There are various parts of EU laws and procedures which the UK currently opts out of. The most obvious, of course, is the single currency agreement. Additionally, the UK has not yet signed up to the Schengen agreement. Under this agreement, no documentation of any kind (not even ID cards) is necessary to move between those countries which are signatories to the agreement. So there are no border controls at all restricting movements between Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden. (Iceland and Norway, which are not EU member states, are also signatories to the Schengen agreement). The only two countries from the 'old' EU (before the inclusion of some former eastern-block countries) which are not Schengen members are the UK and Ireland. Ireland wants to join Schengen but it would only be able to do so if passport controls were introduced between Northern Ireland and the republic. As usual, it's the UK which is out of step with the rest of the EU.
Chris