By Elizabeth Piper
NEWCASTLE, England (Reuters) - With a waxed jacket over a crisp suit, and very southern vowels, former commodity broker Nigel Farage cuts an incongruous figure in England's industrial north as he campaigns for Britain to leave the European Union.
But his populist, anti-immigrant message touches a chord among the crowd at a rally in the city of Newcastle, just as it has in other parts of the north, where many working-class voters have been alienated by the demise of much of the region's coal and steel industries.
Farage is campaigning for Britons to vote "Leave" in a June 23 referendum on the country's EU membership, pitting him against Conservative Prime Minister David Cameron and the main opposition Labour Party.
Looking beyond the referendum, Farage is a headache for Labour, which fears his UK Independence Party (UKIP) is stealing Labour supporters in traditional strongholds.
Stopping to debate with admirers and critics in rain in Newcastle, a city about 250 miles (400 km) northeast of London, Farage relishes the exchanges.
"One thing I have noticed in a lot of big northern cities and towns is that people's feeling of patriotism, of nation, is very much more on their sleeve than it might be in Surrey," Farage told Reuters, referring to the affluent southern English county.
"So I think in a lot of these northern towns and cities, it's a very important battle ground," he said of the referendum that will determine Britain's future in Europe and shape the domestic political landscape before a 2020 parliamentary poll.
Farage is a polarizing figure. And while he gets heckled by younger voters who ask him how much he earns and others questioning whether he's racist - something he denies - his message hits home for many in the northeast, where Britain's changing economy has offered little for those left without work.
With unemployment levels close to 9 percent, compared to last year's national average of 5.4 percent, many feel abandoned by a far-off government in the capital and are turning their backs on Labour, which they see as out of touch.
It is by no means UKIP territory yet. At the last election in 2015, won by the Conservatives, Labour held onto many of its seats in the northeast.
But Farage's party moved into second place in several constituencies, prompting Labour to start some soul-searching.
"Socially conservative, working-class voters who value family, work, fairness and national security are the most likely to have deserted the party," said an independent inquiry on Labour's future which was published last month.
Local polls on May 5 did little to change that picture despite the election last September of a new leader, Jeremy Corbyn.
"Has Labour been learning the lessons of (its parliamentary election) defeat and making progress? The results suggest not," the report said of the party's fewer than expected election gains.
Though four years remain until the next parliamentary election for Labour to gain ground, the loss of support in its traditional heartlands has sparked concern among Labour officials.
Labour did not comment specifically on its strategy in the northeast, but said the party's goal with its "Labour In for Britain" campaign was "connecting with Labour voters".
"Our goal is to get Labour voters to vote to remain," a spokesman said.
But self-described "reformed socialist", 75-year-old former local government worker Peter Curtis is a case in point. A lifelong Labour supporter, he now backs Farage.
"Labour has lost its grass roots. People feel disenfranchised, especially over Europe," said Curtis, whose birthday coincides with the vote when he is hoping to receive his "best possible present" of a British exit, or Brexit.
"This is my last passion in life to come out of the European Union."
(Editing by Janet McBride)