possible.

I mean, today as she announced earlier, she has canceled her trip to go visit with the Irish Prime Minister. She's going to face Prime Minister Questions in House of Commons in a few hours. That should be always interesting. Then she is going to Chair a Cabinet meeting and then she's going to address that 1922 Committee that Committee that Graham Brady Chairs and he will - the one that got all the letters in and then the Members of Parliament will vote on that no confidence vote.

FOSTER: The commotion behind you for the viewers' information is Graham Brady. He is the star at the moment, isn't he? What happens is you need 15% of Conservative MPs to vote for this.

GOLD: Right.

FOSTER: But then when it comes to the actual vote, she needs more than half of the Conservative MPs to say no to her, so it's not over yet for her and she's going to fight on and she's fought on before and won.

GOLD: Right, she is going to fight on and I think what is the interesting is to see some of these other members and some of these Cabinet ministers, people who have been talked about as possible leaders that could take over the party, throwing their support behind her and saying this is not the time. we need to be supporting Theresa May through this process because, as she has noted repeatedly, and as she's warning to not only the Members of Parliament, but to the public, if I get voted out, Brexit might, A, not happen, might be delayed, it might be a softer Brexit, and this is not what she believes people voted for.

FOSTER: Let's go to Erin on that because the idea that Brexit could be delayed, we have learned, haven't we, from the courts that that actually is under U.K. control right now.

ERIN MCLAUGHLIN, CORRESPONDENT, CNN: The Court of Justice has ruled that the U.K. could in fact unilaterally revoke Article 50, which is what triggered the Brexit process in the first place, but of course, there's no indication at this point from the British government that that is, in fact a possibility. Although, that is a card that could be played that remains on the table.

We have yet to hear any sort of reaction here in Brussels to this latest development. E.U. officials, E.U. leaders tend to not to like to comment on the domestic internal politics of member states, but I think it's fair to assume that they're watching this situation unfold with concern.

In conversations I've had in the past with diplomats, E.U. officials, Theresa May is seen as someone that they can negotiate with. She's a respected politician in the words of one diplomat as she's the quote, "only adult in the room" as they look at other alternatives there in the U.K.

Theresa May, from their perspective, is the only palatable option that could carry this process forward. That being said, there is not much at this point it seems that E.U. leaders, E.U. officials are willing to do to help the U.K. out of this mess.

I was speaking to one senior official last week, and he was saying that there's no master plan in Brussels to save this situation.


MCLAUGHLIN: We saw the British Prime Minister, Theresa May, yesterday on this sort of whistle stop tour. She went to The Hague. She went to Berlin. And then, here in Brussels. She was met with warm smiles and handshakes, but little substance. Donald Tusk, the President of the European Council, summed it up in his tweet saying, "The E.U. 27 wants to help. The question is how?" There are no easy answers at this point, Max.

FOSTER: Okay, thank you to Erin. We are joined now by the Sir Brady who is the Chairman of the 1922 Committee, who have had a very busy few weeks and days, but you finally got the number of letters you needed last night to trigger this contest.

GRAHAM BRADY, MEMBER OF PARLIAMENT, CONSERVATIVE: That's right. The process is quite simple. If 15% or more members of the Parliamentary conservative party write letters to the Chairman of the 1922 Committee seeking a confidence vote in the leader of the Party, then it's incumbent on me to inform the leader of the party, to consult with the leader of the party, and then to organize a ballot as quickly is reasonably practical.

So I spoke to the Prime Minister last night, when she returned from her visit to Berlin and Brussels, we discussed the timing. She was very keen to have matters resolved as quickly as is possible. And we, therefore, made the announcement early this morning. She will address colleagues in the 1922 Committee at 5:00 this afternoon, and a ballot will be held immediately after that between 6:00 and 8:00.

FOSTER: And when should we expect the announcement to be made?

BRADY: We will count as soon as possibly can after that, and we will make an announcement within an hour, so I hope before 9:00.

FOSTER: If the vote goes against her, if we go through the two scenarios, what's the process then? BRADY: Well, I think it's important to go through both scenarios, and

not to presume. If the vote goes for her, then there is confidence in her as the Conservative Party leader, and then there is also a 12- month moratorium. The process could not be repeated within a 12-month period.

FOSTER: She's safe for a year in her position?

BRADY: Indeed. If it were to go the other way, then we would begin the process of arranging a leadership election to elect a successor. In the meantime, of course, the Prime Minister remains the Prime Minister until there is a successor in place.

FOSTER: And the concern about a leadership contest at this time around Brexit and with March looming is that the Conservative leadership contest process is very likely to go out to all the party members, eventually, don't you? What sort of contingencies have you got for speeding that process up?

BRADY: Well, certainly I ran the process in 2016 when we were able to run the Parliamentary stages very quickly. It took no more than ten days. It might even be possible to conduct the process of that sort more quickly. But as you say, if there are two candidates, and that is the expectation in the Parliamentary Party. Those two candidates forward as candidates for the party in the country, then there would be a vote in the ballot and that inevitably takes longer.

The exact time table is something that would have to be agreed by the Board of the Conservative Party but that obviously is something that we should address if the situation arises.

FOSTER: You're confident there is a - if there is the resolve, you can get this process speeded up from the process that we're used to.

BRADY: I think if it were to be necessary, there would be - we'll be able to move as quickly as reasonable.

FOSTER: You're known for your discretion.

BRADY: Thank you.

FOSTER: But can you describe the mood amongst the MPs that have been coming to you because the whole debate has been rotating around you for the last few days.

BRADY: I shouldn't really be drawn into that. I think, today, my role is very clear. It is to run a scrupulously fair and proper process, and I think it's important that I am entirely neutral and independent in that process, and I think if I started to comment on what colleagues have said or who thinks one thing or another, I think I would inevitably be drawn into the debate.

FOSTER: In terms of the time of your announcement, it was made before the markets opened, was that your decision or was that on advice to the Prime Minister? BRADY: It was deliberate. We were conscious of that speculation over

recent days and weeks and has on occasion had an effect on the markets. Particularly, in recent days, there was much of the speculation and it is entirely unfounded, but we thought that when we were making a serious announcement that the opportunity has important consequences that we ought to make sure it was announced before markets opened.

FOSTER: For the international audience, that won't be perhaps aware of how unusual this situation we're in right now. How would you encapsulate the pressure on Parliament and the challenge on Parliament right now?

BRADY: I suppose what I say is that the circumstances of the Parliament would know overall the government majority are inevitably more pressured, and more difficult, and less predictable ...


BRADY: ... than is normally the case in a Parliament in this country. Mostly, British Parliaments have a majority for one party or another, and we don't have that at the moment. So it is a time when we have got some complex decisions to take as a country, and it's a time when it is much harder to make decisions in Parliament.

FOSTER: Okay, well, thank you very much and you've got a very busy day ahead, a long day. Appreciate you speaking to us.

BRADY: Thank you.

FOSTER: Messages of support for Mrs. May quickly appearing online. Foreign Secretary Jeremy Hunt tweeted "I am backing Theresa May tonight. Being Prime Minister is the most difficult job imaginable right now, and the last thing the country needs is a damaging and long leadership contest. Brexit was never going to be easy, but she is the best person to make sure we actually leave the E.U. on March the 29th."

Amber Rudd, a member of Parliament also tweeted, "The Prime Minister needs support to deliver on Brexit and the domestic agenda." Now, Theresa May's leadership hangs in the balance as we have been hearing as a no confidence vote is being triggered against her. Can she survive as leader? More on that ahead, plus a look at how markets are reacting to all this breaking news.

Plus, we've got the French police on a hunt for a suspect they already tried to arrest hours before they say he opened fire on Christmas shoppers. More on the investigation in Strasberg just ahead.

Recapping our breaking news from here in Westminster. The U.K. Prime Minister Theresa May's battle for survival, Conservative Party lawmakers, a group of them, at least, triggering a vote of no confidence in her leadership to be held later on Wednesday. She spoke just a few moments ago.

(BEGIN VIDEO CLIP) MAY: So there will now be a vote of confidence in my leadership of

the Conservative Party. I will contest that vote with everything I've got.


FOSTER: Coming up on "CNN Talk," we are going to be here on Abington Green, all morning covering the unfolding events in the British government and Brexit as well. We want to know what you think. Should British lawmakers replace Theresa May in the midst of the Brexit crisis?

Log on to to have your say. "CNN Talk," starting at 12:00 p.m. here in London. That's 8:00 p.m. in Hong Kong. Now, we will have much more on the U.K.'s no confidence vote in the Prime Minister in just a few moments, but first, we want to get you the very latest on another big story that we're following.


FOSTER: The French authorities heading up a massive manhunt for a gunman who killed three people and wounded 13 others in Strasbourg. The suspect they are looking for was already known as a possible threat.

In fact, they attempted to arrest the man that very morning before the shooting happened. But around 8:00 in the evening, Tuesday, local time, a gunman entered the perimeter of Strasberg's Christmas market and began shooting at passersby, many of whom were in the middle of their Christmas shopping.

France has raised its national security threat level to emergency terror attack status. Melissa Bell joins us from Strasbourg with more -- Melissa.

MELISSA BELL, CORRESPONDENT, CNN: Max, a clearer picture is emerging of precisely what happened here in Strasbourg. As you say just around 8:00 p.m. last night that gunman made his way down this road and into the side streets of this Christmas market, attacking people. He was bearing both a knife and a gun, Max.

The police figures on the death toll have been fluid and changing constantly. The very latest that we have is that two people are confirmed to have died and about 14 to have been injured with seven of them in a critical condition. This just behind me, one of those side streets on which some of those people were attacked. You can see there the blanket that remains that was used to cover one of the victims last night in what would have been fairly chaotic scenes.

Now, well more than 12 hours after this rampage began here in the Christmas market, Max, the gunman remains at large. What we know for sure for the time being is that five people have been detained as part of what is an anti-terror investigation, but the man himself, the gunman is not only at large, but according to France's junior interior minister speaking this morning, could well have flown the country already. Strasbourg is of course very close to the German border, and although

that new high level of security alert that's been put in place throughout France ensures tighter border controls, it is not clear yet whether said the junior interior minister whether or not he had managed to make it outside of France's borders.

FOSTER: This is a bit of a disaster isn't it for the security services, considering the arrest or the potential arrest before this happened and the fact that this attacker might have got out of the country.

BELL: That's right and we're learning a little bit more about the profile of the man involved. As you say, well known to the police. He had been in and out of prison several times. And whilst he had never been condemned, he had never been charged with a terror offense, his had been common law offenses, common law crimes that he had been charged with. He was understood to have become radicalized when in prison in the last few years, and it was that prison radicalization, Max, that had led authorities to put him on that watch list, the famous "Fichier S watch list" that we talk about every time one of these terror attacks happens.

He was on that watch list and so he should have been being carefully monitored by authorities. Now, we understand that police had sought to take him in for questioning yesterday morning and that some of his accomplices in the crime for which he was being sought to be questioned had been taken in, and perhaps that is what triggered his attack in the evening.

He wasn't home when the police got to there. So clearly, lots of questions about why he wasn't being more closely watched, how he could have come across the weapons that he was carrying and the French press are reporting that grenades were found at his house, and the question, of course, now of why this man has so far failed to establish where a man who is not only known to services is but also a man who is known to have been wounded.

As he went on this rampage, we understood that there was - fire was exchanged between himself and security forces at, at least two different points and that he and one member of the French military were wounded in those exchanges of gunfire. So a man remains at large this morning, Max, who is known to authorities and who is known to have been wounded.

FOSTER: Okay, Melissa in Strasbourg, thank you very much indeed. More on that as the hunt goes on. British Prime Minister, meanwhile, hours before facing a confidence vote says a change in leadership right now would be bad for the country and bad for Brexit. The case she's making for staying in power just ahead.


FOSTER: A vote of no confidence in the British Prime Minister Theresa May has been triggered by her party here in Westminster. The ballot of conservative MPs will be held later on Wednesday with the results being announced in the evening. Just moments ago, the Prime Minister vowed to fight that challenge.


MAY: Sir Graham Brady has confirmed that he has received 48 letters from Conservative MPs, so that there will now be a vote of confidence in my leadership of the Conservative Party. I will contest that vote with everything I've got. I have been a member of the Conservative Party for over 40 years. I've served it as an activist, counselor, MP, Shadow Minister, Home Secretary and now as Prime Minister.

I stood to be leader because I believe in the Conservative vision for a better future, a thriving economy with nowhere and nobody left behind. A stronger society where everyone can make the most of their talents always serving the national interest.


FOSTER: Hadas Gold is with me here outside Parliament, Nic Robertson is in Downing Street, two very different words being used for the Prime Minister today, Nic, one of them being stoic, the other one being stubborn. How do you think she's going into this momentous day for her?

ROBERTSON: With as much stoicism and stubbornness as can muster. This is essentially what she said in that speech that she's ready for the task ahead, that her detractors who would have a vote of no confidence in her risk the stability of the Brexit negotiations, the timing of the negotiations. Therefore, the stability and the economy of the country. Nothing could be at greater stake.

She has pledged and worked to this and since she took office almost two and a half years ago, we've seen her be harangued, lambasted, almost cut down in words in the House of Parliament for hours and hours at a time so she is well used to the criticism. This cuts to the worst of what any Prime Minister would want to have, that their party loses faith in them and their ability to do the job.

She has seen this coming. She has said all along that she would face down this challenge, and there are those around her that would believe that she can get this 158 votes, and that's what she appears on the surface to remain confident in.

Again, later this evening it may be a different story, but as you say, stoic, stubborn, both seem to describe aptly the Prime Minister's mood going into today, Max.

FOSTER: Nic, thank you. Hadas, and the atmosphere here, I mean, it's exciting because people love these moments in political history, don't they? But also, there's a great sense of concern because we've got Brexit looming.

GOLD: Yes, and it's also there's a huge concern in the business community along the markets because the only thing in the business community really wants is just certainty. They just want to know what's going to happen. Hard Brexit. Is it going to be Theresa May's deal? What is going to happen? And there has been manufacturers and companies here that have just been waiting, and this obviously does not help that process along.

Especially if it means that this process is going to be extended in some way. And I do also think that all of this uncertainty, the political mess that we have here right now is only going to further harden the European leaders and the E.U. from saying, "No, we need to have a really hard backstop and, no, we can't necessarily know to negotiate with you because we don't know who we're going to be negotiating with perhaps in a few weeks," and this is only, I think, going to ...


GOLD: ... further harden their position. They're probably going to be even less likely to budge on anything than they might be now if they know that they're going to be dealing with Theresa May over the next few weeks.

FOSTER: Nic, one of the concerns in Parliament as well is if Theresa May doesn't win this vote, then you have actually got a few hundred Conservatives deciding who the future Prime Minister will be and that is not right in the current circumstances. It should go to a general election. How would you think that's going to play out?

ROBERTSON: Well, I think that the Conservatives would make the argument as well that although it's down to the MPs to determine who the final two candidates will be, it will be the broader Conservative Party itself. You know, tens of a hundred thousand people or so that will get the postal ballots, the pick between that final two, and the final two may well be a Brexiteer and somebody who might be a softer Brexiteer, even a remainer may be in the final running. Not clear.

But it will be an argument they will face, for sure. It's likely an argument that the opposition party, Labour will put forward. There have been calls among some of the other parties, I think noticeably - notably the SNPs, Scottish National Party, 35 MPs in Parliament speaking about their frustrations that the Labour Party hadn't called a vote of no confidence in the government.

So there certainly will be moves afoot arguably within Parliament to say that this won't do, this won't stand, that we need to take this back to the people across the board in a general election, and of course, for the Labour Party, they've seen this as a potential route to having a second referendum. Something that the hardliners who brought down Theresa May absolutely don't want, something that they have campaigned hard against.

So for them, that would be a real failure if they were to lose their vote of no confidence or no confidence in the Prime Minister and then find themselves faced with a scenario that could bring about a change of government or potentially a second referendum, Max. It's all - it does seem very fluid, very variable and there are many different scenarios that could be in play in this vote of no confidence has really just multiplied the complexities and difficulties that lie ahead before the 29th of March next year.

FOSTER: Okay. Thanks, Nic. Joining me now is James Blitz, he is the Whitehall editor for the "Financial Times." It's interesting to see Jacob Rees-Mogg has really led this coup asking for her to resign. It seems to suggest he is not completely convinced that she's going to lose the vote.

JAMES BLITZ, WHITEHALL EDITOR, FINANCIAL TIMES: Well, that may be the case. If this had been happening four or five weeks ago, I would have said she's definitely going to win this quite easily. Now, maybe a little more difficult. Remember, it's a secret ballot, and so one has to - you know, this is a moment where MPs are going to take stock not just of what's happened over the last two years, but also what's happened in the last few days, especially with the fiasco over the vote.

I still think the betting is she'll come through, the question is of course, how well she comes through.

FOSTER: Is the onus on the alternatives, make their case for the next few hours to get a proper alternative to Theresa May, even for all those people that don't believe in her, but don't see an alternative?

BLITZ: Well, publicly no, they won't do that, but privately, they will be saying, look, if she is toppled, then I will do this. You'll be on board with me. And so the problem all along however has been underneath all this is there is no obvious candidate to take over, and there is no clear policy that they can all gather around if her deal goes down with her. So if there was a consensus in the Conservative Party around can another person, Boris Johnson or around Norway plus and Amber Rudd, then those two would have a chance, but the fact is that the party is very fragmented indeed, and that's what makes this so difficult to predict.

FOSTER: So her strength and her confidence at Downing Street this morning comes from the fact that she knows there isn't an alternative right now.

BLITZ: Yes, that is right, but I think a lot of MPs will be saying a couple of things. One, we could be moving to an election, it's not impossible. In that case she's the person we've got. Is that what we want? That's one of the things that will be preying on their minds.

The second thing that will be preying on their minds is, if she stays, what's going to happen? We go through to mid-January. We have this vote in the end. It's her vassalage, basically her deal, versus chaos. I mean, and really, a real chance of no deal this time, because she -- her goal is to push things right to the brink, and they'll have to think as well is that what we want?

Now, it's interesting this morning that David Gauke, the Lord Chancellor, was saying - was suggesting that actually if she did go, well, you might have to extend the Article 50 hearing. There might be a few MPs who think that the Europeans will give that Article 50 extension if there is a change of leader. I'm not sure they necessarily will, but that might persuade one or two of them to go against her.

FOSTER: She goes back to Europe now after this if it's a really divisive vote and she stays in power.


FOSTER: Even more weakened as a negotiator. So they are even less likely to give her what she wants.

BLITZ: Yes, I've never thought much was going to come from the European side of things. I mean, it's very clear that the withdrawal agreement is now bolted down. There's only cosmetic changes that can be made. Her goal by staying on until - and by pushing things into mid-January, as I say, is to basically bring the vote to such a point where if she's voted down, where if a deal is voted down, we're effectively staring at no deal. She's really maximizing that form of leverage, but that's terribly uncomfortable. Really, people in the Cabinet don't like it.

FOSTER: A lot of your readers also are very concerned about the markets, they seem okay, today, and that's partly, I presume, because they decided to make this announcement before the market opened today, so some sort of certainty there.

BLITZ: There's a presumption, I suppose, that Mrs. May is going to come through this, and this is just a blip. If she were to lose office tonight in the vote --

FOSTER: What would happen to the markets?

BLITZ: Well, I'm not a market specialist, but you would certainly be in a no man's land where really people wouldn't be able to see what was happening within the Conservative leadership contest. I covered the last Conservative leadership contest that went to the country in 2005. David Davis versus David Cameron. It lasted three months. I mean, this is a long process.

FOSTER: Graham Brady, who ran that process, didn't he, last time, I think and I've put him earlier on, and he said there is a way of speeding this up, but it does rely on the fact that only two candidates would come through in the election process.

BLITZ: Yes, and the problem is that if you have the contest now, at least five will run, possibly more, and the trouble is that the MPs have to whittle those down in ballot after ballot under the Conservative rules. That is going to take time.

FOSTER: And so the onus really is on the Brexiteers, the remainers and the leavers to actually sort their own camps out and come forward with one candidate each because that's - they're the only two possible options surely going into an election.

BLITZ: Yes, that is - into a leadership election, yes. Those are. In the end, one assumes that it will be something like Norway and Norway candidate versus a Canada plus candidate.

FOSTER: Who would --

BLITZ: Well, I mean, on the Canada side, clearly Boris Johnson is the front person. The trouble is, there is a lot of doubt about whether Boris Johnson will make it to the final two ...

FOSTER: Dominic Raab is a name that --

BLITZ: Dominic Raab is another name. Dominic Raab, Boris Johnson, Jacob Ree-Smogg, are the three standard --

FOSTER: David Davis?

BLITZ: Possibly David Davis - although some people are less sure. They would certainly have to work out among themselves who was the standard bearer on that side.

FOSTER: What about the remain side?

BLITZ: Well, on that side, you've got Amber Rudd. She is the clearest so far in saying that - you have Sajid Javid, he is also a possibility.

FOSTER: Jeremy Hunt is he one?

BLITZ: Yes, I think those are the three that you would - again, they would - they would have to work that out, but as I said, they'd be grown-ups and agree who they're going to support. It's really hard to know. I mean, they clearly --

FOSTER: So this fate of the nation --

BLITZ: Well, I mean, the 2016 contest, which saw the candidates self- destructing one after the other, Michael Gove, Boris Johnson, Andrew Leadsom was hardly a grown up display, but one can't be under the --

FOSTER: I mean, our viewers and your readers, they are pretty fed up on that with Parliament because whatever side you're on, they are not leaving. This place isn't organizing this process very well. They're not thrashing through it very well, which is a great argument to the likes of Jo Johnson to say we should have a second referendum because this lot can't sort it out.

BLITZ: Well, the chances of second referendum clearly go up the deeper this chaos gets. I think that is the case. In the end, that is a decision for Labour. We haven't discussed Labour, but in the end, it is up to Corbyn, McDonnell, Keir Starmer as to whether a second referendum is going to come in the fore. Now, one of the things I think that increases the chance of a second referendum is you really can turn around as a Labour leader and say, look, for goodness sake, this thing is a complete mess. You're holding this leadership contest. You're actually putting it to a tiny number of Conservative activists what the future of the country is, why don't we just put this to the country.

That's an argument you could begin to make, so in that sense, for those who advocate a second referendum, if we are now plugged into chaos by a leadership contest, that will help.

FOSTER: Then the argument about the question will begin?

BLITZ: Of course.

FOSTER: James Blitz, thank you. Theresa May, despite facing that no confidence vote, says she'll defend her leadership with everything that she's got. Why she's clinging to power in the face of such resistance from her own party. That's next. Plus, a check on how those markets are reacting to this latest news. They seem pretty relieved, which is extraordinary.


FOSTER: Let's return to the breaking news this hour, U.K. Prime Minister Theresa May facing a leadership challenge, a vote of no confidence by her party will be held later today. Mrs. May has vowed to give the fight for her political life her all, saying that a change in leadership is not in the national interest and that she wants to quote, "finish the job on Brexit." Let's see how the markets are responding to all of this. Huge amount of concern last night about this, Samuel. How are they looking this morning?

BURKE: Well, Max, it's fascinating. You are looking at the stock market right there. We're seeing a lot of green there, but what's more interesting is what's happening with the pound since the last time you and I talked this hour, if we can just put the pound numbers up on the screen, the pound has actually gone up next to the dollar. We're seeing it above $1.25 there. So you're probably thinking why in the face of so much uncertainty in the words of the Prime Minister herself, would the pound be going up?

Well, I'm talking to traders, and they're saying, look, it's only 15% of Conservatives that have called for this no confidence vote. They are looking at betting web sites, a lot of the traders, that's what they do and they look at it and they think that actually Theresa May has a good chance of coming out as Prime Minister out of this no confidence vote, so that's one thing that they are considering and that's why we are seeing the pound go up right now. They think that Theresa May will be Prime Minister tomorrow.

On the other hand, you have to remember that there has been so much volatility in the pound, Max, since the Brexit, and certainly, since the Brexit vote and certainly in the past weeks, actually a lot of people have just walked away from the vote, sometimes currency traders think that they have got insight that they maybe know something that the general populace does not.

In this case, there is so much uncertainty on so many fronts, they've just walked away, so there's very little volume and sometimes just a little bit of news like that that can make it go up because so many people have shorted the pound.

Also, important to know if we go back to those stock market numbers, the market is up. Sometimes when the pound is down as weak as it is, even though it's up a little today, it's still at a very weak point, that can be good for the stock market. You see the FTSE 100 up there about 1%. A weak pound can be very good for a lot of U.K. companies that have a lot of their markets - have a lot of the market in dollars really. So you've got good news there, if the pound is weak for them, also

good news on the China-U.S. trade war. So markets are up right now.

FOSTER: Yes, but I guess, the question now moves to the vote tonight, and if she remains in power, then there is no uncertainty. She loses her position, then there's going to be a huge amount of uncertainty for weeks potentially, and that's what's going to really upset the markets.

BURKE: Absolutely. Right now, the market is counting on her to win. They would love that scenario because that gives them one year of certainty in theory. That means she stays in office and she can't wait another one of these votes for another year.


BURKE: If she does not win this vote that would cause huge uncertainty. You could expect the pound to go down even more. You might expect markets to go down and it's really unclear then what could happen. There are so many different scenarios that the market is looking at. Could that mean in the short term that the E.U. extends the deadline and then you might see a little bit of assuring up in the market or could it mean that Jeremy Corbyn might eventually come to power or somebody who wants a hard Brexit over on the Tory side? Those situations are very difficult for a lot of people trading in the market to see.

So if that happens, if Theresa May is not the U.K. Prime Minister by tonight, expect to see major volatility, Max.

FOSTER: Okay, Samuel, you very much, indeed. We'll be back in just a moment with a leading Brexiteer, and what - the man many people describe as the father of euro skepticism here in Parliament.

So we could have a new Prime Minister potentially in the coming weeks here because a vote of confidence is going to be held tonight in the Prime Minister. It's off the back of all of the concerns around Brexit as well, how she's handled the whole process of Brexit. With me here is Bill Cash, he is a Conservative MP. He is a Brexiteer, and he is also the man who many people argue sort of created the euro skepticism within the party.

BILL CASH, CONSERVATIVE MEMBER OF PARLIAMENT: Well, I mean, I'll leave that for the historians to work out, but I did lead the mass street rebellion, and I have voted consistently against all the treaties, including of course the Lisbon Treaty, but I voted for the Withdrawal Act because the Withdrawal Act, which did actually underpin and actually endorse the vote of the British people in line with our manifesto commitments in the general election, no single market, no customs union, but also that we would repeal the European communities act on which the whole of our arrangements with the E.U. depends.

And the other point I would add is that the manner in which she herself expressed it in the language in the house speech was this, she said, we will never truly leave the European Union unless we regain control of our laws. Now, this is an American audience as well, can I simply say, the idea

that America for example with the government, by shall we say Mexico and Canada, by a majority of vote all the Supreme Court could be overridden by the Supreme Court or a similar entity is beyond the imagination I would hope of the American people.

We would be in a similar kind of situation under the withdrawal agreement and the failure to really repeal the 72 Act in a way not that was not promised just alone, but the fact that it's now the law of the land.

The law of the land says the European community in 1972 is repealed from the 29th of March, 2019. That means the whole shooting match. This withdrawal agreement contradicts that, for a start, because it doesn't actually completely repeal the 72 Act. That's number one. Number two, in relation to Northern Ireland, there's much talk about the backstop, and it's very important because the E.U. will have a veto over that. But it goes deeper than that as well in my opinion, and it is this.

The constitutional arrangement of the United Kingdom includes as its absolute center is that Northern Ireland is part of that United Kingdom.


CASH: That is also effected by the withdrawal agreement because of the differences that they're bringing in as to the manner in which the Northern Ireland will be treated from the rest of the U.K. These are really fundamental questions.

FOSTER: So you're united bizarrely with people on the remain side who don't like this deal, but you were very early to voice your dissatisfaction with the Prime Minister. You sent in your letter of no confidence effectively to the Conservative Party here. That was a while ago.

CASH: Yes.

FOSTER: You have obviously got this group of MPs around you who look to you for your advice, they were tipped in your direction after her decision to delay the vote. So what was it - what was the tipping point for them?

CASH: Well, I made it very, very clear in the speech I made yesterday, what I thought about that. Pulling the vote was undermining the whole of the fabric of public trust. The reality is that many, many hundreds of MPs were going in for that debate, we were going to have a vote on that. That also was prescribed. That was promised. Even that day they were saying that we were still going to have this, and then they pulled it.

That sort of thing demonstrates the degree of uncertainty that she has created by the way in which she's gone about all this. The failure of the negotiations. My European scrutiny committee, which is - we go back to 1972 as a committee, I have been on the committee 33 years. We issued a report in March, and we said the government is simply not being robust enough. It is not - it's suffocating the E.U. It is not actually doing the right kind of negotiations, and we're relying on them to dictate the terms of reference.

FOSTER: For on the vote tonight though, at the moment all the soundings appear to be that she's going to win it because she needs a clear majority. Do you think she will?

CASH: I just don't know. And actually, the short answer is it would be very foolish for anybody on either side, including us here with the remainers because mentioned them just now. I call them reversals as well. The reality is that this business of control over laws, really turns on this, that inside the council of ministers, our laws would be made behind closed doors by 27 other member states. We wouldn't even be there.

For an American audience, they couldn't even imagine that being the case, and furthermore, we would also end up without even recording of a transcript of what was said when those decisions were imposed on us.

FOSTER: Bill Cash, the original Brexiteer. Thank you for joining us tonight on CNN. I'm Max Foster, much more on our breaking news from here in Westminster after this short break.

Thank you for joining us. I am Max Foster in London. This is "CNN Newsroom." We begin with breaking news out of London. U.K. Prime Minister Theresa May battling her political life. A vote of no confidence in her leadership has been triggered by her party. A ballot of Conservative MPs will be held later on Wednesday.

Speaking on the steps of Downing Street an hour ago, she vowed to give all she can in her fight for survival as leader of her party.


MAY: Sir Graham Brady has confirmed that he has received 48 letters from Conservative MPs so there will now be a vote of confidence in my leadership of the Conservative Party. I will contest that vote with everything I've got.