In general, the single European market has provided much positive boost for British businesses. UK companies continue to have easy access to export goods and services undeterred to more than 500m consumers. Nonetheless the single market comes with coherent rules across the 28 member states and some of these rules are troublesome. The cost of Britain leaving the EU (or the so called “Brexit”) would depend on the deal Britain negotiates with the EU. There are potentially three viable options:
Option 1: Join the European Economic Area (EEA)
Norway opted for this option in 1994. Britain could do the same and this would give her access to the single market but not the common agricultural or fisheries policies. Britain would have to participate like other EEA members and fund the EU budget. She would also need to adhere to regulation on employment and financial services but with no say on these rules.
Option 2: Have Bilateral Agreements with the EU
Switzerland has not joined the EEA but instead has a series of bilateral agreements with the EU, including a free trade agreement. Britain could replicate such a deal and this would lessen the regulatory liability compared with Option 1. However, such a bilateral agreement could also diminish access to the single market.
Option 3: Leave the EU
The final option would be for Britain to break away from the EU altogether. This would allow her to avoid all EU regulations but at the opportunity cost of barriers to trade. Rules would be created and governed entirely on her shores, but there is no guarantee of better results for local companies, as the current UK planning system exhibits a ‘restrictive’ model.
Sources: Wikipedia, FT.com, ING, Thomson Reuters Datastream