Two big questions about leaving the EU

5th Sep 2016

There are still two more big decisions that politicians have to make following the vote to leave the European Union. First, when will we start to leave the EU? Second, do we want the UK to stay in the EU’s single market and keep its rules?

When will we start leaving?

Once we officially tell the EU we’re leaving, we have two years until we stop being a member of the EU.

We can have longer if we and all other EU countries agree that we need more time, or if we make an agreement with the EU that gives us a later leaving date. We could also agree with the EU to leave earlier than the two-year end point (although that seems unlikely in practice). Article 50 of the Treaty on European Union sets out these rules.

We haven’t officially told the EU we’re leaving yet. David Cameron deliberately left that to his successor as Prime Minister.

So currently, we’re still part of the EU and haven’t begun to leave yet. Legally speaking, we can’t yet begin to pick and choose which EU rules we want to follow.

Theresa May has said that we won’t officially tell the EU we’re leaving before the end of this year. That puts more time on the clock before the two year timeline starts.  

Legally, the government doesn’t have to act on the result of the referendum. But politically, it would be difficult for politicians to ignore the referendum result.

David Cameron told parliament: “for a Prime Minister to ignore the express will of the British people to leave the EU would be not just wrong, but undemocratic”. Theresa May now says that “Brexit means Brexit”, and that her government will “respect the vote that took place on the 23rd of June”.

While we wait for the process of leaving to start, and even during that process, the UK will continue to put EU laws into UK law and will continue to decide on new EU laws in Brussels. The House of Commons Library has written more about this here. Find out more about the process of leaving the EU here.

Do we want to be part of the EU’s single market or not?

The second big question is what kind of trade arrangement we want to have with the EU once we leave. We need to choose whether we want to be in the EU’s single market.

The single market is meant to make it as easy to trade between different EU countries as if they were all one country. All the countries in the single market have to have similar rules so that there is a “level playing field”, as supporters often put it.

It is possible for a country to be in the EU single market without being a member of the EU. Norway is, for example. That means it’s easier for companies based in Norway to trade across the EU. But the trade-off is less control over other things.

Norway pays to be in the single market, and accepts the rules on free movement of people that comes with it, which means it can’t limit the number of immigrants from the EU.

EU leaders have said in relation to the UK’s options that the single market and free movement are inseparable, although some campaigners have pointed to the exemption for single market member Liechtenstein, which has a population of 38,000.

If we do decide to leave the single market, it’s likely we will try to agree a free trade agreement with the EU.

Trade includes physically moving goods about, and also providing services like financial services or providing research. Most of the UK’s economy is based on services.

The single market is meant to remove barriers to both trade in goods and services. Countries in the European Economic Area such as Norway “enjoy near-full membership” of the single market, whereas others countries have varying degrees of access to it, which can be increased by free trade agreements.

Free trade agreements generally don’t make trade in services as easy. But countries with free trade agreements have more control over their own laws than members of the single market.

These aren’t the only two options. It is possible to trade with the EU or anyone else without a free trade agreement. But the big choice that has to be made first is whether or not we want to be in the single market, and whether or not we are happy with the trade-offs on things like immigration.

Whatever we think is the best option, what it looks like will depend on negotiations with the EU. We’ve written more about this and about what trade would look like under various options here.