14/11/2013 12:25 GMT | Updated 23/01/2014 18:58 GMT

The Myth of an In-Out EU Referendum

As MPs discuss the European Union Referendum Bill, it is worth reflecting on a truth which seems to have escaped most people's attention - the idea of a simple in-out decision is a myth. The reason for this is that, should UK citizens vote to leave the EU, further decisions will then be taken as to the nature of the UK's new relationship with the EU as a non-member.

Some form of new trade and economic relationship will, without question, be developed to replace full membership. Yet, as things stand, these dimensions of a referendum decision that would have profound long-term impacts for the UK have yet to be debated.

Two particular alternatives are frequently cited. Let us call them the Norwegian and the Swiss Models.

Norway, with Iceland and Liechtenstein, is part of the Single European Market (SEM) through membership of the European Economic Area (EEA). This means they are part of the largest internal market in the world, with free access to more than half a billion consumers.

It also means that they have to implement all SEM-related legislation (and pay into the EU budget each year) but, because they are not full EU members, they have no formal role in agreeing the legislation they have to implement.

A 2012 report for the Norwegian government investigated Norway's relationship with the EU. Two quotes from Chapter 26 are important in this context: "Norway lacks representation and access to decision-making in the EU, at the same time as having committed itself to adopting large parts of EU legislation. Formal sovereignty is an illusion."

Also: "Norway's model of integration with the EU is democratically misleading, in that it gives the impression of greater national sovereignty than is really the case."

So, for Norway, there is a trade-off between trade and sovereignty, with trade winning out (in 2012, more than 80% of their merchandise exports went to the EU; 55% of merchandise imports came from the EU).

The Swiss model is very different (partly because Switzerland is not in the EEA, contrary to what Sir Andrew Green, chairman of Migration Watch, said in a recent interview with the BBC).

Switzerland has chosen instead to negotiate trade agreements with the EU - currently, about 100 of them - despite which, financial services are still excluded from free trade with the EU.

This morass of agreements is overseen by around 15 joint committees. Given the concerns expressed in some quarters about EU bureaucracy the Swiss Model is extremely bureaucratic and, in the case of financial services, fails to deliver free market access.

So what do we gain from being a full member of the EU? I am only going to focus here on those issues relating to my central argument. Attempts to quantify the benefits and costs of membership are for another time.

One thing pretty much everyone can agree on is that the EU is an extremely complex organisation. But this is inevitable given the fact that the EU is not a country but, instead, has been established and developed by its member states over many years, to balance the varying and sometimes competing interests of those member states.

The essence of EU decision making is completely different to the notion usually put forward - of the EU, "Europe" or "Brussels" foisting legislation on helpless member states.

As the Norwegian government recognises, being a non-member denies them a seat at the policy-making table that they would have as a full member. It is trite but important to note that "Brussels" cannot make policies, because Brussels is a city and cities do not make policies, people do.

But who are those people? In essence, there are two groups who co-decide legislation. One is the governments of the EU member states, whose ministers make up the Council of the European Union. The other is the European Parliament, made up of the MEPs we vote for, as citizens of EU member states.

It is the case that the European Commission, the EUs main administrative body, is the only body which can propose legislation. It is also the case that, whatever the Commission proposes, if it is not agreed jointly by the Council and Parliament, it does not become law. To put it another way, EU laws are decided collectively by our national governments' ministers and our directly-elected MEPs.

A vote to withdraw from the EU would result in UK governments having to spend years negotiating new arrangements with our single largest export market to restore market access - having first to decide exactly what model of relationship should be adopted.

As a result, the idea of a simple in-out vote is a myth. For voters truly to understand the options they face the alternatives, such as the Norwegian and Swiss Models of external relationship, would have to be presented to them. This would, necessarily, require exposing the myth of a monolithic "Brussels" arbitrarily dropping legislation on member states.

Instead, it would have to be made clear that full membership brings with it full participation in EU policy-making, via our government ministers and our MEPs.

Only once that has been set out and explained can the reality of what would be given up by EU exit be fully understood and voted upon.