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The Norway option: what is it and what does it mean for Britain?

This article is more than 5 years old

Some Eurosceptics advocate a Brexit and a Norway-style relationship with the EU. We look at six key questions about this model

View of Geiranger fjord in Norway
View of Geiranger fjord in Norway. Many who favour a UK exit from the EU want to emulate the Norway model. Photograph: Alamy

Last modified on Mon 3 Feb 2020 07.38 EST

Many of those who would like to see the UK leave the EU say Norway is the model to emulate.

The Nordic country retains many of the benefits of membership – crucially, access to the EU’s common market – without the same degree of “interference” from Brussels. But euro enthusiasts counter that Norway also misses out on other key benefits while still making substantial contributions.

In an intensification of his engagement with the EU debate, David Cameron, the UK prime minister, will take on the arguments for this semi-detached relationship with the EU during a visit to Iceland on Wednesday.

So what is the Norway option?

You might call it the “nearly but not quite” model for EU membership. Britain would have access to the single market but it would have no vote over EU rules.

Norway’s trade is dominated by the EU, and Norway is the trading bloc’s fifth most important import partner. Whether or not the country should apply for full membership has been one of the most dominant and divisive issues in modern Norwegian political debate.

After two referendums, the first in 1972 and the second in 1994, which both ended in marginal victories for the no side, Norway has negotiated a semi-detached relationship with the EU through its membership of the European Economic Area.

What does membership of the European Economic Area provide?

EEA membership gives Norway full access to the EU’s internal market, allowing it to trade goods with EU states without customs fees, except food and drinks which are subsidised by the EU. Iceland and Liechtenstein are also members of the EEA.

In return for that access Norway is obliged to implement all the EU’s laws relating to the internal market. As a result, Norway has had to implement about three-quarters of all EU legislation, including the working time directive.

What say does Norway have over EU rules?

None. Norway has representatives in EU institutions, but they have no decision-making power in how EU rules are drafted.

The country has been granted participation rights, but no voting rights, in several of the union’s programmes, bodies and initiatives, including the European Defence Agency, Frontex, Europol and the European Monitoring Centre for Drugs and Drug Addiction.

Is the Norway option cheaper?

Yes, but not by much. In 2012, Norway was paying €340m (£245m) a year into the EU budget – the tenth-highest contributor. The thinktank Open Europe estimates that the UK would pay 94% of its current costs (£31.4bn annually) if it left the EU but adopted a Norway-type arrangement.

What about immigration?

The UK has more control over its borders than Norway, which is part of the Schengen border-free area. As a result, Norway has higher per capita immigration than the UK. However, as a signatory to the agreement, it does have a say in how it operates.

Are there alternatives?

Switzerland has a slightly more remote relationship with the EU. Its deal rests on some 120 separate bilateral agreements, many of which Switzerland started to negotiate after it rejected EEA membership in 1992.

These require Switzerland to follow EU law in the areas that give it access to the EU market. The Swiss also pay into the EU budget but less than the Norwegians. And they also have no say in how the rules are made.

Also, where the EEA is dynamic – which means it trails the developments of EU policy in all relevant areas – the Swiss arrangements are static. Crucially, too, they do not cover services, which are so central to Britain’s economy. If the UK adopted the Swiss model then financial services would probably not have access to the EU common market.