Depending on who you believe, an exit from the EU could give a big boost to Britain’s economy or trigger a sharp drop in output.

The costs or benefits of EU membership ultimately hinge on economics but the studies done so far fail to give any clear answers. The reason is that any referendum on membership will be held before the terms of exit have been negotiated and the details matter.

If the UK does vote to leave, the economy would almost certainly not suffer in the days immediately afterwards; during the period of negotiation, there would be more questions. But in the longer term, all bets are off.

Scotland’s independence referendum provides a useful guide. As the vote came closer, it became clearer that nationalists wanted to keep everything almost as it was in the UK — the monarchy, open borders, EU membership, the currency, banking supervision and regulation from London — while being independent of England, Wales and Northern Ireland.

In its exit negotiation with the EU, Britain would also seek to maintain the status quo, most crucially access to Europe’s single market for goods and services.

Inevitably, there would be a period of uncertainty during negotiations, which could threaten investment, as well as business and consumer confidence.

Beyond that, existing analyses provide little guidance. Studies are often highly partisan and come to completely different conclusions, partly because they have to assume the outcome of exit negotiations; partly because they use different techniques; and partly because they do not describe what the counterfactual — or the alternative would be.

“Most of the existing studies lack a credible counterfactual and they tend to exaggerate the costs and benefits of Brexit depending on which side of the argument the authors sit on,” says Mats Persson, director of Open Europe, a think-tank. “The pessimists say that were Britain to leave the EU, it would become North Korea, while the optimists claim it would turn into Hong Kong. Neither is realistic,” he adds.

Studies such as the one by Ukip assume Britain will keep almost all of the benefits of membership while losing the burdens of budgetary costs and regulation.

The analyses that find gains tend to take a longer-term view, that being part of a large trading bloc spurs foreign direct investment, productivity, prosperity and growth.

There are three big questions that will determine how well the UK economy fares if voters opt for “Brexit”.

Single market

The single market has been positive for British business, giving companies easy access to export goods and services freely to more than 500m consumers. But the market comes with harmonised rules across the 28 member states and some of these are burdensome. The cost of Brexit would hinge on the deal Britain negotiates with the EU. There are three options:

The first would be to join the European Economic Area, as Norway did. This would give access to the single market but not the common agricultural or fisheries policies. Britain would have to contribute to the EU budget and be subject to regulation on employment and financial services but would have no part in making the rules.

The second option would be a bilateral deal, as Switzerland has. This would reduce the regulatory burden compared with the “Norway” option, but could also reduce access to the single market. It is unclear whether such a deal would be on the table anyway.

The final option would be a full break. Britain could avoid all EU regulations but at the cost of barriers to trade. Rules would be made at home, but there is no certainty of better outcomes for companies, as the restrictive UK planning system demonstrates.

Budget contribution

If the UK opts to leave, the government would be able to save at least some of the financial contribution it makes to the EU budget. Britain is likely to pay £11bn to the EU in 2014-15 and the cumulative figure until the end of the next parliament is £63.9bn, according to the Office for Budget Responsibility.

If it maintained current EU trade tariff levels, Britain could also claim the custom and agricultural duties that it currently transfers to Brussels and which the OBR says amount to £3bn this year and £19.9bn by 2019-20.

However, the UK could lose out on payments to farmers and companies via schemes such as the European Agricultural Fund for Rural Development and the social and regional development funds. The OBR forecasts these will total £4.9bn this fiscal year and £29.5bn during the next five years.

In total therefore, the UK could save up to £9.1bn this year and £54bn until 2019-20, but this depends on the deal it negotiates on leaving. Between 2009 and 2014, Norway contributed almost £1.8bn to the EU budget in return for access to the single market.

Immigration

Freedom of movement is one of the four freedoms of the EU — the others are goods, services and capital — and perhaps the most contentious. Advocates say that if Britain left the bloc, it would be able to control immigration from EU member states, rather than having to let everyone in.

But this would be subject to negotiation, with the EU likely to demand free movement for citizens in exchange for easy access to its markets.

If the UK were able to impose some restrictions, the impact would depend on the detail: some UK-born workers would replace foreign-born workers but this would redistribute work and wealth, rather than boosting growth. Conversely, businesses would have a smaller pool of workers to find the skills they need.

Restricting immigration could also have a damaging effect on the public finances. Last November, a study by researchers at University College London showed that during the past decade, EU immigrants paid more in taxes than they received in benefits, making a net fiscal contribution of £20bn.

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