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UPDATE 1-Scottish independence battle draws 'day of reckoning' warning to business

Sat, 13th Sep 2014 16:02

* Scottish nationalists warn BP and some banks

* 12,000 loyalists march for the union in Scottish capital

* Survation poll shows unionists in the lead on 54 pct

* Deutsche Bank says desire UK break is 'incomprehensible'

* Ex-PM Tony Blair says breaking the UK is not sensible (Adds nationalist comment, loyalist march, new poll)

By Guy Faulconbridge and Alistair Smout

EDINBURGH, Sept 13 (Reuters) - The battle over Scottishindependence took a bitter turn on Saturday when a seniornationalist warned businesses such as BP that they couldface punishment for voicing concern over the impact ofsecession.

With the fate of the United Kingdom balanced on a knifeedge, the economic future of Scotland has become one the mostfiercely debated issues five days before Scots decide on whetherto break away.

Nationalists accuse British Prime Minister David Cameron ofcoordinating a scare campaign by business leaders aimed atspooking voters while unionists say separation is fraught withfinancial and economic uncertainty.

But former Scottish Nationalist Party deputy leader JimSillars went much further than separatist leader Alex Salmond,warning that BP's operations in Scotland might facenationalisation if Scots voted for secession on Sept. 18.

"This referendum is about power, and when we get a 'Yes'majority we will use that power for a day of reckoning with BPand the banks," Sillars, a nationalist rival of Salmond's, wasquoted by Scottish media as saying.

"BP, in an independent Scotland, will need to learn themeaning of nationalisation, in part or in whole, as it has inother countries who have not been as soft as we have been forcedto be," Sillars said.

When asked about the comments in a BBC interview onSaturday, Sillars confirmed he had raised the prospect ofnationalisation but said he had used the term to get mediacoverage and that nationalisation was not on the table.

A spokesman for BP declined to comment but the boss of BP,Bob Dudley, has said that Scottish independence could cause hiscompany "uncertainties" and that he did not want to see Scotlanddrifting away

Major banks, oil companies and supermarkets have said that avote for secession would create concern. North Sea oil wouldhave to be divided up while there is uncertainty over the futurecurrency and central bank of an independent Scotland.

Salmond did not slap down Sillars but struck a softer tone.

"Mr Cameron and his Tory friends in Downing Street and theLabour front men in Scotland are going to get their comeuppancenext Thursday because Scotland is going to vote yes in verysubstantial proportions," Salmond said.

"It's unfortunate that a number of businesses have allowedthemselves to be recruited by David Cameron and Downing Streetbut let me say, after a 'Yes' vote, and we are going to get one,it is incumbent on us to reach out everyone and build thatatmosphere of 'Team Scotland'."

Salmond demanded an investigation into what he said was anattempt by Britain's government to scare voters out of backingindependence.

In an extraordinarily strong attack on business, Sillarssaid banks such as Standard Life would face tougheremployment laws after a vote for independence.

UNITED KINGDOM?

Until September, all polls but one in 2013 had shown theunionists with a comfortable lead but several surveys this monthshow the nationalists have won over hundreds of thousands ofScotland's 4 million voters.

A Survation poll on behalf of the pro-union Better Togethercampaign found support for staying in the United Kingdom was at54 percent, while 46 percent were planning to vote forindependence on Sept. 18, once those where undecided wereexcluded.

Emotions are running high on the final weekend before thevote which is expected to have record turnout for a Scottishelection.

From the windswept islands of the Atlantic to the inner cityestates of Glasgow, Scots are debating whether to vote 'Yes' or'No' to the ballot paper question they will be asked onThursday: "Should Scotland be an independent country?"

About 12,000 Protestant unionists, including contingentsfrom Northern Ireland, marched through Edinburgh's Old Town onSaturday in an emotional show of support for keeping Scotland inthe United Kingdom.

With fife and drum bands, bowler hats and orange sashes, themarchers said the referendum on Scottish independence, whichtakes place this Thursday, threatened their culture and history.

"It's your own history being taken away from you. What willyou tell your grandchildren?" said Jim Prentice, a gardener,wearing a Rangers soccer club shirt, who had travelled fromsouth of Glasgow to watch the march.

Organised by the Orange Order of Scotland, the marchdemonstrated that the anti-independence campaign could count ona solid, substantial, bloc of votes in Glasgow, Scotland largestcity and the main battleground of the campaign.

But it also injected a sectarian element with a bitter andsometimes violent history into the campaign. The Order is linkedto the Northern Ireland Protestant "loyalist" organizations andmany lodges had crossed over the Irish Sea for the event.

Rivalry between Catholics and Protestants -- famouslymanifested by supporters of Glasgow's Celtic and Rangers soccerclubs -- has often been a blight on Scottish society.

The pro-independence campaign was also pulling out all thestops across the country.

"I think it's probably the biggest day of campaigningScotland's ever seen. It's enormous," Calum Cashley, a "Yes"campaigner and SNP activist, told Reuters.

"I'm running Edinburgh Eastern constituency today, and weleafletted the entire constituency, we've had sweet stalls,people putting posters up in their windows, it's just beenenormous. We're seeing cars go by bedecked with 'Yes' postersand stickers. It's amazing. It's a great feeling and buzz."

DEUTSCHE BANK WARNING

Deutsche Bank said a vote for independence would be amistake akin to Winston Churchill's decision to return the poundto the Gold Standard or the failure of the Federal Reserve toprovide sufficient liquidity to the U.S. banks, decisions thathelped bring on the Great Depression.

"These decisions...contributed to years of depression andsuffering and could have been avoided had alternative decisionsbeen taken," David Folkerts-Landau, Deutsche's chief economist,said in a note to clients.

"Foreign investors come to Scotland because they rely on apredictable investment environment. All of this comes from aunited Great Britain," German-born Folkerts-Landau said, addingthat the desire to break up the UK was 'incomprehensible'

Such is the gravity of the situation that finance ministerGeorge Osborne, Britain's second most powerful man, cancelled atrip to the G20 meeting in Cairns which takes place the weekendafter the vote. Bank of England Governor Mark Carney will leavethe G20 meeting early.

Former British prime minister Tony Blair said he hopedScotland voted to stay part of the United Kingdom.

"To rip up the alliance between our countries would not besensible, politically, economically or even emotionally," Blair,who was born in Scotland, said at a security conference in theUkrainian capital of Kiev.

Investors pulled $27 billion out of British financial assetslast month - the biggest capital outflow since the Lehman crisisin 2008 - as concern mounted over the fate of the UnitedKingdom, a report by London-based consultancy CrossBorderCapital showed. (Additional reporting by Angus MacSwan, Editing by xxx)

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