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Cameron warns of economic threat from Scottish breakaway

Thu, 28th Aug 2014 19:00

* Scots to vote on independence from UK on Sept. 18

* Cameron says 'yes' vote would threaten trade, jobs

* Unpopular in Scotland, PM has so far kept low profile

By Alistair Smout

GLASGOW, Scotland, Aug 28 (Reuters) - British Prime MinisterDavid Cameron told Scots on Thursday that much of their industryand more than one million jobs could be put in jeopardy if theyvote next month to leave the United Kingdom.

In a high-stakes gamble three weeks before a referendum,Cameron travelled to Glasgow to spell out the risks ofsecession, having previously remained largely on the sidelinesof the debate due to both his and his Conservative party'slimited appeal in Scotland.

Ignoring concerns that the campaign to keep the uniontogether has been too negative, Cameron re-entered the fray towarn against the dangers of leaping "into the great unknown".

"Scotland does twice as much trade with the rest of the UKthan with the rest of the world put together," he told a dinnerattended by about 230 members of Scotland's business community."Trade that helps to support one million Scottish jobs.

"This success doesn't happen by accident. It happens becauseof the skill of people in Scotland ... and the opportunitiesthat come from being part of something bigger."

The economic impact of a vote to end the 307-year-old unionwith England has dominated the highly-charged debate, withbusiness leaders finally coming off the fence in the final weeksto spell out their concerns ahead of the Sept. 18 ballot.

A group of 200 Scottish business leaders joined forces tosupport independence on Thursday, one day after a rival group of130 leaders had backed staying in the UK.

Independence campaigners say successive London governmentshave failed to pay heed to the interests of Scotland's $250billion economy, which accounts for about 10 percent of thetotal UK economy.

They argue that Scotland could flourish on its own, settingits own taxes, relaxing immigration rules and tapping the fullbenefits of North Sea oil.

"WALK TALLER, SHOUT LOUDER"

However, Cameron said large parts of the Scottish economywere reliant on demand from customers in England, Wales andNorthern Ireland, particularly in the financial services sector,where around 90 percent of its trade is with the rest of theUnited Kingdom.

As part of the United Kingdom, Cameron said, pensions weremore secure, the currency guaranteed, borrowing cheaper andtrade free from any restrictions on the flow of goods. The largenetwork of UK embassies around the world also worked to promoteScottish business "to walk taller and shout louder".

On the issue of which currency an independent Scotland woulduse, he said: "Everyone knows that if you split up, you don't goon sharing a bank account or credit card.

"If we make foreigners of our neighbours, business becomestougher, trade becomes more costly and complex and jobs becomeharder to find," he said.

Scottish nationalist leader Alex Salmond has said he wantsan independent Scotland to keep the pound, something Cameron andmany other London-based politicians say will not be possible.

Several recent opinion polls show support for independencegrowing, though it still lags behind the "No" campaign.

A "poll of polls" on Aug. 15, which was based on an averageof the last six polls and excluded undecided respondents, foundsupport for a breakaway stood at 43 percent against 57 percentfor remaining within Britain.

Cameron had previously taken a low-profile role in thecampaign, aware that his privileged English background playsbadly in Scotland, where his Conservative party has only one ofScotland's 59 seats in the London parliament.

His return to Scotland was not all plain sailing. Mike Rake,head of the CBI business organisation which hosted Thursday'sdinner, questioned Cameron's pledge to hold a referendum onBritain's European Union membership if he wins a 2015 election.

"We accept that calling a referendum on EU membership is aconstitutional issue for government, but the ambiguity hasalready, and is increasingly, causing real concern for businessregarding their future investment," Rake told the audience.

Cameron has promised an in/out EU membership referendum bythe end of 2017 if he can renegotiate Britain's terms - a pledgeseized on by pro-independence Scots as posing risks for firms inScotland, which tends to be more pro-EU than England. (Writing by Kate Holton; Editing by Gareth Jones)

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