After Brexit, the EU would continue to be the world's largest market and the UK's biggest trading partner. A key question is what would happen to the three million EU citizens living in the UK and the two million UK citizens living in the EU.  There are economic benefits from European integration, but obtaining these benefits comes at the political cost of giving up some sovereignty. Inside or outside the EU, this trade-off is inescapable.       

One option is 'doing a Norway' and joining the European Economic Area (EEA). This would minimise the trade costs of Brexit, but it would mean paying about 83 per cent as much into the EU budget as the UK currently does. It would also require keeping current EU regulations (without having a seat at the table when the rules are decided).      

Another option is 'doing a Switzerland' and negotiating bilateral deals with the EU. Switzerland still faces regulation without representation and pays about about 40 per cent as much as the UK to be part of the single market in goods. But the Swiss have no agreement with the EU on free trade in services, an area where the UK is a major exporter.     

A further option is going it alone as a member of the World Trade Organization (WTO). This would give the UK more sovereignty at the price of less trade and a bigger fall in income, even if the UK were to abolish tariffs completely.