And yet, Farage suggested following the model of countries that do almost exactly that might be a good idea:
http://www.express.co.uk/news/politics/591988/Nigel-Farage-EU-European-Union-Ukip
Norway:
Member of European Economic Area, full access to single market, obliged to make a financial contribution and accept majority of EU laws, free movement applies as it does in the EU
Norway is a member of the European Economic Area (EEA) - the single market - along with the 28 current EU members, Liechtenstein and Iceland.
In return for that access to the single market, it pays a contribution to the EU budget and has to sign up to all the rules of the club - including its common regulations and standards.
People from across the EU are free to live and work in Norway too, but the country is exempt from EU rules on agriculture, fisheries, justice and home affairs. The downside for Norway is that it has no say over how the rules of the single market are created.
Switzerland:
Member of the European Free Trade Association but not the EEA, access to EU market governed by series of bilateral agreements, covers some but not all areas of trade, also makes a financial contribution but smaller than Norway's, doesn't have a general duty to apply EU laws but does have to implement some EU regulations to enable trade, free movement applies
Switzerland has a free trade agreement with the EU and a number of agreements which give it access to the single market for most of its industries.
But it does not have full access to the single market for its banking sector and other parts of the services sector, which together make up almost 80% of the UK economy.
Its agreement also requires the free movement of people.
Iceland did everything that Farage doesn't want, so can't imagine that that would be a model that he would be happy for the UK to follow.