Are there any viable options for Britain leaving the EU?
If Britain votes to leave the EU, it will have to negotiate a new trading relationship with what would now be a 27 member organisation, to allow British firms to sell goods and services to EU countries without being hit by excessive tariffs and other restrictions.
Leave campaigners say: Britain could negotiate an "amicable divorce", but retain strong trading links with EU nations.
Some potential models:
- The Norwegian model: Britain leaves the EU and joins the European Economic Area, giving it access to the single market, with the exception of some financial services, but freeing it from EU rules on agriculture, fisheries, justice and home affairs
- The Swiss model: Britain emulates Switzerland, which is not a member of the EU but negotiates trade treaties on a sector-by-sector basis
- The Turkish model: The UK could enter into a customs union with the EU, allowing access to the free market in manufactured goods but not financial services
- The UK could seek to negotiate a comprehensive Free Trade Agreement with the EU, similar to the Swiss model but with better access for financial services and more say over how rules and standards are implemented
- The UK could make a clean break with the EU, relying on its membership of the World Trade Organisation as a basis for trade
Many of those campaigning for exit argue that none of the country-based models would work for the UK.
They want a
Free Trade Agreement which would not involve the UK accepting the supremacy of EU law, the jurisdiction of the European Court of Justice, the free movement of people or the requirement to pay significant amounts into the EU budget.
Given the fact that there is already full regulatory compliance between the UK and EU, they say it would be easier to negotiate than past trade deals.
They point to
Canada, which recently signed a
Comprehensive Economic and Trade Agreement with the EU, which is set to eliminate trade barriers in most areas but does not require free movement or budgetary contributions, as an example of what is possible
Millions of jobs would be lost as global manufacturers moved to lower-cost EU countries. Britain's large, foreign-owned car industry would be particularly at risk. "The attractiveness of the UK as a place to invest and do automotive business is clearly underpinned by the UK's influential membership of the EU," said a KPMG report on the car industry. The financial services sector, which employs about 2.1 million people in the UK, also has concerns about a British exit. "The success of the UK financial services industry is to a large extent built on EU Internal Market legislation. To abandon this for some untried, unknown and unpredictable alternative would carry very significant risks," said
global law firm Clifford Chance in a report by think tank TheCityUK..
Britain would regain full control of its borders. UKIP wants to see a work permit system introduced, so that EU nationals would face the same visa restrictions as those from outside the EU, which it says would reduce migration numbers. This would create job opportunities for British workers and boost wages, as well as easing pressure on schools, hospitals and other public services, they say.
The UK would save billions in membership fees, and end the "hidden tariff" paid by UK taxpayers when goods are exported to the EU, caused by red tape, waste, fraud and other factors.
The EU is not as important to British trade as it used to be, and continuing turmoil in the eurozone will make it even less so. Even if Britain did not manage to negotiate a free trade deal with the EU it would not be as disastrous as EU-enthusiasts claim, argues economist Roger Bootle in his book
The Trouble with Europe: "It would place the UK in the same position as the US is currently in, along with India, China and Japan, all of which manage to export to the EU relatively easily." The UK would be free to establish bilateral trade agreements with fast-growing export markets such as China, Singapore, Brazil, Russia and India through the World Trade Organisation.
The UK would remain a key part of Nato and the UN Security Council and a nuclear power, with a powerful global voice in its own right. The Eurosceptic Bruges Group wants an end to the "discredited" principle that Britain acts as a transatlantic bridge between the US and Europe, saying the country should make self-reliance its guiding principle.
Britain would gain full control of its own borders, with migration in and out of the country regulated solely by British law. That means it would be possible to impose the same entry restrictions on EU citizens as those currently faced by people from outside the EU. But leave campaigners say that citizens of other EU countries already living in the UK would not be deported and could be given "indefinite leave to remain".
They cite a 1969 treaty signed by the UK which says rights built up over time by individuals cannot be revoked by new treaties. This also means that British expats living in EU countries would not be forced to return to the UK, they say, dismissing claims to the contrary as "scaremongering".
The EU has limited power over tax, which is largely a matter for national governments. The exception is VAT, which has bands agreed at the EU level. Outside the EU, the UK would potentially have more flexibility.
It would be a major shot in the arm for British democracy as the Westminster parliament regained its sovereignty and reconnected with voters. The country would be free from the European Arrest Warrant and other law and order measures.
