Would Britain be better off in or out of the EU?

As Britain edges closer to a referendum on its membership of the European Union, the debate is heating up on the benefits and pitfalls that the 27-member club brings.

For Britain, unlike France and Germany, the EU is almost solely about trade and the single market - rather than about preserving peace in Europe - and that is what both sides of the debate are focusing on.

The anti-EU UK Independence Party (UKIP) claims Britain could save £60bn ($91bn) a year that are currently wasted on EU regulation and administration, plus rising membership fees, which amounted to a net contribution of £6.895bn in 2012.

If Britain leaves the EU it could attempt to emulate Switzerland, which thanks to around 200 bilateral treaties has full access to the EU’s goods market, but not its market in services. Or it could try to copy Norway, which is a member of the European Economic Area.

Experts say the Swiss model is not one that the European Commission and the Council see as sustainable because you can’t see whether (EU rules) are being implemented. So Switzerland is being pushed towards the Norwegian model. That would be “extremely unpopular” in Britain.

UKIP believes that a freewheeling Britain, no longer shackled to a trading bloc declining in global significance, could establish a free trade area with the Commonwealth, home to a third of the world’s population and many fast-growing economies.

But experts argue that Britain would be mad to compromise its relationship with Europe - its exports total roughly the same amount to neighbouring Ireland than to China, Russia, India and Brazil combined.

Over the last 10 years Germany has roughly doubled its exports to rapidly emerging markets and the UK hasn’t. So, if the UK were to leave would it somehow miraculously become more competitive?

Britons would lose out on Europe’s freedom of movement rules, affecting around 1mn Britons who live in Spain and many more living and working across the EU.

The amount of trade Britain has with the EU, 51% of its combined exports and imports, means Europe would be equally as loathe to enter a trade war, which in any case would be prevented by WTO rules.

A figure of 3.5mn jobs in Britain dependent on trade with the EU, often quoted by Britain’s pro-Europe Business Secretary Vince Cable, is also misleading, according to an expert.

“This is based on two pieces of research which are quite old, and even the authors said an exit wouldn’t mean they would all be lost because some trade would carry on,” he says.

Often at the centre of the debate is Britain’s powerhouse financial sector, which accounts for about a tenth of its economy.

The late Margaret Thatcher’s former chancellor, Nigel Lawson, says it is being strangled by red tape from a “jealous” Brussels. EU supporters believe a British exit would mean an end to London as the continent’s financial capital as it loses unfettered access to the single market.

So would Britain be better off in or out of the EU? Nobody really knows.