UK and the EU: Better off out or in?

David Cameron has promised a referendum on whether Britain should remain in the European Union in 2017, if the Conservatives win the next general election. Here is a summary of the key arguments for and against British membership.

Stay or go: What the two sides say

Key question Better off out Better off in

Compiled by Brian Wheeler and Laurence Peter

Are there any viable options for Britain leaving the EU?

Man picking up EU flag

Yes. Britain could negotiate an "amicable divorce", but retain strong trading links with EU nations.

UKIP leader Nigel Farage says Norway and Switzerland have thrived outside the EU. Both countries have access to the single market but are not bound by EU laws on agriculture, fisheries, justice and home affairs.

Some favour the Swiss model, based on bi-lateral treaties with the EU rather than membership of the European Economic Area (EEA), a kind of "EU-lite".

Others say the EEA/Norway model would be easier as the UK is already a member of the free trade area.

Some argue for a clean break from the EU, with the UK free to make trade deals with nations around the word.

No. An "amicable divorce" is a pipe dream.

France, Germany and other leading EU nations would never allow Britain a "pick and mix" approach to the bloc's rules.

Norway and Switzerland have to abide by many EU rules without any influence over how they are formed.

"If we weren't in there helping write the rules they would be written without us - the biggest supporter of open markets and free trade - and we wouldn't like the outcome," argued David Cameron in speech last year.

If Britain went for a clean break from the EU, its exports would be subject to EU export tariffs and would still have to meet EU production standards.

What would be the impact on British jobs?

The Queen visits a caravan factory

With small and medium-sized firms freed from EU regulation, there could be a jobs boom. More than 90% of the UK economy is not involved in trade with the EU, yet still bears the burden of these rules, says the Bruges Group. The Eurosceptic think tank claims pulling out of the EU but staying in the EEA would create 1 million British jobs.

Millions of jobs could be lost as global manufacturers move to lower-cost EU countries. Britain's large foreign-owned car industry would shift into the EU and sectors linked to EU membership such as aerospace would also suffer. Airbus production could move to France and Germany, pro-EU commentators claim.

Would Britons need visas to visit EU countries?

Probably not. UK citizens do not need a visa for many non-EU states and the EU has visa-free travel with many countries.

The real issue is the right of UK citizens to work and live in EU member states, which may be restricted.

Would Britain save money?

The UK paid £8.9bn into the EU budget in 2010/11, says the Treasury, out of £706bn in public spending .That's slightly higher than the country spends on railways and similar to cost of unemployment benefits. The European Commission puts the UK's contribution at £5.85bn.

Yes. It 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. A study by UKIP MEP Gerard Batten claims the total cost to the UK of EU membership, when all these factors are taken into account, is £65.7bn a year.

No. The UK's contribution to the EU budget is a drop in the ocean compared with the benefits to business of being in the single market, says pressure group Business for New Europe. It could be costly for UK exporters if they face EU legal arguments against UK standards - there could be a lot more court cases.

The UK could lose tax revenue if companies dealing with the eurozone, especially banks, move from the City to the EU.

What would be the effect on trade?

"We will continue to trade with Europe, as part of an association of nation states," says Eurosceptic Tory MP Bill Cash.

The UK would also be free to establish bi-lateral trade agreements with fast-growing export markets such as China, Singapore, Brazil, Russia and India through the World Trade Organisation.

Imported food from non-EU countries could get cheaper, as tariffs are lowered.

The EU is the UK's main trading partner, worth more than £400bn a year, or 52% of the total trade in goods and services.

"The UK is always likely to be better positioned to secure beneficial trade deals as a member of the EU than as an individual and isolated player," says Labour's Europe spokeswoman Emma Reynolds. The EU is currently negotiating with the US to create the world's biggest free trade area - something that will be highly beneficial to British business.

Would the UK's influence in the world change?

Hague, Rice, Clinton

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.

Stripped of influence in Brussels, Berlin and Paris, Britain would find itself increasingly ignored by Washington and sidelined on big transnational issues such as the environment, security and trade.

America and other allies want Britain to remain in the EU. The UK risks becoming a maverick, isolated state if it leaves.

What would happen to Britons working in Europe, and EU citizens working in the UK?

Britain would gain full control of its own borders - and be able to control, or stop, the flow of migrants from the EU, which accounted for 27% of total net migration in 2010.

2.3 million citizens of other EU countries were living in the UK in 2011, says the ONS.

A lot would depend on what kind of deal was reached with the other EU nations. 711,151 UK citizens were living in other EU countries in 2011, says Eurostat.

There would be uncertainty for many EU workers now paying taxes in the UK - what benefits, if any, would they be entitled to?

Would taxes change?

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.

"Tax avoidance and evasion will reach crippling levels as our economy becomes increasingly wholly owned by foreign multinationals that make tax avoidance in Britain central to their business strategy," claims pro-European The Observer newspaper.

Would Britain's legal system, democratic institutions and law-making process change?

It would be a major shot in the arm for British democracy as the Westminster parliament regained its sovereignty and re-connected with voters.

The country would be free from the European Arrest Warrant and other law and order measures, but would still have to deal with the European Court of Human Rights, which is is separate from the EU.

Britons benefit from EU employment laws and social protections, which would be stripped away. Withdrawal from the European Arrest Warrant could mean delays for the UK in extraditing suspects from other European countries; and the UK already has some opt-outs from EU labour law, including the Working Time Directive.

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