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Quest Means Business
Conservatives Win Majority in UK Election; Euphoria, Fears After Conservative Win; UK Relationship With EU Will Change; David Cameron's Economic Rivals Defeated; European Markets Rally; UK Marks 70th Anniversary of VE Day; US Stocks Gain on Jobs Report; US Added 223,000 Jobs in April
Aired May 08, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Full steam ahead. The Dow wraps up the week with triple-digit gains. The market comes to a close, time to hit the
gavel and bring trading to an end. The hour is being struck by Big Ben. It is Friday, it's the 8th of May.
The triumphant win for the Conservatives. Now, that's a small matter of Europe has to be dealt with.
Spared the twists and turns of uncertainty, stocks are soaring on the result.
And the US jobs report was good. Not great, and that's excellent news for the Dow.
As Big Ben chimes the hour of 9:00, I'm Richard Quest in London, where of course, I mean business.
And a very good evening to you from the British capital. Tonight, Prime Minister David Cameron has vowed to continue his work strengthening
Britain's economic recovery. Conservatives won an outright majority in the general election. They got 331 parliamentary seats out of a total of 650.
The party will govern alone after five years in coalition.
The prime minister still faces the daunting challenge of fulfilling his campaign promises, and he's got to do so with just that ever-so-slender
majority. And it is really all about the majority.
The prime minister immediately reappointed George Osborne as the UK finance minister or the chancellor of the exchequer. The leaders of the
three rival parties have all stood down. They resigned. Mr. Cameron says he will lead Britain into a better future.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER OF BRITAIN: When I stood here five years ago, our country was in the grip of an economic crisis. Five years
on, Britain is so much stronger. But the real opportunities lie ahead.
(END VIDEO CLIP)
QUEST: So, the real opportunities lie ahead. Something great, I think is the phrase he used, is about -- or something special is about to
happen, he said. Errol Barnett is live at Number 10 Downing Street and joins us.
Errol, the day as it unfolded was quite dramatic, but now, of course, the PM has to choose his cabinet or at least amend his cabinet. What are
we expecting?
ERROL BARNETT, CNN INTERNATIONAL CORRESPONDENT: That's right, Richard. And we can be frank about this. This was an awesome day for the
Conservatives. Prime Minister David Cameron really wasting no time in setting his agenda forward.
There are no amendments to his cabinet to speak of so far. A number of hours ago, we saw one by one as George Osborne, Theresa May, Philip
Hammond, and Michael Fallon all entered end exited Number 10 Downing Street before it was confirmed that they would be hanging onto their posts.
The UK prime minister also stepping outside Number 10 Downing Street after holding an audience with the queen and heading to Conservative Party
headquarters and setting forth what he says is now an electoral mandate that the British people have given him.
We've talked about that EU referendum, that will be something that will be on the agenda by 2017. German chancellor Angela Merkel, in fact,
has already sent her congratulations to the UK prime minister, as has US president Barack Obama.
But the Italian and French leaders, when they congratulated Prime Minister Cameron said the EU referendum is something they certainly want to
discuss.
The other aspect of this mandate, Richard, is the economy. David Cameron saying that he was able to steady the economy over the past five
years, and now wants to improve on that. So, essentially, he summed it up by saying the past five years, the Conservatives have built a foundation.
Now, he says, the British people want him to build on that. Richard?
QUEST: Errol Barnett in Downing Street.
It might be called a relief rally. Stocks rose -- I do beg your pardon -- after -- in London after the Conservative's decisive win. It was
a relief. It was tempered by points of concern. So, look over at the numbers, and as we look at the numbers, the fight over austerity is
certainly one that's gotten to be crucially important. Mr. Cameron wants a balanced budget without new taxes.
In Scotland, the SNP landslide could put independence back on the table. The SNP also deeply opposed to austerity. And the biggest issue,
of course, is the referendum on Britain's future into the EU.
[16:04:52] It says it's looking inevitable, but it's very -- it would be extremely difficult if not electorally impossible for the prime minister
to back out of that. The chief executive of WPP, Sir Martin Sorrell, says everything hinges on that question.
(BEGIN VIDEO CLIP)
MARTIN SORRELL, CEO, WPP: All attention now turns to the result and to that referendum itself and the result, one way or another. So, the
uncertainty around that also will become important over the coming months.
(END VIDEO CLIP)
QUEST: Robin Oakley is with us, our political analyst. By jingo, as my grandfather used to say, you don't get many nights like last night.
ROBIN OAKLEY, CNN POLITICAL ANALYST: No, you certainly don't. Three party leaders resigning within an hour. What a brutal contact sport
politics is, isn't it?
QUEST: And the prime minister getting his majority. Look, I've got to ask you, before we get into referendum stuff, the key question, Robin:
was this a vote for the Tories, or was this a vote against everybody else?
OAKLEY: It was a vote to hold onto the hand of nurse for fear in finding something worse, essentially. The Conservatives kept ahead of
Labour in those opinion poll second layer questions about who do you believe is safest to have the economy in their hands.
And when people got into the polling booths at the end of the day, they thought no, if we're going to go with this deficit reduction business,
and Labour saying they're going to do it, too, but less brutally, let's get it all over with, let's leave it in the hands of the Conservatives. They
seem to be doing OK so far.
What everybody's forgetting is that it was helped in a coalition government by the Liberal Democrats, who've been absolutely minced to bit
as a result.
QUEST: Now, on the referendum, because he's promised this referendum. And I think -- well, you tell me if I'm right -- he's not going to be able
to get out of it.
OAKLEY: He can't possibly get out of that, no. And the problem is, it's not just the referendum itself. It's two years of negotiation running
up to that referendum. Everybody's talking about the Conservatives having this overall majority. OK, yes, there's a reasonable overall majority.
But in the -- through the course of a five-year parliament, people fall sick, they die, they get involved in scandals. They have to resign.
People get sour because they haven't been given jobs they'd expect. All sorts of people get damn difficult.
QUEST: Right. Now, you remember, because of your background and experience, governments with very large majorities. Thatcher's government.
OAKLEY: Yes.
QUEST: Major had -- a majority.
OAKLEY: Tony Blair, too.
QUEST: Tony Blair. Major's majority was tiny in comparison to Blair. They got into problems because of that.
OAKLEY: Yes. John Major, remember he had the microphone on one day and referred to the people who were giving him trouble as the bastards.
And no -- David Cameron's got his bastards, too, but he's had a cushion between him and the bastards for five years while there's been a coalition
government. A large lump of Liberal Democrats supporting him.
So, nobody noticed the fact that there have been lots of little rebellions among Conservative MPs. Now, those Conservative MPs' rebellions
are going to be noticed. And they're going to hold id feet to the fire over the terms that he puts to Europe in negotiation, before we have that
referendum.
QUEST: Now, I asked you during the course of our week together how many years you've been covering all of this.
OAKLEY: Do we have to go into that, Richard?
QUEST: No, we don't. But I -- but during the week, you said that as we get to electoral night, that you'd never seen anything quite like it.
On the other side of the election, how do you feel now?
OAKLEY: Yes. I mean, it -- for entirely different reasons. But it was fascinating because of the possibilities we thought we were going to be
into days if not weeks of negotiation between all sorts of associations of different parties. We thought it was going to be another hung parliament,
that's what all the opinion polls --
QUEST: Right.
OAKLEY: -- had convinced us it was going to be. It isn't a hung parliament, but it's going to be a damned interesting parliament.
QUEST: Ooh hoo hoo. Robin, good to see you, sir.
OAKLEY: Thank you.
QUEST: Robin Oakley.
The French president Francois Hollande has invited David Cameron to Paris to discuss the UK's future in Europe. Mr. Cameron intends to hold a
referendum on Britain's membership in the EU, you've just been hearing us talk about that.
The PM aims to renegotiate three key different issues with the European Union. They are secure power for the UK parliament to block EU
legislation, stop further integration with eurozone economies and keep Britain out of eurozone bailouts, and cut red tape from Brussels, protect
UK businesses and financial services from EU regulation.
EU's -- the Commission president, Jean-Claude Juncker, says he's looking forward to meeting David Cameron and working constructively on a
fair deal for Britain.
Remember, David Cameron was the only leader who opposed -- or led the leadership, I should put it -- against Jean-Claude Juncker. If there was
one leader who was probably hoping not to have to deal with Cameron anymore, it was Jean-Claude Juncker.
Well, now, Cameron's back with a mandate. Jose Manuel Barroso is the former European Commission president, joins me from Lisbon.
[16:09:57] Mr. Barroso, you are no longer the president, you can be undiplomatic in your answers. Tell me, is this going to be an almighty
fight?
JOSE MANUEL BARROSO, FORMER PRESIDENT OF THE EUROPEAN COMMISSION: I hope not. I think we can avoid the Brexit. I think, now, Prime Minister
Cameron has renewed fresh legitimacy, and I hope he will use his authority to have fair negotiations with the other members of the European Union.
And also to make the case for Europe in Britain.
I think this parliament is strongly pro-European. The majority is pro-European in this parliament. And so, I think that there is on the part
of the other members of the European Union the willingness to accommodate some of the concerns of the demands of the European -- of Britain,
provided, of course, they are realistic, they do not put in danger the fundamental line of the European Union.
QUEST: That's, of course, between what's reasonable and putting at risk is the Devil and the deep blue sea. Do you think that the other
countries would agree to treaty changes?
BARROSO: That's one of important issues. I personally believe that it is possible to accommodate many of the concerns of Britain without
treaty changes, under other kinds of legislation. Having said that, I don't exclude that we have some surgical changes in the treaties.
There are also some positive points about that, because one of the possibilities that I contemplate is to have some kind of exceptions for the
UK as, by the way, the UK already has. The UK has a permanent opt-out of the euro. UK is not entangled.
There are also some exceptions for the UK in terms of the justice and home affairs chapter. But at the same time, to allow for further
integration of the eurozone.
By the way, the British government and Prime Minister Cameron, that I know very well, they have been supporting further integration of the
eurozone. While Britain is not going to join the eurozone, but they perfectly understand --
QUEST: Right.
BARROSO: -- that the countries that share a common currency need some strong mechanisms of integration. So, a possible deal will be to allow for
flexibility in the European Union, at the same time accepting that the eurozone countries can go further in political and institutional and
economic integration.
QUEST: But there is also the very real risk, Mr. Barroso, that the other countries simply say no, here is the line in the sand, Mr. Cameron.
If you wish to have your referendum, it will be up to the British people, but we are not going to accommodate you all the way. You've got to accept,
Mr. Barroso, that is a possibility.
BARROSO: My opinion -- and I've been in the European Council the last ten years, and I know all the leaders well -- my opinion is that this is
not going to happen.
My opinion is that the overwhelming majority, if not all the other leaders of the European Union countries, they will be willing to
accommodate the concerns and demands of the United Kingdom, provided these are realistic. That they are not a rollback of European integration.
QUEST: Right.
BARROSO: For instance, some areas of freedom of movement, this is a red line for many countries. But if it is to limit the possibilities of
someone abusing the social benefits in one country, that can meet consensus from other member states.
So, a lot depends on the proposals, and now we are waiting for the British government to put the proposal on the table. Not only proposals,
but the tone of the proposals. If it is seen as something against Europe, of course the other countries will not accept.
But if it is something to have a fair deal to accommodate concerns of Britain, I believe this is possible. And by the way, I hope it will
happen, because I believe that Europe is much stronger with the United Kingdom, the United Kingdom being one of the most important and
international-minded countries in the world.
QUEST: Mr. Barroso, it's very good to have you joining us tonight. Exactly the views we need -- we wanted to hear from the man we wanted to
hear them from on the night that Britain reelected David Cameron. Thank you, sir, for joining us.
Now, as we continue -- what a magnificent view that is. I mean, it just doesn't get any better than that, does it? Big Ben, the Houses of
Parliament on an overcast Friday night in London. Quarter past 9:00 in the UK. It's all smiles from the chancellor. Not only has George Osborne kept
his job, he's got a promotion as well. QUEST MEANS BUSINESS.
[16:15:09] (COMMERCIAL BREAK)
QUEST: Thursday night didn't just bring a solid victory for David Cameron and his Tory Party, it also delivered a crushing defeat for the
most senior economic leader from his rival parties, three of the most senior lawmakers with business portfolios went.
The most famous, Ed Balls, the shadow chancellor of the exchequer, very narrowly defeated, just over 400 votes saw him out of parliament and
out of office. Danny Alexander, the number two at the Treasury, the chief secretary to the Treasury, he fell victim to that surge of nationalism of
the SNP and Scotland.
And Vince Cable, the UK business secretary, Dr. Cable had held his seat since 1997. And within the coalition was pretty much unassailable
because of his seniority within the Lib Dems.
George Osborne himself has not only already been told he's the chancellor. He's been appointed the First Secretary of State. That's a
sort of quasi you're first among equals, primus inter pares, except that's the prime minister. So, while you're not primus inter pares, you're First
Secretary of State. It means you're number two, but not quite number one. You get the idea.
Stock markets in the UK leapt on the news. The London FTSE jumped more than 2 percent in trading. Utilities and financial sector led the way
with the strongest gains. The French, German, and Swiss markets also rallied, which makes one question how much of that was a Tory rally and how
much of it was a market rally.
Voters in the UK have chosen to stick with Cameron's policies. To join us and put this in perspective, Vicky Price. Delighted to have the
chief economic advisor for the Centre for Economic and Business Research. How wonderful to have you hear. Thank you for braving the weather tonight.
VICKY PRICE, CHIEF ECONOMIC ADVISOR, CENTRE FOR ECONOMIC AND BUSINESS RESEARCH: It's not exactly warm.
QUEST: It isn't. But the politics are hot.
(LAUGHTER)
PRICE: Absolutely right. And of course, I used to work for Vince Cable.
QUEST: You must be very sad to see him go.
PRICE: I am sad. He was actually really liked in the business community, and they were all hoping that he would carry on, because he had
made quite a difference in terms of at least having some policies which they believed were going to stay on after the election. Now, of course, we
have no idea.
QUEST: And as was made clear in the statement, it wasn't a vote against Cable, it was a vote against the coalition. What happens now
economically? The market's rallied absolutely sharply over the last day. Why?
PRICE: Well, it's not fantastically surprising. Because of course, first of all, we'll have a more stable government. We don't need to worry
about coalition negotiations going on for such a long period of time that would destabilize the markets.
They were all worried about that, how long will it take, who's going to go with whom, and what does it actually mean in the long term? At least
now there is a government which has a majority, even though it was going to need help in various places.
But in addition, I think, there are very important things, such as the fact that tax rates are going to stay low. We're not going to have an
increase in the highest rate of tax, and we would have had under Labour.
Corporation tax, of course, will stay low. Capital gains tax isn't going to change, at least there's no plan for that. So, there is certainty
from that point of view.
[16:19:54] QUEST: But the overhang, the single biggest overhang of the European question, there's been no immediate reaction in the market.
Now, is that because they just don't believe it's going to happen, or they're just waiting for it to happen?
PRICE: I think it is going to happen, but of course, you've got to bear in mind that they had already discounted -- or at least they were
quite depressed about some other things that would happen. The --
(CROSSTALK)
QUEST: Can I -- forgive me interrupting you.
PRICE: Sure.
QUEST: I would never normally. We need to go to Her Majesty the Queen. She's about to light the beacon celebrating -- commemorating the
70th anniversary of VE Day.
Well, there's the queen, and there's the beacon. It happens at Windsor, that's where Her Majesty has been during the course of the day.
She returned to Windsor after being at Buckingham Palace, where she received David Cameron after -- and then invited him to form the next
government.
It is a solemn day today. The beacon is a reminder of the sacrifice of the Second World War generation. The greatest generation, the one
that's saved the world. In many ways, what we are celebrating today is an election victory, one way or the other, comes about is because of the
sacrifice of those who paid the ultimate price 70 years ago.
The queen is now meeting members of the forces, the young cadets. It was interesting here in the center of London, large parts of the capital
were closed off for commemorative events around the Cenotaph. And I actually saw rather charmingly many people walking around London dressed in
1940s clothing.
Vicky Price is still with us. Vicky, this all puts it into perspective, doesn't it? You have an event like this today, the
commemoration. You have an election at the same time. They are linked in a very grand sense.
PRICE: They are. It also demonstrates, if you like, the political stability that the UK has seen since all this has happened, of course. And
what it also shows is that the people didn't really like the fact that the coalition was in itself bringing a bit of uncertainty about how things
might move in the future.
So, they voted against that. And everybody was talking about how we were becoming much more European --
QUEST: Right.
PRICE: -- how we were going to have this sort of mix of different parties with different views. And so, in the end, the population didn't
want it. They wanted the stability. And it's just very British.
QUEST: That stability, personified by what you're looking at here, Her Majesty the Queen, nearly 90, and the Duke of Edinburgh, who is over
90.
And this will be -- you know, of all the duties that she will have done today, this will have been, besides her constitutional duty to appoint
a prime minister, to recognize the sacrifice of those who paid the ultimate price will have been so important for her.
Two hundred and fifty beacons are being lit across the United Kingdom as we speak. The first beacon being lit by Her Majesty the Queen.
Vicky Price, pull the strands together of all sorts of issues, because -- within Europe, now. We still have Greece. We've now got Britain that's
going to become the truculent child at the table. What happens in terms of those negotiations?
PRICE: I think there's huge uncertainty ahead. I think that's going to be something that is going to prevent, if you like, business investment
from picking up in the UK as it could otherwise do. Because we're already seeing this uncertainty about the referendum stopping the willingness of
people -- of companies to spend any money, really, in the last two quarters.
And that's been pretty bad for the UK economy. And there was concern that we would see, therefore, a slowdown in growth in any case. Now, the
likelihood is that that's not going to be anything like as bad, because at least now they have some certainty because of the economics in the short
term.
But the referendum is going to hang over them, and what happens in the eurozone in terms of growth, in terms of the crisis in relation to Greece,
for example, and some -- loads of other countries not doing that well, means that in terms of exports and growth, this is going to keep us back
from -- prevent us from growing, prevent the UK from growing anything like as fast as it otherwise would.
QUEST: Lovely to see you, as always. Thank you so much. Vicky Price joining me.
The news for the US economy, you can think of it as good but not great. Is good and not great not enough for Wall Street? The market's
reaction, and we'll discuss that after the break. It's QUEST MEANS BUSINESS, we're in London. Ooh, look at that, 267 points, a gain of 1.5
percent. You don't see that every day.
[16:25:06] (COMMERCIAL BREAK)
QUEST: US stocks bounced back after a week of ups and downs. The Dow has advanced more than 200 points in early trading, eventually closing at
18,191. Look at that. It went up like a rocket and it stayed up there. By the time all was said and done, a gain of 267. The NASDAQ was up 58
points.
The gain came on the news that the US added just nearly a quarter of a million jobs in April. And that number shows unemployment is down to a
seven-year low of 5.4 percent. April gains have more than doubled March's disappointing numbers, and there were revisions as well to March, which
revealed a sharp dip after job creation had held steady through the winter.
The jobs shows a gloomy first quarter that saw little growth. Construction, health care, and business services accounted for most of it.
Paul La Monica is with me in New York to discuss this. Paul, look, the jobs was good not great. The market rallied sharply and strongly. And I'm
guessing you're going to tell me it's because they think the Fed won't raise rates too soon.
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Probably I think that is the right read on it, Richard. I mean, the markets rode a big
green bus, if you will, today. And I think one of the key reasons is look at that March number. Even though it was revised lower, it is now looking
to be an anomaly. We had that nice jump in April, over 200,000 jobs added.
And yes, the market now thinks that the Federal Reserve probably can hold off on a rate hike until September. But I don't think it's just that
they're not going to raise rates in June, it's that it's going to be in September.
I think investors just want the rate hike to be done, let's get it over with already. And since the number was not bad, it puts September
firmly on the table, unless there really is a big shock in the economy. And that's good.
I think the worst-case scenario would have been another bad jobs number, and people start wondering, well, maybe it's not September, maybe
it's later in the year. Maybe it's 2016. Now we have some certainty. It's probably going to be September.
QUEST: Now, Paul, there is the old NAIRU, as you'll be familiar with, the non-accelerating inflation rate of unemployment. If we've had
unemployment at around 5, 5.5 percent, we're now starting to see wage growth. We're sort of over 2 percent in the last -- in these numbers.
Now, does that suggest that the position is arriving when inflation through wage growth is about to take off?
LA MONICA: We could be getting closer. You do see here that the unemployment rate continues to fall, seven-year lows, that's a good sign.
But wage growth, even though it's picking up, it's at 2.2 percent over the past 12 months.
As the next tracker shows, we're nowhere close to the 3.8 percent gains that people were getting in the great times before the Great
Recession, 1.7 percent was the low during the recovery, so it's nice that we're seeing a rebound in wage growth, but I don't think we're anywhere
close to the type of level of wage growth that's going to freak out the Fed just yet.
If you're a person with a job, you want more money in your pocket. You're getting a little bit more, but not that much to overcome what little
inflation there already is.
[16:30:01] QUEST: Paul La Monica with the numbers on the charts and at the CNN super screen. Thank you, Paul.
LA MONICA: Thank you, Richard.
QUEST: Plenty of market and business reaction to the Conservatives' win in the UK. I'll be talking to one of Britain's leading entrepreneurs
about money and politics. And Big Ben is chiming half past 9:00.
(COMMERCIAL BREAK)
[16:30:01] RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Paul La Monica with the numbers on the
charts and - at the CNN Super Screen. Thank you, Paul.
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Thank you, Richard.
QUEST: Plenty of market and business reaction to the Conservatives' win in the U.K. I'll be talking to one of Britain's leading entrepreneurs
about money and politics and Big Ben is chiming half past 9.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest in London. There's more "Quest Means Business" in just a moment when we're going to hear reaction from the
trading floors of the city of London too last night's conservative victory.
And Nicola Sturgeon says ending austerity is now her number one priority. Before all of that, this is CNN and on this network the news
always comes first.
The British Conservative Party has been reelected for another term in government after winning a shock majority. The British Prime Minister
David Cameron has vowed to govern for one nation.
(BEGIN VIDEOCLIP)
DAVID CAMERON, BRITISH PRIME MINISTER: I truly believe we're on the brink of something special in our country. We can make Britain a place
where a good life is in reach for everyone who is willing to work and do the right thing.
Our manifesto is a manifesto for working people. And as a majority government, we will be able to deliver all of it. Indeed, it is the reason
why I think majority government is more accountable.
(END VIDEOCLIP)
QUEST: The leaders of the three parties that fared worse than expected all resigned today - and that included the opposition Labour
leader Ed Miliband. Labour suffered a serious blow in Scotland - traditionally one of its strongholds.
(BEGIN VIDEOCLIP)
ED MILIBAND, OUTGOING LABOR LEADER: Britain needs a Labour Party that can rebuild after this defeat so we can have a government that stands up
for working people again. And now it's time for someone else to take forward the leadership of this party.
So I'm tendering my resignation taking effect after this afternoon's commemoration of the VE Day at the Cenotaph. I want to do so straight away
because the party needs to have an open and honest debate about the right way forward without constraints.
(END VIDEOCLIP)
QUEST: In the last half hour, Queen Elizabeth lit a beacon and there - she lights them electronically these days. It's a special beacon to mark
VE Day. The beacon is a somber and solemn reminder of the ultimate sacrifice of those of the Second World War generation and those dubbed the
greatest generation - the one that saved the world.
(BEGIN VIDEOCLIP)
(TRUMPET MUSIC PLAYS)
(END VIDEOCLIP)
[16:35:20] QUEST: Memorial services took place across Europe today to mark the 70th anniversary of the end of the Second World War. In London
trumpets sounded after a ceremony at the Cenotaph War Memorial in the center of the capital in Whitehall.
Pele is recovering from prostate surgery. The 74-year-old football legend is in a stable condition out a hospital in Sao Paulo in Brazil. He
was treated at the same hospital last year when he received kidney dialysis. Pele is expected to be released from hospital in a matter of
days.
The Taliban is claiming responsibility for a helicopter crash in Pakistan that killed Norwegian and Filipino ambassadors. Six people died
in the crash. The Pakistani authorities are disputing these claims. They blame mechanical failure.
It was a tremendous victory for David Cameron and one that no one saw coming or at least if they did they kept quiet about it. Britain's
Conservative Party scored a convincing in and even managed an outright majority in Parliament.
As the votes came in, the waiting game turned into an emotional rollercoaster for the winning and the losing parties. CNN's Nick Glass
watched the night's events.
(BEGIN VIDEOCLIP)
NICK GLASS, CNN REPORTER AT LARGE: After the dullest of campaigns, a frankly startling result. Not even David Cameron had quite imagined this.
It was, he said, the sweetest victory of all.
CAMERON: There's only one opinion poll that counts and that's the one on election day. And I'm not sure that's ever been truer than it is today.
GLASS: Within hours of retaining his own seat, he was off with his wife to see the Queen and the formality of being asked to form the new
government.
At his camp, Labour's Ed Miliband already looked like a haunted man. This had been an election about leadership and he had emphatically lost.
MILIBAND: This has clearly been a very disappointing and difficult night for the Labour Party. We haven't made the gains we wanted in England
and Wales --
FEMALE HECKLER: Because of you -- !
MILIBAND: -- and in Scotland - and in Scotland we've seen a surge of nationalism overwhelm our party.
(APPLAUSE)
GLASS: Within hours he had stepped up to another microphone and resigned.
MILIBAND: I take absolute and total responsibility for the results and our defeat at this election.
(APPLAUSE)
GLASS: Nick Clegg -- for seven years Liberal Democrat leader -- also fell on his sword.
NICK CLEGG: Clearly the results have been immeasurably more crushing and unkind than I could ever have feared. For that, of course, I must take
responsibility and therefore I announce that I will be resigning as leader of the Liberal Democrats.
GLASS: A hung Parliament with no clear winner - that's what the opinion polls had persistently predicted. The polls were wrong.
This was a night of heavyweight political casualties, Vince Cable for the Liberal Democrats and his fellow cabinet minister Danny Alexander both
lost their seats as did Labour shadow chancellor Ed Balls and the shadow foreign secretary Douglas Alexander.
ALEX SALMOND, SCOTTISH NATIONAL PARTY: The Scottish lion has roared this morning across the country.
(CHEERS)
GLASS: And so it had. The Scottish National Party led by Nicola Sturgeon taking an astounding 56 of the 59 seats in Scotland.
In his first speech as head of a majority government, David Cameron talked of being the leader of one nation, of making Great Britain greater.
CAMERON: I truly believe we're on the brink of something special in our country. We can make Britain a place where a good life is in reach for
everyone who is willing to work and do the right thing.
(APPLAUSE)
GLASS: Nick Glass, CNN London.
(END VIDEOCLIP)
QUEST: The pound enjoyed a boost against the dollar. The news is a Conservatives' victory. Exit polls showing a widening Conservative lead
drove the pound to its largest single gain in five years.
After tovin eyed peak (ph) - look there you can see the numbers, -- the pound settled at around 155.
Claire Sebastian has spent the day in the markets to gauge reaction on the victory.
(BEGIN VIDEOCLIP)
CLAIRE SEBASTIAN, CNN PRODUCER: There was palpable relief on the markets here in London Friday after the Conservative Party won a slim
majority in the U.K. general election. The FTSE 100 surged around 2 percent at the open and the rally has held pretty steady ever since then.
[16:40:08] The main gain is banks and utilities after Labour policies could potentially fix energy prices and tighten bank regulation were off
the table.
The FTSE 100 moves follow a dramatic night on the currency markets. We saw the pound spike 1 1/2 percent against the dollar, an immediate
reaction to an exit poll showing a Conservative lead.
MICHAEL INGRAM, MARKET STRATEGIST, BGC PARTNERS: Oh it's been frantic and it's been, you know, euphoric. We saw this massive move in sterling
overnight - biggest move that we've seen in six years on the vaguest hint that there might be a majority Conservative administration.
SEBASTIAN: Despite the immediate release, key risks remain for the U.K. economy - a deficit of around 5 percent GDP, one of the highest in
Europe. And of course the now certain prospect of an in-out referendum on E.U. membership.
INGRAM: The U.K. support for Brexit is inextricably linked to the performance of the U.K. real economy. And right now, if it we were to hold
out that referendum right now, Britains would vote to stain within the European Union.
So, assuming that the U.K. economy continues to progress relatively well, that will be the same result in 2017, all other things being equal.
SEBASTIAN: The markets were expecting a deadlock in the general election, and potentially several days of horse trading to form a
coalition. That of course didn't happen. They are now hoping that a majority government, albeit a slim one, will bring stability and above all,
a more secure and balanced recovery. Claire Sebastian, CNN London.
(END VIDEOCLIP)
QUEST: There were 50 million eligible people to vote - or 50 million people eligible to vote in the election. This gentleman was not one of
them.
(LAUGHTER). It's Lord Bilimoria. It's not that he's done anything wrong himself, but peers of the realm -- he's a life peer in the House of
Lord - sits over there -- they are not eligible -- a founder of Cobra Beer.
It's one of those strange things, isn't it?
LORD BILIMORIA, LIFE PEER, HOUSE OF LORDS: Absolutely. We're not allowed to vote but what an election this has been.
QUEST: What is business? Because you're a businessman, you're in the heart of business. Now you've got this result. Business always lives with
whatever hand it's dealt, but what does this hand mean?
BILIMORIA: Well, it depends on which hand you're dealt. If we had the hand that was dealt which Ed Miliband wanted to take us back to the
1970s with high taxes, high spending - that was a nightmare scenario. And that too (ph) propped by the SNP which would even more spending, even more
taxes. We've got debt, we've got debt interest that is more than our defense expenditure.
So having the Conservative Party with an outright majority from a business point of view is wonderful news.
QUEST: Right, but, I mean, you obviously support the party (inaudible)?
BILIMORIA: I do not support the party, I'm an independent crossbench peer. But this is deja vu, because we look at the Indian elections a year
ago. Narendra Modi was meant to be leading the BJP to victory, no one predicted he would get an outright majority.
When he got an outright majority of the last year, he's been able to put into place all the reforms and everything he wanted to do.
And now the Conservative party will be able to do that. They may be able to bring income tax rates down to 40 percent. They'll be able to take
the 20 percent corporation tax rate - one of the most competitive in the world. So that's all great news.
QUEST: On the other hand, -- rah, rah for those events, -- but the business community is now going to face a referendum along with the country
that could see the U.K. taken out of Europe.
BILIMORIA: That's highly unlikely. I mean, --
QUEST: Well you don't know that, sir.
BILIMORIA: Well I do know that in that - but every poll that you take on that erekna (ph) arguments have been made in full, show that the
business community and the country at large would not like to have that happen.
Cameron's going to do his best to try and negotiate a better deal for us. But on the whole, when it comes to the crunch, we know being part of
Europe is better for Britain.
But that's a bit of a red herring because they've got five years in government now. And what they've got to do in five years is continue this
economic recovery. But they've got to do more because I don't believe in any of the manifestos. People spoke about making us more competitive,
making us more productive. For example, investments in R&D and innovations, investment higher education - that's what they need to -
QUEST: Nobody ever argues against investment in R&D investment in infrastructure and the like. But without the Liberal Democrats tempering
the further right of the business agenda, arguably we're going to see a much crueler and meaner agenda.
BILIMORIA: Not at all because the Conservatives that I see at the moment - at least David Cameron's version of Conservatives would be a
compassionate conservatism.
They would say that the Liberal Democrats held them back from a lot of the really good business reforms that they wanted to put through. The
Liberal Democrats for example want to abolish the House of Lords. Nick Clegg was adamant on demolishing the House of Lords.
QUEST: But when you then look at things like non dom tax status, you look at, for example, the mansion tax -
BILIMORIA: Yes.
QUEST: You look at bankers' bonuses. Some of those may have been anti-business or not liked by the business community, but some of them --
like the bankers' bonus or the levy - were very popular.
[16:45:09] BILIMORIA: Yes, one thing is what's popular, another thing is what is actually good for business, good for the government and good for
the country. But one of the things that they really can do looking ahead - again, which was not done in this election because election's very
negative, people saying this is wrong, this is not working. Britain's actually what they now need to do over the next five years is to build a
sense of pride in this little country - this 1 percent of the world's population - but we're best of the best in so many things. If they can
build that sense of pride, if they can invest in innovation, invest in R&D, invest in education, wow, this country can achieve anything.
QUEST: We're very grateful that you have come along this evening, sir to come and put it into perspective. Thank you so much.
BILIMORIA: Thank you.
QUEST: Excellent. A new challenge for Cameron emerges on Thursday -- the Scottish National Party. Now they say this general election was not a
referendum or a vote on a potential independence referendum. Can that vote be far away? Next.
(COMMERCIAL BREAK)
QUEST: By jingo, look at that! Magnificent searchlights now. But of course the strong support for the Scottish National Party could change the
face of British politics forever, creating a powerful opponent to David Cameron's austerity program.
As the SNP leader Nicola Sturgeon made clear, her priority - even though she's not in Westminster - the priority for the party - her party,
the one she leads - stop the cuts.
(BEGIN VIDEOCLIP)
NICOLA STURGEON, SCOTTISH NATIONAL PARTY LEADER: The vote yesterday was an overwhelming vote against continued austerity, and that nay (ph)
should have been printed at the top of our agenda in the campaign.
(END VIDEOCLIP)
QUEST: The former leader of the Scottish National Party - SNP - Alex Salmond has declared that the Scottish lion has roared. From the Scottish
capital Edinburgh, CNN's Phil Black reports.
(BEGIN VIDEOCLIP)
(CHEERS)
PHIL BLACK, CNN CORRESPONDENT: It all went one way. The biggest mountains of votes, the loudest cheers - all for the Scottish National
Party.
The vote count deformalized its rampage through Labour's traditional lands and it left just one man standing in an empty room -- the Labour
Party's only surviving member of Parliament from Scotland promised to rebuild somehow.
(BEGIN VIDEOCLIP)
BLACK: It must be a lonely feeling here this morning though as well.
IAN MURRAY, LABOUR MP FOR EDINBURGH SOUTH: Well it's not lonely but there's no celebration. A lot of my colleagues showed to be very
hardworking local members of Parliament have lost their seats this evening, so. Of course I'm delighted to have retained my seat and been reelected,
it's just certainly no celebration. It's been a devastating night for the Scottish Labour Party and one which we'll have to reflect on and
(inaudible).
BLACK: A few hours later in the pubs of Leith, we find only a little sympathy for Labour's annihilation. Just given the rich Labour tradition
of Scotland, you've got one MP now.
[16:50:04] Male: Yes, well I mean sad in some ways, yes it was.
BLACK: The drinkers here say this part of Edinburgh became SNP territory long ago. You've woken up and has Scotland changed?
Male 2: Not really Scot - Scotland changed about 2010/2011 for me. The Labour Party didn't see it.
BLACK: Yes. To the party's faithful, it's the best possible result after losing last year's vote on independence.
Male 2: By sending 56 SNP MPs down to Westminster, we're saying, 'Right, we define ourselves,' not as precious Scotch (ph).
BLACK: And they expect their new representatives to be a rowdy force in the Parliamentary chamber.
Male: Well, as Alex Salmond said, the Scottish lion has roared.
BLACK: And will continue to do so I suspect.
Male: And well, yes, well.
BLACK: The system here means the SNP was able to claim almost every Scottish seat by winning just 50 percent of the vote across Scotland. The
other 50 percent are left feeling a little uneasy. Are you optimistic about the future of Scotland?
Male 3: Personally, I'm a bit cautious shall we say on (inaudible) stuff - we'll see how it works out. You know, I think it's - it won't be
as very good (ph) having a good strong voice though and they're known for nay (ph) once again that could actually cause more divisions.
BLACK: Scot's don't do euphoria. They know their country's (shots) and political direction has been decided, but its future, its prosperity
and its role within the United Kingdom are far from secure. Phil Black, CNN Edinburgh, Scotland.
(END VIDEOCLIP)
QUEST: As Scotland says farewell to Labour, it's time for us to say farewell and goodbye, adieu, au revoir to the Big Red Bus. It was quite a
night on the streets of London. I'll show you the "Best of the Bus" next.
(COMMERCIAL BREAK)
QUEST: So while Britain was watching, waiting, and in some cases, celebrating, there were those of us who were on the upper deck of a bus.
(BEGIN VIDEOCLIP)
QUEST: We are with the Election Band on the #BigRedBus. We are passing 10 Downing Street. That's the home of the British Prime Minister
down there. Strike up the band!
(MUSIC PLAYS)
QUEST: And we have another passenger. Yes, with that first exit poll, Davis Cameron now takes a seat at the front of the #BigRedBus. These
of course are the various political leaders that you've been talking about. David Cameron in the lead, Ed Miliband - if the exit poll's right - looking
less than cheerful. Nick Clegg wiped out and the power - well she was going to be the power behind the throne - but Nicola Sturgeon is now
looking less like that.
We are now crossing Waterloo Bridge - the magnificent view - up towards the city of London which of course is the financial district. And
this way over towards the Houses of Parliament, the London Eye reflecting Waterloo Bridge.
What do you make of the result this evening, sir?
Male: Why the plastic moves (ph) for business, great result and hopefully a prosperous mixed (ph) election.
QUEST: Here are the morning papers. The "Daily Mirror" - "Five More Damned Years?" That's obviously the left-leaning Labour paper. The "Daily
Express" - "Now Give Us a Vote on the E.U" -- a rousing call to David Cameron to give that vote.
[16:55:16] The "Star" - "Bullied at the Ballot Box, Victors Intimidated by Political Thugs." No one saw this - I'm going to show you
graphically like few others can like CNN what today meant. This is the Big Red Bus -- #BigRedBus and right at the front, David Cameron of course has
the poll position.
He now becomes the victim, he now becomes able to be manipulated by every member, every back bencher in his party who will threaten, who will
cajole and ultimately who will blackmail him to what they want the Conservatives to do.
And remember one other important point - that referendum in 2017 - he's promised it, he has to deliver on it and it will be the issue that
will define his next premiership.
(END VIDEOCLIP)
QUEST: So there you have it. On the Big Red Bus. All aboard. (RINGS BELL). "Profitable Moment" next.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." It is so fashionable and easy to say voting doesn't count, it doesn't matter. Cynics say why take part?
Last night there was a good example of why I've always believed voting is one of the most important civic duties that any of us will ever take part
in.
The spoke - the people spoke, the nation spoke. And although you may not like the result, well three political leaders have gone, a country has
changed direction in terms of Europe potentially, and a major, major operation is now underway.
And that's "Quest Means Business" for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's
profitable. Chime the bells!
(END QUEST SHOW)
END
