Our guide to the big EU question

While David Cameron tries to convince fellow leaders of the need to renegotiate the terms of the EU, the only thing that is clear is that the next two years will be full of spin, misused statistics and scaremongering on all sides.

Here we answer the key questions on the EU referendum:

Why is the referendum important?

The last time Britain voted on Europe it was to enter the common market in 1975. Since then it has grown and changed, arguably beyond recognition. The referendum will give every British citizen a chance to decide whether Britain should be in the EU or out.

What is the European Union?

Today, it is an economic and political partnership between 28 countries.

The original idea came after the Second World War with the idea that co-operating on trade and economic matters would make it much less likely that we would ever go to war again.

The 'single market' lets countries move goods around and allows people to move between the member states for work, treating them as one country.

There are shared rules on transport, consumer rights, the environment and so on.

What will the question be?

The referendum will ask: "Should the United Kingdom remain a member of the European Union?"

When will the referendum be held?

The Conservatives have promised it will be before the end of 2017. Now that Labour has dropped its objections to holding the referendum, it shouldn't have any trouble getting on the statute book. There has been a suggestion it might happen next year if David Cameron can complete his negotiations with other European leaders sooner.

Why don't the Tories just hold it now?

Many people would like them to. But David Cameron says he wants to negotiate a different deal for the UK and then have the referendum based on that.

What does the Prime Minister want?

He wants to cut back on free movement, particularly the rights of people from other European countries to benefits and tax credits.

But this is a sticking point. Belgium's Prime Minister has already said free movement of labour is a red line and there will be no compromise.

Romania, Spain and Finland are also resisting.

He also wants to do away with the the doctrine of 'ever closer union' - the idea that the different countries will keep forging new ways to work together. And he wants the power for Britain to opt out of more EU laws.

Why leave the EU?

The campaign group Better Off Out says we would be free to make stronger trade deals with other nations.

It also thinks we would be able to better control our borders, regenerate fisheries and keep the NHS for UK citizens.

UKIP's Nigel Farage thinks Britain could be like Norway, which has access to the single market but is not bound by EU laws on agriculture, home affairs and justice.

It is also argued that we spend many billions of pounds a year on membership of the EU and get little back in return for it so the money could be put to better use in Britain.

Lord Bamford, of Staffordshire's JCB, said: "We are the fifth or sixth largest economy in the world. We could exist on our own, peacefully and sensibly."

Why stay in?

Some business leaders say the union makes it much cheaper and easier to export goods and that these savings are far greater than the billions of pounds Britain spends by being in the EU.

There is also an argument that restricting immigration from the continent limits the opportunities to attract the best and brightest to Britain.

As a member of the EU we also have clout that our 'special ally' the USA finds very helpful. Some experts also think this link to Europe is what attracts the likes of China and India to invest in the UK.

Will leaving cost jobs?

Some say it will, some say it won't.

The Institute for Economic Affairs says:"Jobs are associated with trade, not membership of a political union, and there is little evidence to suggest that trade would substantially fall between British businesses and European consumers in the event the UK was outside the EU.The UK labour market is incredibly dynamic, and would adapt quickly to changed relationships with the EU."

But in a report on the car industry KPMG says: ""The attractiveness of the UK as a place to invest and do automotive business is clearly underpinned by the UK's influential membership of the EU."

How much are EU migrants claiming in benefits?

Most benefit claimants are British.

But from 2008 to 2013 the number of EU working age benefit claimants doubled from 65,000 to 130,000.

Figures from in a House of Commons Library briefing note last year showed the majority of non-UK working age benefit claimants are from outside the EU.

Last year 92.6 per cent of working age were British and 2.5 per cent were EU nationals.

But in terms of Jobseeker's Allowance alone, twice as many EU immigrants claim unemployment benefit in the UK as there are UK nationals claiming equivalent benefits elsewhere.

How will we deal with Europe if we leave?

Campaigners in favour of British exit, or Brexit, want an 'amicable divorce'.

They want the trading links without the red tape and other responsibilities that go with it.

One possibility is the Norwegian model, where we leave the EU and become part of the European Economic Area. We'd have access to the single market but wouldn't have rules on agriculture, justice and so on.

The Swiss do something different. They negotiate treaties individually.

Turkey, meanwhile, wants to be in the EU but currently has a customs union where there is a free market in goods but not financial services.

The problem is that supporters of being in the EU say this is just a fantasy and that the EU won't want a 'pick and mix' approach to rules.

That seems to be borne out by the Belgian Prime Minister's red line on free movement.

How do we find out the facts?

Research. This is a huge issue and anyone with strong opinions is going to been spinning and slanting the arguments. There has already been a farcical exercise with a UKIP MEP organising a campaign to criticise Sainsbury's for supposedly backing the 'in' campaign.

Except they weren't. It was a life peer, Lord Sainsbury, who hasn't had anything to do with the supermarket for 18 years, who was in favour of staying in the EU.

Sainsbury's never funds political campaigns. Yet Steven Woolfe, the UKIP MKEP who started the #shameonyousainsburys campaign still chalked it up as a win when he tweeted: "Sainsbury's Public Affairs team just rang my office to say they WILL NOT fund the yes campaign. Hope other companies follow suit."