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May Faces No-Confidence Vote after Brexit Defeat; Financial Impact of U.K.'s Uncertain Future; Furloughed Tax Workers Called Back to Work. Aired 1-2a ET

Aired January 16, 2019 - 01:00   ET


[01:00:00] JOHN VAUSE, CNN INTERNATIONAL ANCHOR: Hello everyone! Wherever you are around the world, great to have you with us and welcome to this special Brexit edition of CNN NEWSROOM. I'm John Vause.

MAX FOSTER, CNN LONDON CORRESPONDENT: I'm Max Foster in London where the British Prime Minister was bracing for Parliamentary to reject her Brexit deal but few expected the biggest foe ever against the sitting government. And now the Prime Minister is facing a no-confidence vote that could bring a general election and the end of her time in office as well. But it's unlikely that that will happen before the end of March when the U.K. will leave the European Union with or without a deal.

Mrs. May is expected to go back to the E.U. asking for further concessions. Others are more determined than ever to hold a second Brexit referendum as soon as Nick Glass begins our coverage.


NICK GLASS, CNN CORRESPONDENT: 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. This is 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 say her appeal. She was on her feet for over 20 minutes.

THERESA MAY, Mr. Speaker, this is the most significant vote but any of us will ever be partial 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.

GLASS: Mrs. May again argued her case but the house was in raucous combative mood. The Speaker had to quiet things down.

JOHN BERCOW, SPEAKER, HOUSE OF COMMONS: The House must calm itself. Zen, restraint, patience.

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

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.

GLASS: By the end, she was almost having to shout.

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

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

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

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

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

GLASS: And in his excitement, off came the glasses.

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.

GLASS: 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.


FOSTER: Joining me now CNN Political Contributor Robin Oakley. I mean, it was a damning defeat on you know, by historical standards. Her party deserted her and yet she limps on.

ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: Absolutely. It was the biggest ever defeat in living memory. Probably the biggest defeat in a century and a half for a government. And on a major piece of legislation, there could be no more damning verdict than this. But what we're faced by now is a total shambles. Britain has become a laughingstock in the eyes of the European negotiators and the 27 countries across Europe. They're now saying, what the hell do you want? What does Parliament want?

OK, it doesn't want this deal, what does Parliament want. We can't do anything to help Theresa May or Britain in extricating itself in the E.U. until we know exactly what you want.

[01:05:24] FOSTER: Look at the scale of that defeat. They want something very significant in order to make up for that. And Europe can't offer that. The have to offer some tinkering around the edges but that's as far as they can go right? OAKLEY: Had Theresa May lost by you say 70 or 80 votes, she could go to Europe and say give me one more tweak, one more legal assurance on the backstop and I can probably bring people run. With a margin like this, no. There is absolutely no clear way of proceeding from this point. The question now is to what extent Parliament itself seizes the initiative from the government to some backbenchers lawmakers are trying to do to put up their own plans and to bring those before the House of Commons, get support behind those.

Theresa May at the moment of course, we've got the vote of confidence to deal with. There's no guarantee that she wants that. Of course, we all expect her to win the vote of confidence that Jeremy Corbyn, the Labour leader is staging. But you know, it's conceivable. There can be accidents. People can get caught in lifts, votes are going to be tight. Even though the DUP, the Northern Ireland MPs who voted against her in the Brexit deal debate, they will come back and they will support Theresa May.

So -- but even if she gets through that vote of confidence, where does she go next. She said she's going to talk to other people across the House of Commons. But one of her big problems all the long as she hasn't been inclusive enough. She hasn't tried to reach out to others until she found a few trade union leaders in the very last week.

FOSTER: It took three days to get her plan to be together to be presented by Monday.

OAKLEY: Sure, yes, and it looks very, very difficult to see what she can do in that time scale. Now all kinds of questions arise. Will we see a big momentum behind a second referendum, a second people's vote? That's one of the key questions now. And a lot of the MPs in Parliament who've had their doubts about that are now beginning to come round and to feel that the people gave them this difficulty in the first place.

You know, we've had direct democracy and a referendum instructing Parliament. Parliament on the whole most MPs were remainers has found it difficult to respond to that request in a meaningful way. So perhaps is the answer some are saying just throw this question back to the people.

FOSTER: What about the idea of just a delay because Europe asked the talk in Brussels right now but it's not actually the talk here is it?

OAKLEY: The thing about revoking Article 50, the mechanism for putting Britain out with the withdrawal deal, Article 50 is not going to be extended by the European Union. All 27 countries would have to agree. If Britain says hey hang on, can we delay this for a bit? They might be prepared to delay it if Britain has another referendum. That might be a sensible move.

But on the whole, the mood from Europe is OK, we'll respond if we know exactly what the British Parliament wants. But you know, that is as foggy as anything. And in the meantime, there's a pressure also on Jeremy Corbyn, the Labour leader who staging this vote of confidence today. Once he's used that shot in his armory and he's failed to defeat Theresa May in a vote of confidence, then the pressures on him because a lot in his own party want him to back a second referendum.

His pure Eurosceptic at heart. He's very reluctant to do so. But he virtually has the instruction of his party conference that if you don't get a general election which would result from losing -- the government losing the vote of confidence, if you don't get that general election, we want a second referendum. We want you're backing --

FOSTER: Yes. He has a lot of pressure on him right now as well as we keep referring to. Now, reaction to the voters being twist and at times brutal. The Scottish First Minister took aim of the British Prime Minister and called for a delay that would lead to that second referendum.


NICOLA STURGEON, FIRST MINISTER, SCOTLAND: This is a defeat of literally historic proportions to the Prime Minister and she has seen that content 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 corp to take away any risk of the U.K. crashing over the E.U. perfectly on the 29th of March.


FOSTER: Well, from the E.U., European Council President Donald Tusk tweeted. "If a deal is possible and no one wants No Deal that who will finally had 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 Commons and urges the U.K. to clarify its intentions as soon as possible because time is almost up.

Finally, the German Finance Minister says this is a bitter day for Europe. He says they're well-prepared. The hard Brexit would be the least attractive choice for the E.U. and Great Britain. The latest, CNN Hadas Gold is at 10 Downing Street, Marissa Bell is in Brussels. I want to come to you first, Melissa, because the language coming out of Europe isn't being seen as necessarily helpful but actually they don't have much wiggle room. They can't give a massive concession which is probably what Parliament needs right now.

[01:10:40] MELISSA BELL, CNN PARIS CORRESPONDENT: Yes, that's right. We watched the disarray of that vote of those discussions in the British Parliament. Yesterday we watch very closely from here in Brussels but also from throughout the rest of the European Union. But clearly, the fact that the British have not managed to sort of get their act together on the government deal, and this is the noise that's coming out of many different European quarters is essentially not the E.U.'s fault. They say, nor actually in the end so much its problem because the prospect of that hard Brexit is so much more potentially damaging for the economy of the United Kingdom than it is for the rest of the E.U.

And bear in mind, Max, that throughout these negotiations, the EU has spoken remarkably most unusually with a fairly solid single voice really sticking together and showing a great deal of unity in terms of what it wanted and what it could give in the way of concessions. And a many feel in the European side that they have reached the end of the road in terms of what more can be given. The issue was also addressed by the French President last night Max who said look, I know the British quite well and what I expect them to do is to come back and look for further concessions and maybe who knows, they might see a little bit of movement on one question or two.

But let's be clear, that fundamentally what we are heading for no doubt is under the circumstances and given last night's vote a crashing out of the E.U. in a disorderly way. And that you pointed out is extremely harmful for a British economy where 70 percent for instance because they are sold in its shops its food comes from the E.U. The needed effect over disorderly exit would be catastrophic for the British economy.

FOSTER: Hadas, we need a Plan B now from Downing Street. She says she's going to speak to the other parties which she's not very well known for doing. She was going to do that today. You know, no one's sitting here on Friday are they so she's going to have to go back by Monday, a busy few days for her.

HADAS GOLD, CNN MEDIA AND BUSINESS CORRESPONDENT: It will be a busy few days for her but we're definitely on uncharted territory now. It's not clear exactly what Theresa May's plan will be other than speaking to MPs and trying to get out of them what they want. However, I mean, we knew we were facing this possibility, this possibility of a crushing defeat since December when Theresa May pulled the initial vote. And now you're probably hearing from MPs horsing as they said in December we should have had the vote then because the clock is ticking down. We have just a little over 70 days to go until that possible crashing out date.

Excuse me, Prime Minister Theresa May has a busy day ahead of her here today. She will face Prime Minister's questions in Parliament and then there will be debate of course on that no-confidence vote. That vote will start taking place at 7:00 p.m. As we've been noting, she is likely to survive that vote. But surviving that vote does not change the calculus on Brexit. And the fact that there doesn't seem to be a consensus in Parliament on how to move forward.

Prime Minister Theresa May will talk to Brussels, will try to get something out of it. But we just don't have a clear path forward now. It's just another day in this crazy political climate we have right now in the United Kingdom, Max.

FOSTER: And Melissa, in terms of the practical concerns here. As a hard Brexit as they're calling and no deal Brexit becomes more and more of a reality, it does seem to be the default option at this point, how's Europe preparing for that? This is not just going to be the U.K. that's impacted, it's also the trading partners.

BELL: That's right. And (INAUDIBLE) has made it clear since last night's vote that the E.U. will now be concentrating on getting prepared for that scenario of the U.K. crashing out. The consequences really could be fairly far-reaching and perhaps most worryingly they're extremely uncertain, unpredictable. It's very difficult to know precisely what the impacts will be. Essentially what Theresa May's deal had provided for was a 21 a month period of transition with the possibility perhaps and this is what worried a lot of art Brexiters said that it might even be extended if it proves necessary because it didn't actually seem that long, 21 months to figure out that transition from the U.K. being an inherent part of the European Union and then leaving it.

Now what we're looking at is if we crash, if the United Kingdom crashes out of the E.U. as is looking more likely today than it did yesterday, essentially what that means is on the 29th of March -- from 11:00 p.m. on the 29th of March, Max, all of those -- all of those issues, all of that integration comes to an end with the unforeseen consequences on the cost of food in the shops because tariffs will be placed on anything coming in from the E.U.

The consequences for the city, the consequences for the British Pound, the consequences for the British economy, borders, what becomes of citizens on one side of the border, or the other, all of these questions up in the air and everyone left to discover what those consequences are in real time and with no planning. Max.

[01:15:44] FOSTER: Melissa, Hadas, thank you both very much indeed. Coming up, next steps for Brexit, plus, escaping a terror attack in the heart of Nairobi. Not everyone got out. The latest details live from the scene view, next.


FOSTER: Britain's Prime Minister Theresa May, fighting for her political life after her Brexit deal suffered a crushing defeat in Parliament. So, what happens now?

Well, a no-confidence vote is expected around 7:00 p.m. London Time on Wednesday. If Mrs. May survives that vote, she'll have three days to come up with a new Brexit plan because Parliament will not meet on Friday. The new blueprint is expected to be presented, then on Monday.

At some point, the Prime Minister is expected to meet with European leaders in an attempt to renegotiate the Brexit agreement if Theresa may doesn't survive the no-confidence vote. That would likely lead to a general election and possibly, a new government.

Britain's still scheduled to leave the E.U. on March the 29th with or without a deal. The U.K. could try to extend that deadline, but it would require approval by other E.U. members. CNN European affairs commentators Dominic Thomas joins us from Los Angeles. And the deadlock we've got here seems to be quite reminiscent of what we've got used to in Washington, as well, it's not good.

DOMINIC THOMAS, CNN EUROPEAN AFFAIRS COMMENTATOR: Yes, it's incredible because both television screens, you know, show a kind of countdown to Brexit. And in the United States, they're showing a countdown, so to the number of days since this has been going on.

Look, all of these questions in so many ways are to be inscribed in a bigger kind of global political picture from the Trump election, Brexit, and so on. And I think that there's something very particular about the U.K. context. And the -- and the political crisis that we -- that we face here.

And in some ways, you know the fixed-term Parliament act surpassed in 2011 has been used once by Theresa May and to trigger a snap election by getting a two-thirds majority.

Here we have the opposition leader seeking a vote of no-confidence in the government that then the results in this 14 day period in which a government can trying and regain the command of the houses of parliament. But it's also interesting I think to look to the broader European Union and to look at elections that have taken place in the last couple of years in Belgium, and Italy, in Germany, and so on. Where there's been a proliferation of kind of micro parties and where mainstream political parties have lost support.

And this has led to extended coalition talks. Historical coalition talks. And yet, in the British context, you have a party that's in power and you have an opposition. And what we're seeing today, is in fact, within the Conservative Party, there are really at least two political parties, the Brexiteers, and the more centrist branch.

And in the Labour Party, you have the Jeremy Corbyn supporters. And then, you have those that are far more invested in a European model, a European Union model. And yet, we seem to have nowhere for any of these particular constituents to go in order to shift the balance of political power. And it's a real crisis that you have here in which there seems to be no solution. And every single day a new historic moment. A new historic vote takes place as people wait for the final outcome of this, and Brexit saga.

[01:21:32] FOSTER: And the lasting shift at a really seismic shift could be if Parliament does take control effectively of Brexit take it away from the government because that would set a precedent for a future political crisis. When hopefully, one day these days of inertia are dead and gone.

THOMAS: Yes, and I think that you know what happened last week when they were -- you know returning from the December break when there were a couple of notions that made it through Parliament. The Parliament made a very strong statement to Theresa May that you essentially serve, you know, at the will, and that the confidence, you know of the Houses of Parliament.

And that the way in which, you know, this you've sort of behaved with this particular deal and so on. And then, the vote today was it -- was an extraordinary, you know, expression of dissatisfaction in the ways in which this process has been handled. A lack of cross-party sort of consultation.

And it's absolutely extraordinary that the Prime Minister went away for a few weeks over the break, and returned essentially with the same deal that everyone told her was going to be defeated. And in what's even more extraordinary is that in -- at this moment of this historic defeat, the Prime Minister will return to Parliament tomorrow and has a very strong chance of surviving. And this vote of no-confidence is absolutely extraordinary and it's really sort of uncharted territory.

And one has to ask whether that is actually, you know, the best outcome. Whether this really realistically breaks the log jam by returning a prime minister as the designated driver as I keep saying, you know, on this sort of road trip in which nobody wants to really sit in the front seat. And everyone has an idea as to the direction in which we should be going with this.

And so, by continuing on and keeping her in power, it does not solve the problem. There's nothing to be done in Europe, and there's nothing that's going to bring the Brexiteers to the table along with remainders, for example.

And so, the deadlock just continues in the talk is the clock is clicking, and in some ways, that's also a strategy to let the clock run out and that Brexit eventually happens.

FOSTER: Yes, OK. Well, thank you, (INAUDIBLE). John Vause, the thinking there is perhaps, you know, Brussels does shift position quite often, does push things right up to the line when it's making these sorts of deals. Certainly some M.P.s here counting on that. But we keep hearing from Melissa how they're not going to go that way this time.

VAUSE: And it just seems the gulf between what the Europeans can offer and that huge crushing defeat cannot be bridged certainly at this point from everything that we've heard already from the Europeans. But, of course, as you say, you know, early day's negotiations continue and we'll see what happens. Max, thank you, will be at back with you on a moment.

In the meantime, we'll head to Kenya where Special Forces are still on the scene of a terror attack in an upscale hotel on office complex, which has left, at least, 11 people dead.

CNN's Sam Kiley is there. He's reporting the sound of heavy gunfire and small arms fire a short time ago. This highly coordinated attack began early Tuesday afternoon with two explosions. One in the parking lot of the hotel, the other are suicide bombing in the hotel's foyer.

The blasts were followed by heavy rounds of gunfire. Hours later, the assault developed into a standoff as government forces tried to clear the complex and evacuate civilians caught in the crossfire.

Security forces who helped with the evacuation have described scenes of carnage. The Islamist terrorist group al-Shabaab has claimed responsibility. Bringing us once again live from Nairobi in Kenya, CNN's Sam Kiley. So, Sam, what is the latest now on -- you know, this operation at that complex to try and secure, and neutralize the threat.

Also, is there any immediate word on what the government plans to do in the wider sense now that al-Shabaab has claimed responsibility? Any kind of military response in the works?

[01:25:17] SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, John, just in the last few minutes, there's been, yes, another series of very heavy bursts of gunfire and we're seeing a number of ambulances, at least, seven. And there are several others queuing at the entrance where I'm standing.

Going in just in the last hour, as well, at least two female civilians were evacuated. This flies in the face of government claims overnight that the area had been cleared and secured. Indeed, a very heavy fighting has been going on, they've been reinforcements from the general service unit of the Kenyan military or rather the police. And also, their wrecker unit have seen reinforcements.

We also know that there are some Western Special Forces on the ground, and a great deal of effort now being made to clear the ground to make way for ambulances. So, clearly, there's been some kind of issue of casualty indeed.

If we just turn the camera over in that direction, we can see journalists gathering around. One ambulance where appears that there is a wounded victim, of being carried to a vehicle. This is clearly an ongoing battle for control of the Dusit Hotel, John.

As I say, very nowhere near at an end. I've been talking to local security sources who've been involved in these events in the past, notably the West gate attack. And their anticipation is that when the terrorist group and they're numbered some four or five, they may well detonate a large explosion in one -- in the words of one security source here, do some kind of grand finale.

But at the moment, there is no word whatsoever from the Kenyan authorities as to what they might do next with regard to al-Shabaab. And indeed, the Shabaab have been somewhat resurgent recently inside Somalia. Or over the Christmas and New Year period, they were able to drop six mortars very accurately inside the United Nations compound, prompting almost total evacuation except for non-essential staff.

From that location, excuse me, and they have been able to conduct these sorts of operations so terrorist attacks are not just here in the capital but also in the borderlands of Kenya. This comes at a time when Kenyan forces and other African peacekeeping forces in Somalia are drawing down their operations. Now, this attack may mean that, that program goes on hold. John?

VAUSE: Sam, thank you. Sam Kiley, once again for us live on the scene of what appears to be an ongoing operation there in Nairobi. And attacked by the terrorist group al-Shabaab and the response there by the Kenyan military and police. Sam, thank you.

We'll head back to London after a short break. In the wake of a huge parliamentary defeat, what is next for Britain, the Prime Minister, and Brexit itself? And we'll hear from two anti-Brexit campaigners about where they see the U.K. is heading now.


[01:30:38] VAUSE: Half past the hour. Welcome back to our special edition of CNN NEWSROOM. Thanks for staying with us. I'm John Vause with the headlines this hour.

In Nairobi, Kenya the Special Forces are still on the scene of a deadly terror of a hotel and office complex where at least 11 people have been killed. CNN reports police and military reinforcements have arrived and there's sound of ongoing gunfire. At least seven ambulances have also arrived on scene and two women are the latest civilians evacuated to safety.

The Islamist militant group El Shabaab has claimed responsibility for the terror attack.

Venezuela's opposition-controlled national assembly has declared Nicolas Maduro's presidency illegitimate and now wants to take control. The White House has indicated support for such a move. Maduro began his second term as Venezuela's president last week.

A former aide to Joaquin El Chapo Guzman says the drug kingpin once paid a $100 million bribe to Mexico's former president Enrique Pena- Nieto. The testimony came out Tuesday at Guzman's trial in New York. Earlier during the hearing a spokesman for the president called the accusations they were bribed false.

Let's head back now Max Foster there in London where it is, what, 6:30 in the morning. And of course, in the wake of that crushing defeat in parliament. A lot of questions and not a lot of answers right now about what exactly happens next -- Max.


Britain's exit from the European Union now the big unknown and so too is the future of the British Prime Minister. Parliament handed Theresa May a humiliating and crushing defeat, the biggest in modern history.

She now faces a no confidence vote in the hours ahead. Almost no one expected her Brexit deal to pass but few predicted this margin of defeat.


UNIDENTIFIED MALE: The ayes to the right, 202; the nos to the left 432. So the nos have it.

THERESA MAY, BRITISH PRIME MINISTER: Mr. Speaker, the House passed vote and now 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 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, LABOUR PARTY LEADER: The results of tonight's vote is the greatest defeat for a 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.


FOSTER: I'm joined now by two anti-Brexit campaigners from Our Future Our Choice -- Will Dry, the group's co-founder and Femi Oluwole, the group's chief spokesperson. They're tough. They don't wear coats. It's dawn here. It's freezing cold.


FOSTER: Exactly.

But the glow of energy down here, you're out at the rallies yesterday. What is your response initially to that vote?

WILL DRY, CO-FOUNDER, OUR FUTURE OUR CHOICE: Well, I think the reality is NOW we're going to go for a series of votes in the House of Commons. But I think it's going to end up with the people.

So today there's going to be a vote of no confidence in Theresa May. The Labour Party needs to go figure that so that they can explore other options. The primary one being a public vote. I think that's where they'll end up.

And I think what we're going to see is that parliament couldn't find a majority to Theresa May's deal. In fact Theresa May still got hammered. Is it going to be out to find a majority for any other Brexit deal? I don't think so.


DRY: I don't see how kind of one collective mind at all so I don't see how it's going to be able to negotiate one in less than a month when Theresa May had two years.

So we're going to end up with gridlock and if parliament can't make a decision, then the people are going to have to. And that's why we demand a people's vote.

FOSTER: What are you going to say to those though that voted for Brexit a couple of years ago and who haven't changed their minds and feel that you're just going back to them trying to convince them that you're right.

And actually they've made that decision and more referenda aren't the solution.

OLUWOLE: One -- Will here, voted "leave". So he's looking at this Brexit and saying this is not at all what he voted for at all. And we've been touring the country speaking to people who voted for Brexit, asking them what they wanted. More control, better NHS and better (INAUDIBLE). Now this deal means we have less control. The British Medical

Association -- the entire medical community at large in the U.K. says this is bad for the NHS, our National Health Service.

[01:34:59] And as for being better off, nobody's even pretending that this is going to be good for us economically. So the people aren't getting what they wanted. In fact, they're getting the exact opposite of what they wanted. Calling this the will of the people is simply wrong.

In 2016 we voted to reject our current relationship with the rest of the E.U. If negotiations need one (ph) people need to decide which one they prefer.

FOSTER: The polls saying that people have changed their mind a bit like you. But not that many. Not enough to change the votes.

DRY: Well, I think there's kind of three groups of people who are (INAUDIBLE) as grand majority in our country for staying in the European Union. You've got people like me who changed their mind. I think there's around one or two million people of voter -- 15 percent of leave voters. So not, you know, not a minority or like not a sizeable minority. And then young people -- so 1.6 million young people have joined the electorate in 2016 and I think those who are certain are 87 percent -- 87 percent want to remain.

I mean I haven't seen a generation united around any other political issue like Brexit. I mean it's remarkable.

And then thirdly a lot of European citizens have been forced to get British passports because they thought they could live here the rest of their lives. It turns out they couldn't because of the Brexit vote. So they became British citizens since they've lived here long enough. And they will not get votes.

And it's not hard to guess how they're going to vote in a referendum. So I think about three groups of people who are pushing the country towards staying in the European Union.

FOSTER: She could call an election, couldn't she? She could lose today's vote and there will be an election. Wouldn't that act as a referendum and a more legitimate one? Because then you could still keep the original referendum.

OLUWOLE: Well, if you have a general election, it doesn't answer the question of what do we want to do with Brexit? Firstly, there will be those that would say well this election wasn't really about Brexit. It was about ending austerity. It was about the housing crisis. And you wouldn't have a concrete change of the will of the people.

Secondly, the last time we had a general election after this Brexit mess started, both parties stood on manifestos and said they were going to pursue Brexit. So you can't necessarily guarantee that the actual will of the people will be reflected in the election.

FOSTER: If she stands, you'll be voting for her Brexit deal and then she gets to come back to parliament and say the public support my Brexit deal. So you have to go with it this time.

DRY: Well, I don't think it is the cleanest way to solve this mess. You know, we thought we had a general election 2017. We thought it was all going to be about Brexit. We barely focused about Brexit.

And also how on earth is the Tory Party going to unite around the manifesto of Theresa May's deal when a majority of voted yesterday.

FOSTER: She's a survivor. We know that. We've learned that.


DRY: -- have to get it in a manifesto. And Labour, frankly have shown no leadership. They don't really have a clue on what Brexit they want. So I don't see what's going to be in their manifesto.

The public won't have a clue which Brexit they're voting for all over the place. So I think the cleanest way to do it is a referendum of how we did it in 2015 and how we did it in 1975 when we wanted to establish our relationship with Europe. And that's what I think has to happen now.

FOSTER: How worried are you about a no deal because that's the default? That's where we're heading towards right now. Nothing changes.

OLUWOLE: Well, Parliament knows that it would be electoral self-harm to just allow that to happen. Any party, any MP that does not do absolutely everything in their power to prevent no deal, they're elector is screwed -- electorally screwed because it will be so damaging for the country.

You've got every economic expertise (INAUDIBLE) for the country. The British Medical Associate says it will be catastrophic for National Health Service. And quite simply Parliament, at least sovereign Parliament has the power to stop it

And quite simply it will be undemocratic. In 2016 every single Brexit campaigner said that we would have a better deal with the E.U. Nigel Farage said it, Boris Johnson said it -- all of the progressive newspapers said it. So the idea that a no-deal Brexit was the will of the 17 million people who voted. I'm certain that's not what they were being told. That we'll have a better deal -- no. I don't buy it.

FOSTER: Ok. Femi, Will -- thank you very much indeed. You'll be out as well, today will you?

DRY: Absolutely all day.

FOSTER: Campaigning.

OLUWOLE: Having fun.

FOSTER: We're going to be here for a while. The British pound rallied after parliament's vote, remarkably. The pound had fallen below $1.27 but erased losses and finished at $1.28. Some analysts predicted the pound would rally if the Prime Minister's plan was defeated because it raised the chance of Brexit being delayed.

This is how the Asian markets are currently looking as they finish off their day. As you can see, they're up as well.

For more on the financial impact and the uncertainty John Defterios joins us now from Abu Dhabi. And they don't seem too bothered -- John.

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: No, indeed -- Max. I would say clearly no panic whatsoever despite the crushing defeat that you've been talking about here for Theresa May. The worst in fact, in terms of a parliamentary vote in modern history.

This creates many more options as your guests were suggesting here in their campaigns in going forward. Freaky options, Max -- that remain on the table here. We have to consider still that the hard Brexit is one of those options that happens on March 29th.

But there's a prevailing view at least in the financial markets at this stage that number two is that we stretch this out and there's further negotiations.

And number three that perhaps there's no Brexit at all because there could be a referendum that goes in favor of that very outcome.

That is the view of Goldman Sachs in the last 30 minutes here suggesting it could be a softer Brexit. Or if we have a referendum, no Brexit at all.

[01:39:55] But this does not remove the business uncertainty which is driving British leaders absolutely crazy. The British head of the Chamber of Commerce was suggesting it's like riding a rollercoaster -- a political rollercoaster that comes to no end. They've been negotiating for two years and still we have this uncertainty.

As was brought up with your guests there outside of parliament there are concerns about medicine deliveries. For business leaders, it's the supply chain, getting products from continental Europe and there's even the scope now can I take business travel freely going into Europe to conduct business on a daily or weekly basis.

These are real questions, Max, that remain. But in the equity markets and the currency market right now, it is pretty calm because there's more options on the table than there were 24 hours ago.

FOSTER: What sort of options can France and Germany, for example, offer Theresa May before she comes back here on Monday and offered her Plan B?

DEFTERIOS: Yes, you know, Max -- I think the key word here is more flexibility. We have not heard it from Jean-Claude Juncker or Donald Tusk who run the outfit there in Brussels, the European Commission and the European Union, of course.

But I was watching some of the comments ahead of the vote, kind of an olive branch if you will. Olaf Scholz is the finance minister of Germany, the largest economy, of course, in the European Union suggesting we don't have to just watch out for Brexit, we should be very concerned about populism overall, suggesting that the Yellow Vest movement in France is a threat.

We have the issue in Italy with the Five Star Movement, the extreme hardliners on the right in Greece. This creates a problem. So if you had a hard Brexit, it could be contagious. We can't overlook the fact, Max, that the U.K. has 70 million citizens. It's a $2.5 trillion economy, a member of the G-7.

If it did break the dam and leave the European Union, what would it mean for that contagion going forward? I think that's why Goldman Sachs is suggesting there may be a pause in Europe, soften the language, give some flexibility and give some breathing room, not only to Theresa May but the whole political process to perhaps reset in U.K.

And that's why we see the calm in the markets right now.

FOSTER: Ok. John in Abu Dhabi -- thank you very much indeed.

Up next money problems in the U.S. The government is bringing back some workers to handle tax returns. But they aren't getting paid. And that's just more fallout from the shutdown standoff. Details coming up.


[01:44:56] VAUSE: The Trump administration is calling back tens of thousands of federal workers to key positions -- another indication the longest government shutdown in American history is not about to end anytime soon.

The tax filing season due to begin at the end of the month. The Internal Revenue Service is recalling 36,000 employees to ensure Americans receive their refunds on time. You know, the workers will not actually be called. Just like the thousands of workers who've been called to oversee flight safety and also to inspect the nation's food and drug supplies.

This appears to be an attempt to stop any impact of the partial shutdown as both the President and congressional Democrats dig in even though Democrats and Republicans are said to be working privately to find a solution.

For more now on the shutdown, the standoff and the fall out, we're joined by Michael Shear, a CNN political analyst and "New York Times" correspondent. Ok.

So Michael -- you know, despite what the President may say publicly, and how many times do we use that line, this call back of thousands of employees without pay it does seem to be a sign that the administration knows it is losing this fight with Democrats. You know, calling back IRS workers and others, it's just an attempt effort to buy some time it seems.

MICHAEL SHEAR, CNN POLITICAL ANALYST: Right. Well, it's got two problems with it. One as you point out, it is an indication that they don't think that there's any chance that this will resolve itself or end any time soon, right. If you thought that this was going to be over in a day or two, you wouldn't have to do this.

But it also has another problem for President Trump which is it exacerbates a really deep anger among federal workers right now who are being asked to work without pay. And by bringing more of these workers on to do more of the emergency tasks that they're trying to soften the blow, as you put it, those are tens of thousands more federal employees who are being asked to do all of this work and yet their pay checks are still going to be zero when they come.

And so I think, you know, while on the one hand, he may think that he's softening the blow for the time being I think he's adding to the problems that he's going to have, as more and more federal workers are going to get so get frustrated that they simply say we're not coming in to work if we're not going to get paid.

VAUSE: Yes. Donald Trump is a day trader. He continues to be the day trader. And again, despite what the President may say, the unity appears to be on the Democratic side behind Speaker Pelosi. Not one Democrat accepted that invitation to meet with the President over lunch on Tuesday. This was an attempt to sow division among the Democrats and it did not work.

SHEAR: Right. You know look, I think one of the things that has characterized this if you could even call it a negotiation -- there really hasn't been much negotiation between the two sides.

But it's been a -- the White House -- this White House the President on down have just completely misunderstood and misappreciated the position of the Democrats. There are times in the past -- when we've had shutdowns and we've had big clashes between the two parties when, you know, when the Democrats were not as unified and when they were likely to break perhaps under a lot of pressure.

This does not seem like one of those times. The Democrats are convinced they have the upper hand, in part because of the things that the President said publicly about owning the shutdown. And in part I think because they recognize that, you know, in most of these situations the President -- the person who is the head of the government and in this case is the one who has been insisting on his wall, he's the one that gets blamed.

And I don't think there's any evidence that we've seen that the Democrats are in any way going to break any time soon.

VAUSE: It was a pretty quiet day Tuesday on Twitter for the President. Nonetheless, he did tweet this in the morning. "Why is Nancy Pelosi getting paid and people who are working are not?" The question should be, why is any elected official in Congress getting paid?

But that's about as nasty as the President seems to get when it comes to Nancy Pelosi. He does not have anything for here given his history of put-downs and insults of misogyny. It seems a little strange. It kind of begs the question, is he afraid of Pelosi? Has the President met his match?

SHEAR: Well, I think the minute that he watches this show and watches your question, you'll wake up tomorrow morning and there will be a name for Nancy Pelosi now for sure. You've jinxed it.

You know, I don't know that he's afraid of her. I think, you know, one thing you can say about Donald Trump is he has a sort of gut instinct for some of these things. He had certainly throughout the 2016 campaign a real sort of gut level sense of when he assigned nicknames to his rivals, what they would do to you and how they would play especially with his base among his supporters.

And I think he sort of must have some kind of gut instinct that going after Nancy in some of the same ways that he has gone after other rivals may not work as well. But we'll see. That could change any minute.

VAUSE: That's very true.

Just wrote this out. The President's nominee for attorney general Bill Barr made it clear during a senate hearing that, you know, he backs Trump when it comes to the wall and the partial government shutdown. On the other hand he also says, you know, he wants Robert Mueller to continue on and finish the Russia investigation without interference.

[01:50:04] So taking these two issues, you know, it seems Trump is digging in on the wall because he knows at the very least he needs to have to fight for the wall because it is crucial to keep his base with him. He's also looking towards that day in the not-too-distant future when Mueller hands in his findings and when that day comes, he shall need his base more than ever before.

Is that too simplistic or can you draw a direct line?

SHEAR: I think that's right. I mean I think you shouldn't underestimate the extent to which Donald Trump is obsessed with the wall and obsessed with immigration for its own -- on its own. And I think some of what we're seeing now is the, you know, playing out of that obsession and he sort of got himself into a corner that maybe another more experienced politician wouldn't have done.

But I do think you're not wrong that he also understands that -- and has all along for the last few years that tending to his base, making sure that his core supporters are rock solid is going to be important and it is never going to be more important than two, three, four, five months from now or whenever Mueller reports because those are going to be turbulent times for this White House.

And, you know, having the support of people who are not going to flee when some of the allegations and accusations start being made public. I think that's going to be important for him politically and he knows that.

VAUSE: Yes. Michael -- thank you. Good to have you with us. We appreciate it.

SHEAR: Yes. Happy to do it. Any time.

VAUSE: We'll head back to London for one last check after the break for more on this self-inflicted political crisis and the fast approaching Brexit deadline.

You're watching CNN NEWSROOM.


FOSTER: Welcome back to Westminster a day after the biggest defeat in modern British politics.

Newspapers and tabloids across the U.K. play up the significance of Theresa May's Brexit fiasco. "The Guardian" calls it an historic defeat of members of the Prime Minister's own party turned against her. But some taking a more creative approach as they're known for, like calling Theresa May the dodo bird and calling her deal "Brextinct".

Joining me now, CNN political contributor Robin Oakley.

She doesn't necessarily think it's entirely extinct though particularly when she goes back to Europe she has to build on this.

ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: It is very difficult to see what she can get out of Europe at the moment because it is so unclear what the House of Commons is prepared to support. Her own deal has been absolutely crushed.

She's got to produce something fresh. She's got three days to do that under the timetable set for her by MPs in the British parliament. Very difficult to see what she can do in that time.

She's promised cross party talks but at the same time she seems to be trying to stick to her own red lines and not being prepared for example to keep Britain in the customs union as the Labour Party would like to see.

So everything is now -- all the pressure is on Westminster to come up with something new. The European Union leaders are absolutely exasperated. So are business leaders in Britain who now fear that we're heading for a crash out on March 29 with no deal.

FOSTER: They can't agree so the option seems to be another referendum, another election. Theresa May could even call that, couldn't she? Even if she doesn't lose the vote of confidence. And there's some talk of that.

[01:54:52] OAKLEY: Yes. I mean Theresa May's own position -- ok, we're all saying she's going to survive the no confidence motion from Labour because the DUP northern Ireland MPs who voted against her deal will come back and support her. So will her own Brexiter critics.

She'll survive that, but the problem for Theresa May now is with Europe asking, ok what do you really want? If she goes to her own cabinet and says ok, I want to take some steps towards Labour. I want to be more cross party about all this --


FOSTER: They'll object.

OAKLEY: -- they will object. But if she suffers serious walk outs from her cabinet at this stage, day by day, drip, drip, drip, drip. Her authority, which is pretty well minimal as it is, is just going to completely evaporate.

Remember what happened with Margaret Thatcher. She -- you know, she held off the first vote against her as it were when she was in trouble. But then her cabinet ganged up on her and said sorry you'll have to go. You're too much of a risk.

At some point that could happen yet to Theresa May. So what a general election in this would solve at the moment is hard to see.

FOSTER: Yes. We could be here for a while. In terms of delay, that's the talk coming out of Brussels right now. They think that's the most pragmatic sort of solution here. They're not considering the emotion in parliament or within the country and it doesn't actually seem likely from this end, does it?

OAKLEY: Well, a delay in Article 50 is only going to be granted by the European Union if they see something definite being offered by the British parliament or British government. They're not going to say --

FOSTER: Like a referendum.

OAKLEY: -- you know. We're just going to give you a bit more time to make up your mind. If it is -- if Britain starts to go for a referendum, I'm sure the E.U. would come around and say, ok, you know, we'll give you time on that. We'll agree to you rescinding Article 50 for that.

But otherwise it's going to be something much more definite what is on offer from Westminster at the moment. And the other big question is, all this talk about backbench MPs seizing control of the agenda in parliament, pushing for their own steam which May would either have to accept and put through parliament or she would go.

Well, the European Union is only going to deal with a government and government ministers. You can't see the E.U. starting to do a deal with a cohort of backbench MPs in the British parliament. That isn't going to happen.

FOSTER: Ok. Well, tonight we will be receiving -- Robert, thank you very much indeed -- we will be receiving the results of the vote in Theresa May's government. If she loses, she will have to resign. It seems unlikely though, Robin says.

The big question is what she does from there, she goes to Europe, she tries to come up with a Plan B. Then she'll have to bring it back for another vote on Monday.

So we can look forward to that.

You're watching CNN NEWSROOM. I'm Max Foster.

Rosemary Church joins me right after this. You're watching CNN.