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Quest Means Business
Parliament Is Seizing Control Of Brexit; Boeing Is Now Bringing Pilots And Airlines To Look At The New Revamped 737 MAX 8; Uber Buys Formal Rival. Aired: 3-4p ET
Aired March 26, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: We are in the last hour of trading on Wall Street before it all comes to an end. The gains -- good
gains -- of the day evaporated near the afternoon. But it is holding on and if no damage is done, it will be positive on the close. Put it
together, together we understand the markets on Tuesday, the 26th of March. Parliament is seizing control of Brexit. Tonight, you will hear from
lawmakers, businesses and voters on all sides of this debate.
One does not simply crack down on memes. A sweeping new copyright law angers European internet users and companies as well. There is a crisis of
confidence in the cockpit, a new report shows just how little time the pilots of the doomed Boeing 737 MAX had to react.
Tonight we are live outside the Houses of Parliament in London. I am Richard Quest, and, of course, I mean business.
Good evening, uncharted territory, unprecedented more than a century, long- standing conventions have been shattered and the twists and the turns since the Brexit referendum. The process is into now a whole new phase.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The ayes to the right 327, the no's to the left 300.
(END VIDEO CLIP)
QUEST: So the no's have it. The no's have it. Now, after that dramatic vote, the British Parliament has seized control of Brexit from the Prime
Minister that has forced some hard line Brexiteers to consider backing Theresa May's deal they twice rejected to ensure Brexit does happen.
What is going to happen over the next 24 hours? This is as best one can understand and follow. Lawmakers are planning the so-called indicative
votes that will take place tomorrow. What will it look like? What will the order paper look like? What will the voting slip look like? The Prime
Minister is set to meet with her back bench committee that was the 1992 -- it's the rank and file members of her Party. They are the ones who will
actually push her around the jaw, they can't at the moment because they've already had one vote of no confidence.
Eventually, MPs are likely to vote on several options for Brexit, including a much softer challenge to change the relationship with the E.U. All sorts
of things, second referendum, no Brexit at all. Bianca is with me. You have been watching them -- you have been in Westminster all day?
BIANCA NOBILO, CORRESPONDENT, CNN: I have been. I have been in and out of Parliament, a very peculiar atmosphere there. Half of them like keep calm
and carry on and you almost want to ask, are you sure you've realized the urgency of the situation? And the other half are running around trying to
design these series of votes, really eager to avert Brexit, trying to get the indicative votes --
QUEST: So they start -- the debate tomorrow starts around what? Two o'clock?
NOBILO: Two o'clock.
QUEST: And they'll debate, and then is there going to be -- there is going to be a voting slip at the end of it?
NOBILO: Yes, so between earlier today and when the debate starts tomorrow, MPs are able to put forward all of the options they want to see on ballot
paper. You outlined a couple of those just then. Then we're not entirely sure how the voting is going to happen because this is all unprecedented.
We understand now that it's going to be the case, the MPs will vote on slips in the lobbies, pink slips.
I know you are very keen to know what these ballot papers will look like? Apparently they are going to be pink, and then they will have the
opportunity to vote for a series of options. And it will be a clear vote, so that means that you will say yes or no to each option, but you won't
rank it.
QUEST: Right, you don't rank it, but it's not like you can only vote one, you can actually vote for them all?
NOBILO: You will be able to express your support for all of the different options, so we understand and then that might lead to a runoff, so this
will whittle. So tomorrow is the whittling process and then there will be another day of Parliamentary business set aside for whatever is left at the
end of that.
QUEST: Good Lord. Where this goes is anyone's guess at this point? We will be tracking the sentiment in Brexit with our brexitometer. Now,
you've got a variety of things if we look at the barometer. You can see exactly the sort of things. You've got a general election, a no Brexit, a
second referendum, a deal or a no deal.
[15:05:10]
QUEST: So, why don't you be the first to give us a try with this thing out? Tonight, tonight, where do you think we are?
NOBILO: I'm going to give you a fangled answer which you will hate, but there are two parallel currents at the moment in Parliament because the
fact that these votes are happening has made some hard core Brexiteers like Jacob Rees-Mogg think again and say that they'll support the Prime
Minister's deal because they think Brexit is in jeopardy. Will that be enough to get her deal across the line? Probably not. But that does mean
her deal is more likely.
On other hand, you have this other current MPs seizing back control from the government wanting to put their options forward and we understand that
Parliament would coalesce around a softer Brexit. So two things are happening at once, so you need to maybe amend your dial for that. But I
thought, I'd give you a confusing answer for your first trial of it.
QUEST: I'm so glad we did that. Hopefully, we'll have a guest that will guess that will get the hang of this at one go. Thank you.
Earlier, a major business group told me all this uncertainty is causing an investment log jam in British industry. The manufacturing association
called Make U.K. says supply chains are integrated with Europe, and a no deal scenario with customs checks across Europe will be the worst possible
outcome.
(BEGIN VIDEO TAPE)
STEPHEN PHIPSON, CEO MAKE U.K.: What the manufacturing community wants in this country is to make sure that no deal is really taken off the table
here. We cannot operate in an integrated sense with the Europeans with the sense that we have, a possibility of having customs barriers and tariffs
and everything else in the way.
QUEST: It looks as though no deal is not going to happen. It's still on the table, I'll grant you, but the indicative vote process, out of this,
what is the best solution for you?
PHIPSON: The best solution is the closest alignment we can have. You have to remember, we spent 45 years in most of our manufacturing, in many parts
of our manufacturing sectors in integrating into supply chains with Europe.
QUEST: I understand that, but if you take the closest possible Customs Union, single market, you are looking at something like a Norway solution,
and that means rule taker, not rule maker
PHIPSON: You know, we supported the Prime Minister's deal because it actually was a comprehensive deal that took down many of those barriers and
gave us a sensible transition period. It's probably wrong to give it a label that exists already. What we need is something that is quite unique
here, and no one has ever done it before in the sense that there is a reverse free trade agreement.
QUEST: But do you think if the Prime Minister does manage to get into the transitional period, it probably won't be her doing the next set of
negotiation. I think we can probably agree on that.
PHIPSON: It looks that way at the moment, yes.
QUEST: Right, but what would come out at the other end of that? That's two years hence? Because again, it's the same option. In the indicative
votes, they are going to be asking Customs Union, Norway plus, Canada minus, Canada plus, plus.
PHIPSON: They are indeed, and our message -- our constant message and the big businesses in this country's constant message is that alignment,
whatever the label you want to call it has to be as close as possible to where we are now. Because we have spent years integrating these things
together.
Look at our car makers, a very good example, but capital goods are the same in this country. Many of those supply chains are linked together. We are
trading in both directions with no delays at the border. We are great at logistics in this country. We have developed fabulous logistics systems
that deliver just in time.
But putting barriers in the way means that we will limit investment in this country.
(END VIDEO TAPE)
QUEST: The Brexit uncertainty is pushing many businesses and consumers to stockpile whatever they can. You might think this will be good for
companies offering storage space. Actually, it is not working out that way. CNN's Isa Soares reports.
(BEGIN VIDEO TAPE)
ISA SOARES, CORRESPONDENT, CNN (voice over): Recent winter months we typically see a decline in business for this cold storage hub outside of
London.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: As you can see, we have reached maximum capacity.
(END VIDEO CLIP)
SOARES (voice over): But this year has proved very different.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: A lot of our existence clients panicking, due to the uncertainty around Brexit and therefore stockpiling and getting goods
shipped in to us in larger box and quantities.
(END VIDEO CLIP)
SOARES (voice over): The site stores produce for a range of clientele -- from manufacturers and restaurants to caterers and small businesses.
And there is space here, for over 2,000 pallets of frozen goods, items such as bread, chicken breasts as well as ice cream. But fully stocked shelves
to present an unwelcome problem in this industry.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We've had quite a few new inquiries over the last couple of months. It's bad for business because in an ideal world, you
don't want to have to be turning away any business.
(END VIDEO CLIP)
SOARES (voice over): Threats of leaving the E.U. without a deal or with a bad one have created a safety first approach for many retailers across the
U.K. who fear trade disruptions. Those with enough resources are stocking up while they have the chance.
[15:10:10]
(BEGIN VIDEO CLIP)
FRASER MCKEVITT, RETAILA ND CONSUMER INSIGHT: UNIDENTIFIED MALE: We know that retailers are taking a number of steps. They have been looking to
hire extra staff working in their customs unit to help to get things through the borders if there should be any delays. They have also been
looking at what they stock. Is there a chance, perhaps, to source things locally from the U.K.?
Everybody wants to do that, of course it's a great marketing tool to talk about locally grown produce and British produce to British consumers, but
the simple fact is, Britain only produces half of the food that it actually eat.
(END VIDEO CLIP)
SOARES (voice over): The government has so far reassured the public that food supply, irrespective of Brexit, will remain unchanged.
A spokesperson for the Department for Environment, Food and Rural Affairs said this to CNN. "The U.K. has a high degree of food security built on
access to a diverse range of sources including strong domestic production and imports from third countries. This will continue to be the case as we
leave the E.U." They added, "While we are making sensible preparations for all eventualities as we leave the E.U., the government is not and will not
be storing food."
(BEGIN VIDEO CLIP)
MCKEVITT: We do know that 10% of consumers have said that they are already stockpiling goods, but another 25% of consumers have said they would
consider stockpiling.
(END VIDEO CLIP)
SOAREZ (voice over): And as Brexit uncertainty continues to fester, businesses and consumers must now choose how best to fill their freezers.
Isa Soares, CNN -- CNN, London.
(END VIDEO TAPE)
QUEST: The European stock market swept to higher ground on Tuesday. There are implications and indications the British's Prime Minister's Brexit deal
could gain some support and that lifted the FTSE. The other European markets' indices, they closed higher as well.
When we come back, Boeing is now bringing pilots and airlines to look at the new revamped 737 MAX 8. But they'll get their first indication of the
changes being made and their requirements of safety. And Uber buys a formal rival, a $3 billion deal, it's one of the biggest deals in Middle
East and tech history.
(COMMERCIAL BREAK)
[15:15:00]
QUEST: Some news, just in, we've received written testimony from the heads of the FAA, NTSB and Department of Transportation in the United States who
will testify about Boeing on Wednesday in the Senate. The acting FAA administrator is expected to say its oversight approach needs to evolve.
When you think about it, what time did they have on the doomed Lion Air airplane? Forty seconds, probably the max. That's how long pilots in
simulators are finding they have to save their aircraft if it's a 737 MAX when re-creating the problems investigators believe brought down Lion Air
flight 610 last October.
According to "The New York Times," the pilots had just moments, less than moments to stop Boeing's software from causing a catastrophic nose dive.
Previous reports say the pilots were scanning a manual, trying to understand what had happened and what they needed to do. Nothing that the
plane was doing, according to anything they've ever seen before or had been trained for.
The plane, of course, plunged into the sea. David Soucie is a former FAA safety inspector. He is in Denver. I've read, David, that what supposedly
happened and on how the pilots in the simulators reacted. But, David, Boeing has always maintained that switching off the motor to the stabilizer
is the recognized way of dealing with it. So why was it different in this case?
DAVID SOUCIE, FORMER FAA SAFETY INSPECTOR: Well, there are two things, Richard, one is that the pilots weren't aware that it was even in play
because when you turn off that MCAS system or when you turn off your auto pilot, you think that you are in total control. So the response -- the
natural response isn't to think of an electronic thing that you need to turn off. You think that there is something physically wrong with the
aircraft pushing the nose down. So that's where your mindset is and that indicates to me there may not have been enough training for pilots to
recognize the difference between the two things.
QUEST: When this happened and in listening to it, I mean, it sounds like there was a very short window to identify and work out firstly, we're going
down in the stabilizer. Secondly, I need to do the remote -- the auto stabilizer trim procedure. How did Boeing get this one so wrong?
SOUCIE: Well, Richard, there is a couple of things, a couple of speculations, but one of them is to me is just kind of an over confidence
in the fact that they felt that this system was not a primary control system. It was simply designed by the group that says we need to modify
the way it flies to make it fly more like the previous version.
So they didn't think of it as being a primary flight control issue when they first approved it as engineers, they only approved it for about 2% of
deflection, but the way that the software interpreted that and the way it came out was that every time you use the trim, it resets itself, allowing
it to go past the two-and-a-half, past the two-and-a-half, every time you do that so it could end up at 9.8 degrees of deflection.
So I think what happened here, Richard, is not enough communication, not enough understanding among the entire system, not just that one system, but
how it affects everything.
QUEST: And, David, the FAA acting administrator is due to say, we believe before Congress, that the reason they didn't ground the fleet is because at
that time, there was no systemic reason to do so. They could not find the systemic reason. Well, bearing in mind everyone else had an abundance of
caution, do you think his reasoning holds water?
SOUCIE: He's wired to the wrong side, Richard. In that point, he should have been thinking, what reason was there to not ground the aircraft? Not
reason there was to ground it, but what reason is there to keep it flying? And that is a change in philosophy and it needs to be examined, not only by
him personally but by the organization.
QUEST: David Soucie in Denver, Colorado. David, thank you. For Boeing, it is an unprecedented crisis for the company. Two of its jets have had
fatal crashes. The U.S. Justice Department has issued criminal subpoenas and the 737 MAX fleet remains grounded across the globe.
And yet, despite all of this, Boeing still rules the skies.
(BEGIN VIDEO TAPE)
QUEST (voice over): If it ain't a Boeing, I ain't going. It's a mantra amongst pilots that dates back to the company's earliest days. And in
2018, it drove Boeing to a record-setting 806-aircraft deliveries. Six more planes than its rival Airbus.
[15:20:10]
QUEST (voice over): An enviable reputation for safety is now scarred by the twin disasters of Lion Air 610, Ethiopian 302. The ensuing crisis is
sure to leave a mark on the company's profitability.
(BEGIN VIDEO CLIP)
JOHN STRICKLAND, AVIATION EXPERT: Boeing certainly is going to take some financial hits as a result of these two accidents. The question is, how
much?
(END VIDEO CLIP)
QUEST (voice over): The Indian Airline's SpiceJet has been forced to ground its thirteen 737 MAX 8 jets as a part of the worldwide grounding of
the aircraft.
(BEGIN VIDEO CLIP)
AJAY SINGH, CEO, SPICEJET: We are also flying our existing aircraft a little harder. And we have cancelled a few flights. So we are trying to
make do the best that we can.
(END VIDEO CLIP)
QUEST (voice over): Now, the Chief Executive wants compensation for Boeing for the lost revenue. But getting rid of Boeing planes all the together,
Singh says, not any time soon.
(BEGIN VIDEO CLIP)
SINGH: You know, Boeing is a world-class company. They are one of the finest companies in the world and we are confident that Boeing will find a
solution.
(END VIDEO CLIP)
QUEST (voice over): In the age of this aviation duopoly, it's Airbus or Boeing and both are running backlogs on orders, airlines wanting to switch
from one to the other would find that very difficult.
(BEGIN VIDEO CLIP)
STRICKLAND: Airlines tend to have fleet philosophies based on commonality of training for pilots, spares, holdings, engineering support and that
means having made the decision to go for one manufacturer or another, an airline will tend to stick with it.
QUEST (voice over): Even in Indonesia's Garuda which this week said it would cancel an order of nearly 50 MAX 8s has no plans to replace them with
Airbus. If it ain't a Boeing, I ain't going. That mantra may be a risk. Boeing's firm hold on the market is not.
(END VIDEO TAPE)
QUEST: Uber is expanding its empire ahead of a long-awaiting IPO. They're snapping up Middle East rival, Careem for $3.1 billion. The deal gives
dominance Uber market dominance in the region. Careem is the largest Middle East ride hailing app with 30 million users across 90 cities.
Careem will keep its name in the region. I spoke to the co-founder last year, two years ago. Magnus Olsson explained how his company has managed
to thrive in a crowded market.
(BEGIN VIDEO CLIP)
MAGNUS OLSSON, CO-FOUNDER, CAREEM: We started here in the region first and I think what we are seeing globally as well, is that in many regions of the
world, the regional players are being very successful, and I think the answer is, the reason for that is the same across the regions, that it's
really about catering to the local needs. There are quite significant differences between markets and even between cities.
(END VIDEO CLIP)
QUEST: There are differences, a user of Careem, John Defterios joins me from London. So the fact that Uber is buying in this sense, is this a
failure of Careem or a great success that it's managed to carve out, but ultimately couldn't hold up against Uber?
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: I think it could hold up, actually, Richard, and I think it's a compliment for what Careem has built
over the last seven years. We have a talk here in London about the knowledge of the black cab driver, that is what Uber is buying into Careem
because of the fascinating, but very complex market of the Middle East and North Africa. Let's knock off a few things here that are important.
It's the first tech unicorn in the Middle East to go down, well valued over a billion dollars as a unicorn at $3.1 billion. It's also the second major
tech company to be bought out from Dubai, the other was Amazon when it bought souq.com, the online retailer and I think we have to say, Richard,
in this case, because of this complex market, kudos goes to Dubai here because it's gone beyond trade, beyond tourism and beyond financial
services and showing it could be a tech hub.
The man you interviewed, Magnus Olssen is a Swede, his partner is Pakistani. He will remain the CEO of the group and the brand will live --
Careem -- Richard, so to the point it not being a failure, and Sheik Mohammed Bin Rashid, the ruler of Dubai sent out a tweet today saying,
"Everybody laughed at us in 1999 when we launched Dubai Internet City. Having this deal go out today, having the companies flourish, both souq.com
and Careem is a testimony to what we have been able to build."
Particularly, I would suggest, Richard, in the last five years, Dubai when it comes to technology finally clicking in, getting some start-ups there.
QUEST: So why? How is it doing it, John? I mean, I'm not surprised that His Highness has put out that tweet? But is it justifiable?
[15:25:06]
DEFTERIOS: Justifiable in the sense because they have been waiting to get some traction in this sector. And I think we have to remember, Richard,
Uber does not have a great track record in the emerging markets and I think they needed to land something before they go public later in 2019 to try to
justify the $120 billion valuation.
They came out of China because of the competition. Russia was very complex. They've pulled out of eight Southeast Asian countries. They are
finding it very difficult to compete in India and Latin America. So to have a player that's active from Morocco in the West all the way to
Pakistan in the East says something here.
And I think Careem, it was able to maneuver through a lot of local regulations. Don't forget, in the Middle East, some of the government taxi
companies are competing against Uber and Careem. And Careem even offered to take riders with cash as opposed as you know to the credit card
situation that is set up with Uber. So they were flexible, maneuvered through some of the difficult times and what a payoff, Richard, $3.1
billion after seven years of business. Not bad for two McKenzie consultants, neither one from the Middle East who thought they saw a crack
in the market and took advantage of it.
QUEST: And they even call their drivers the captains.
DEFTERIOS: You are correct.
QUEST: We think the two owners of this company are more than captains, they're more like Admirals and Commodores doors of the fleet. All right,
thank you, John. John Defterios.
As we continue tonight, some Brexiteers are changing their tune. They are worried the U.K. might not leave the European Union at all, I beg your
pardon, I will talk to Lord Lamont who manage Britain's money when John Major was in Number 10 and is well clued in on what the hard line
Brexiteers are thinking, in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There is more "Quest Means Business" in just a moment. Some Brexiteers fear the U.K. may never leave the E.U.
Lord Lamont will tell me how to ensure Brexit happens. And internet users and companies are furious after the EU passes its so called Meme Band.
Before that, this is CNN and here, the facts will always come first.
The Algerian President Abdelaziz Bouteflika has lost the confidence of his powerful army chief. He is calling for Mr. Bouteflika to be declared unfit
for office. Protesters have been demanding the president step down after two decades in power. He's rarely been seen in public since suffering a
stroke in 2013.
The European plane maker Airbus has landed a major deal to sell 300 passenger planes to Chinese airlines. The agreement was signed as China's
President met European leaders. Xi Jinping met the talks in Paris with President Macron and Germany's Angela Merkel.
There's a tense calm on the Israel-Gaza border after a serious flare-up in violence. Israel has extra tanks and troops on patrol today and remains on
high alert. Overnight, Israel bombed dozens of Hamas targets in retaliation for Monday's rocket strike on a home near Tel Aviv.
Prosecutors have dropped all the charges against the American actor Jussie Smollett. Smollett was accused of staging a hate crime and filing a false
police report. He had claimed he was the victim of an attack back in January. Smollett insists he's been telling the truth. But Chicago police
and the mayor say this is a whitewash of justice.
The British parliament will hold up to seven votes on Wednesday. Well, we're not quite sure how they're going to do it. But law makers are
scrambling to find a way forward for Brexit. For some Brexiteers are changing their tune, signaling they'll back Theresa May's deal.
It's not because they like it any more than before, it's because they feel Brexit is slipping away. The U.S. skeptic Jacob Rees-Mogg who heads up the
ERG, European Research Group tweeted, "the choice seems to be Mrs. May's deal or no Brexit.
Now, lord Lamont is with me, Norman Lamont; the former Finance Minister. You look at -- you worry about how the mechanisms for these indicative
votes. It is not clear how they're going to do it. But is it your fear now that Brexit is slipping away?
NORMAN LAMONT, FORMER FINANCE MINISTER, UNITED KINGDOM: I do believe Brexit will happen in one form or another, but I think the best way to
ensure that it happens is to wait for the deal. I mean, I've said that some time ago, it's not just something I'm saying today. It's been obvious
to me for some time that by making objections to so many different aspects of it, the Brexiteers are in danger of making perhaps not a perfect deal
into an enemy of Brexit.
QUEST: How did they get it so wrong? How did they not realize that MV2 was the moment to sign on? Because thereafter, the cascading events were so
unknown?
LAMONT: Well, I think there was an assumption from the very beginning that one could get to no deal, and that no deal would be allowed to happen. I
personally have always been very skeptical about that. I felt that parliament, by one means or another would obstruct the course towards no
deal.
QUEST: Certainly, we had indicative votes on that in the earlier part. But it begs the question, what does happen next? I mean, in your view?
We've got these votes tomorrow, which were -- we're not entirely certain the mechanism. But they're supposed to give an indication of what
parliament would find acceptable.
LAMONT: Well, they're supposed to, of course. Nobody knows quite what form of voting, quite how this is going to be done. An extraordinary -- an
extraordinary amount of power seems to be in-ceded to the speaker to decide this. Are people going to list things, one, two, three, four?
Is it going to be preferential voting? Are the results going to be made public? I would hope so, that will be an outrage if members of parliament
voted secretly. But how are they going to publish all their preferences or fill up half a newspaper if they do that. So I think it's very unclear
where this will lead.
And, of course, it is not mandatory on the government, but the government have taken a step down this road, which, of course, makes it from the
government's point of view rather dangerous. Because if you go down this road a bit, people are saying, well, what's the point of this? Why aren't
you bound by it?
[15:35:00] QUEST: And when would you expect MV3, meaningful vote 3 on the Prime Minister though? Now, I know what she said in the house, yes, so
she's not going to bring it back because there was no support for it. But that support will only come from the ERG and the DUP.
LAMONT: Well, that's right. I mean, it looks to me today that it won't happen this week. But I wouldn't be surprised if I woke up and was totally
astonished? I don't know everything that's going on. I very well thought it could well be next week. But perhaps it will never be moved if they
don't think they can get it through.
QUEST: What's the mood like over there?
LAMONT: I think the mood is chaotic and --
QUEST: Really?
LAMONT: And the mood rather depressed if --
QUEST: When you're walking round in the tea rooms and all of that, it's -- there's a feeling of people shushing in the corners and whispering.
LAMONT: Well, I didn't know about whispering in corners. But I -- there's a lot of acrimony, I think it's not good in Westminster, I've never been to
meetings before where people have been so ill-tempered with each other.
QUEST: What will it take because -- what would it take to get the ERG, the European Reform Group -- research group and the DUP on board, bearing in
mind the backstop is not going to go, that's there. So the -- what? She's had the commitments, but what do you think it will now take to get those
MPs to sign on?
LAMONT: Well, I think it's not for me to speak for the ERG, it's not my -- I don't have any authority to do that. I'm not strictly speaking a member
of it.
QUEST: But you know what they're thinking is?
LAMONT: I know quite a lot, I've got a lot of friends --
QUEST: Yes --
LAMONT: And I do know what they're thinking.
QUEST: Yes --
LAMONT: You know, I personally think they will be well advised to understand that, well, this from their point of view is not a perfect deal.
It is the only deal that is going to happen and have a chance of delivering Brexit. I think you will go back to a longer extension, two years or
something like that, Brexit would never happen.
We have a very long extension with every month that passes, the momentum diminishes, legitimacy of demand for a second referendum will increase.
So, I mean, I have -- I think quite a lot of conservative MPs --
QUEST: Right --
LAMONT: Are coming around to this, but the DUP though, I see no sign that they are changing their objection, but perhaps there's something happening
in private, I don't know.
QUEST: So let's have a -- we've got a -- it's so uncertain. We decided to employ a Brexitometer. Which under Brexitometer, it has a variety here.
We're going to track the change. So these are your options, a general election, a no -- in fact, as you see it on the screen in front of you, a
general election, no Brexit, second referendum, leaving with a deal, leaving without a deal. As you look at it tonight, as we are sitting
talking now, which way is the wind blowing?
LAMONT: Well, I think the wind is blowing a bit towards a softer Brexit or a longer extension. I don't think the wind is blowing towards a second
referendum. In fact, I think you'll find on the options that people vote on the second referendum won't be because people don't think it would be --
QUEST: So that's a deal, so that's a deal in a variety of a deal. Good to see you, sir, thank you, thank you very much indeed. Now, the British
government has responded to the online petition to revoke Article 50. The government's response is simple, it's no. The petition got nearly 6
million signatures, the government points out three times as many people voted for Brexit.
So all sides are jockeying to control the process. And our conversation with you continues at cnn.com-slash-join. Who can secure the best Brexit
outcome? Parliament, Theresa May or the British citizens through a second referendum? That's at cnn.com-slash-join.
Who is best equipped? Meanwhile, tensions are running high up and down the country. Let us not forget, London is only one part of -- and the others.
Nina dos Santos is in the strongly remained city of Brighton, first, Anna Stewart is in the leave support city of Peterborough.
OK, let's start with you, Anna. Anna, what are they making of what's happening and how Brexit is very close to being -- well, it's more -- it's
in more danger than it's ever been?
ANNA STEWART, CNN REPORTER: Well, I think your last guest lord Lamont said there's a feeling of ill-temper in Westminster and that spreads well beyond
Westminster and London. I'm feeling it everywhere I travel this week in the U.K., I'm focusing on remain areas.
The feeling here is that they cannot understand, they voted and they did vote in their droves nearly three years ago to leave the EU and we're
still having this conversation. Now, 61 percent of people here voted to leave the EU, and I met one chap called Tony, I want to bring you what he
had to say.
He wants to leave the EU, but frankly, at this stage, he's just fed up talking about it. I asked him what he wants to happen next.
(BEGIN VIDEO CLIP)
[15:40:00] UNIDENTIFIED MALE: Better imagine what they're going to do? Better imagine what they're going to do. The senior asked a comments here,
distracted their bones, they're picking their noses.
(END VIDEO CLIP)
STEWART: Now, there are issues for someone like Tony of a sovereignty, there are also issues about immigration, Richard, plenty of thorny
problems. The people I've spoken that voted to leave have not changed their minds.
QUEST: So to Nina, Nina dos Santos, as I -- what are people there wanting? I mean, how are their views changing? Not so much actually how they're
changing their minds, but what are they making of the process going on down here in London?
NINA DOS SANTOS, CNN CORRESPONDENT: Confusion, consternation, they're wary of what's going on in Westminster. And essentially, they're just
exhausted with Brexit, Richard. You know, we managed to gain the pulse of a few people on the streets here in Brighton which is a city of 275,000
people that voted really strongly in favor of remaining.
It was nearly 70 percent in favor of remaining in that referendum with a huge turnout of nearly three-quarters of the eligible population. But now
people are saying, well, we're just sick of the word Brexit, it's a toxic subject, and there is nothing polite we could tell you about the
politicians that you could actually broadcast.
Nevertheless, here's a snippet of three points of view on the street that speaks to exactly what's going on today politically.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The way the parliament has taken control, I don't think it will help at all. I think it's just going to make it even more
confusing and more delay.
UNIDENTIFIED FEMALE: I think they even need to figure out now only the end lap. Our generation figure out in a few years time.
UNIDENTIFIED MALE: I don't want to leave with no deal on Friday.
DOS SANTOS: And if you can't get that?
UNIDENTIFIED MALE: I'll go with Theresa May's deal.
(END VIDEO CLIP)
DOS SANTOS: Well, Richard, as you can just see, when I was speaking before even the lights on the famous Brighton Pier appear to have given up on this
idea. People as I was saying before are just citing the word on the streets today as being Brexhaustion, even the remain hard-line like this
just wants to see the whole situation over and done with.
And that's despite the fact that there could be according to a local university, some 43,000 jobs could be lost here in this County of Sussex
and nearby Hampshire if we were to see a no deal Brexit in a couple of weeks time, Richard?
QUEST: Right, so continue your travels around the country, please, both of you, as we try to understand the difference between metropolitan London and
the country at large. Thank you. We continue tonight, some think it's off to a slow start, predicting shrinking profits in Q1.
[15:45:00] (COMMERCIAL BREAK)
QUEST: Samsung has issued a surprise profits warning on Tuesday, telling investors its first quarter earnings are going to come up short. The
company is getting hit on both ends by a slowdown in hardware sales. Its own phone, of course, and in Israel as a supplier. It's been such a
profitable party, supplies and the manufacturers.
Contrast all this with Apple which is focusing more on services, including video streaming and credit cards. Our next guest is here to put it
altogether. Michael Nunez is the deputy technology editor at Mashable, he joins me now from New York. Good to see you, sir, thank you.
I apologize I am not -- I am not able to be with you. I am Brexiteering in London. The Apple announcement, let's do Apple first before we do Samsung.
MICHAEL NUNEZ, DEPUTY TECHNOLOGY EDITOR, MASHABLE: Sure --
QUEST: The Apple announcements yesterday, reading this morning, the credit card seems to be a bit of a ho-hum, the magazines seems to be nice to have.
But this idea of television plus or TV plus, there's too many unanswered.
NUNEZ: Yes, I would completely agree. I think everyone was really excited to hear about a potential competitor to Netflix or Amazon Prime. And what
we learned was that Apple is working with a lot of really premium talent. You know, Oprah was in attendance, Stephen Spielberg was in attendance.
So those two names alone I think were enough to make headlines and get people excited about what's to come on this service. The problem is that
we don't know how much this costs, we don't really know what this subscription service entails. And one of the weirder parts of this is that
Apple has not included Netflix in its new Apple TV plus subscription service.
So they're not going to make it easy for you to switch between both Apple creative content and Netflix creative content. And that's kind of the
dream. I think people would like to, you know, swim seamlessly between all of these different subscription services.
QUEST: I'm sorry, but when I look at this idea of a pure rated value, it starts to look a bit like cable. I mean, you pay the subscription and you
got certain content for it, and in Apple's case, it's going to be other people's, but the majority will be other people's content.
NUNEZ: Yes, that's right. I mean, I think this is just a part of a much larger trend that's happening in tech right now. So you know, as you know,
Disney World created its own subscription service very soon, and essentially a lot of big players, all of the big tech players and several
big media players are going be launching or have already launched subscription-based services.
And so what it comes down to is for --
QUEST: Right --
NUNEZ: Millennials that are cord-cutting, they will begin to choose an ala carte-style -- you know, from an ala carte-style menu of different
subscription services. So right now, Netflix happens to be one of the favorites. But I think in the next couple of years or even by the end of
this year, you could see others like this Disney streaming service or Apple's or Apple TV Plus streaming service, you know, begin to find its way
on to millennial's monthly bills, I guess.
QUEST: Right, and finally, the Apple plan, what -- and the Samsung, when you take Samsung. Samsung has its own phones and it makes bits for others.
NUNEZ: Yes --
QUEST: Apple has its own phone and its building services. Which of the two models, do you think has most long-term sustainability?
NUNEZ: Wow, great question. I think, you know -- I think Apple's pushing the services is really interesting. It's definitely a departure from what
the company has done for the past several decades. So this is something that's very new for Apple.
However, they've sold over a billion devices, and they're able to push their content and their subscription services in front of people very
easily. So something like iCloud is a great example. A lot of people have run out of space on their phones from taking pictures, from snapping videos
and so they typically get a little prod from Apple.
A little notification that shows up on their phone that says you've run out of space --
QUEST: Right --
NUNEZ: You should subscribe to our iCloud service. Well, in the near future, you'll also be prodded by Apple to subscribe to other things like
Apple TV Plus, like Apple Music and you know, any of their -- any one of their services that they're --
QUEST: All right --
[15:50:00] NUNEZ: That they're betting on. And then for Samsung, you know, for building hardware, I think it's going to be difficult as time
goes on, because, obviously, chips are getting cheaper, I think the demand for new smartphone chips, for example is decreasing.
You know, people are upgrading their smartphones less and less over time. And then also, companies like Amazon and Google are ordering less chips
from companies like Samsung, because their data, you know, their large data infrastructure warehouses are essentially built and they're you know --
although, they're optimizing those, they're just not scaling quite as much as they were in the past few years.
So for a company that makes computer chips, I think it's going to be really hard to stay competitive in the short-term.
QUEST: Good to see you, sir, thank you, I appreciate it, thank you.
NUNEZ: Thanks for having me.
QUEST: As we continue tonight, and after the break, the EU -- the EU deals blow to tech companies and meme makers, why copyright laws have made
unlikely internet bed fellows in a moment.
(COMMERRCIAL BREAK)
QUEST: The EU has approved new copyright rules that managed to anger both Silicon Valley and internet activists at the same time. The new laws will
make sites like YouTube and Google responsible for any copyright infringements committed by their users.
The media companies and artists have had their eyes on this for years. They say it will help them get fair pay for their content. Meanwhile, tech
companies say they'll have to put in costly filters that threaten the digital economy in Europe. Free speech activists here fear it could amount
to censorship and kill off beloved names like the one you're seeing on the screen.
Hadas Gold is with us. How did they manage to annoy everybody in one day? And why won't these memes disappear?
HADAS GOLD, CNN BUSINESS REPORTER: Well, the whole idea is that these platforms be responsible for any user-generated content that is uploaded to
their sites that might somehow violate some sort of copyright. They have to make sure that they have the copyrights.
What that means is things like those memes like you just showed one from "Game of Thrones", that if they don't have the proper copyright for it,
they might be banned. Now, the EU claims that memes are exempt because there's an exception for parody and satire.
But the tech companies are saying, how will you -- how will their AI, how will their algorithm be able tell the difference between a meme that's
meant for parody and one that's meant to infringe on some sort of copyright. Now, Richard, this all has to do with money. Because what
they're saying is that these platforms are generating profit off of these memes or video clips or anything like that.
[15:55:00] Because they're getting advertising revenue, and that, that money should also be going to the people who created the content. Think
about it, if there's a video of you, Richard, lip-syncing to a popular Taylor Swift song, that Taylor Swift song is copyrighted, and if that video
which I'm sure would go viral, it can make you a lot of money in advertisements.
And what the EU law is saying is --
QUEST: Yes --
GOLD: Some of that should be shared with the artist. You know, people like Paul McCartney is supporting it. On the other side, you have the big
tech companies, Google, Twitter, Reddit all saying that they are not necessarily supportive of this new law.
QUEST: So the new laws come in, I guess it's a case of so what? I mean, get used to it?
GOLD: Well, I mean, so it's not like it's going to be implemented tomorrow. This still has to be approved by European ministers, and then it
will be transposed into law by all the European countries. So there might still be time, so something that might be changing.
And the tech companies say that the devil is in the details because right now they say the law is rather vague on what exactly is exempted and what's
not, and how it should be enforced. For example, will they have to have some sort of content filter because again, they warn that they don't want
to have to impose a content filter that could filter out legitimately --
QUEST: Right --
GOLD: Allowed content. So there still is some room here for development, but this is something that is causing a lot of people to be rather angry
today, especially those meme makers.
QUEST: Hadas, I would offer to do a bit of lip-syncing, but I think that might put an end to a lovely relationship. Good to see you, thank you.
It's the last few minutes of trade on Wall Street. The Dow has given up all of its gains that we saw earlier. A slide in U.S. bonds, take a look
at the Dow, you'll see it and we will have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, there have been so many superlatives about what's happening with Brexit. The biggest, the most different -- you
name it, the precedence that are being broken, the history-making, all of these and more. And tomorrow will be another day, which is why we will be
here, and please, make -- if you can make time to come along as well.
As we see what it's like when MPs run the institution, that the executive, the government is supposed to run. That will be on tomorrow night's QUEST
MEANS BUSINESS, and that is tonight, I'm Richard Quest in London.
(BELL RINGING)
Whatever you're up to in the hours ahead, I hope it's profitable. The Dow is up, the Dow -- the day is done.
END
