What is the single market?

A trade agreement that allows different countries within the EU to trade across borders as easily as they can within their own country, with no extra tariffs or negotiations.

What kind of trade?

The rules of the single market are governed by the “four freedoms”: the free movement of goods, people, services and capital from one EU member country to another. This idea was integral to the original EEC Treaty in 1957.

What happens when the laws of two countries differ?

If something being traded compromises one country’s national laws regarding public policy, security or health, the national rules take precedence. Otherwise, the EU will usually create a single market law which will legislate for EU-wide rules – for example on the noise made by electrical devices.

What are minimum and maximum standards?

A minimum standards EU law allows individual countries to add tougher rules on top to govern their own country. A maximum standards law means that the EU law trumps national laws.

Can non-EU countries be in the single market?

Yes, but the EU will usually impose a customs tariff on imports from non EU-member countries

BREXIT

Brexit Secretary, David Davis, has said Britain could continue paying into Brussels after it has left the European Union to secure access to the single market.

Mr Davis told MPs the Government wanted to “get the best possible access for goods and services to the European market” post-Brexit.

It is the first time a Government minister has openly signalled money could be handed over to Brussels to secure favourable trading terms with the remaining 27 member states.

Downing Street said his comments were consistent with the Government’s stated position that it was for the UK to decide how its taxpayers’ money was spent.

Chancellor Philip Hammond said he was “absolutely right not to rule out the possibility that we might want to contribute in some way to some form of mechanism”.

But Liberal Democrat leader Tim Farron said they showed the Government’s plans for Brexit were in “chaos” with ministers sending “mixed signals” about future arrangements outside the EU.

Mr Davis’s remarks came during Commons Brexit questions when he was asked if ministers would consider making a contribution “in any shape or form” for access to the single market.

He told the House: “The simple answer we have given to this before is, and it’s very important because there is a distinction between picking off an individual policy and setting out a major criteria, and the major criteria here is that we get the best possible access for goods and services to the European market.

“If that is included in what you are talking about then of course we would consider it.”

Mr Farron said his comments underlined the need for ministers to spell out clearly what their plans were for Brexit.

“The Government are in an absolute mess. We are seeing chaos over their Brexit plans as they keep sending mixed signals on where they stand on basic, fundamental questions like access to the single market, payments to the EU budget and freedom of movement,” he said.

“How can the Government claim they have a mandate for their Brexit deal when they don’t even know what it is themselves?”

But Mr Hammond said: “What matters is that at the end of the day the package we get is a package that maximises the benefit to the UK economy, allowing British businesses, British workers to continue selling the goods and services that they produce into the European Union, and vice versa of course.

“You can’t go into any negotiation expecting to get every single objective that you set out with and concede nothing along the way. It will have to be a deal that works for both sides.

Pro-Brexit Conservative Steve Baker played down the significance of Mr Davis’s comments, suggesting they had been “over-interpreted”.

“Paying for market access would not be free trade but the Government is right not to speculatively rule ideas in or out, however left field those ideas may be. Ministers’ comments seem to have been over-interpreted. I am not concerned,” he said.

And former cabinet minister Iain Duncan Smith insisted there was no way of reaching a deal to pay the EU for access to the single market.

Mr Duncan Smith told BBC Radio 4’s The World At One: “What he’s talking about here is how do you get a deal that allows British and Europeans to access each others’ markets without the necessity of tariff barriers or artificial barriers against service etc.

“I don’t think there’s any way in which you can reach a deal whereby you say ‘I’ll pay some money in and therefore you allow us access’, because you might as well have tariff barriers at that point.”

Prime Minister Theresa May’s official spokeswoman said: “What he (Mr Davis) said in the House this morning is consistent with what we have said to date, which is that it will be for the UK Government to make decisions on how taxpayers’ money will be spent.

“We’ve said, as we approach these negotiations, we want to get the best possible access for British businesses to trade with and operate within the single market, while also taking back control on immigration.”

During his appearance at the Despatch Box, Mr Davis also indicated the Government was open to some form of transitional arrangement with the EU as part of its Brexit strategy.

“We are seeking to ensure a smooth and orderly exit from the European Union, and it would not be in the interests of either side, Britain or the European Union, to see disruption,” he said.

“To that end, we’re examining all possible options, focusing on the mutual interests of the UK and the European Union.”