What should Ed do? Stand firm on Europe? Or let the people decide?

Whenever Miliband follows his convictions he becomes stronger, not weaker

(Getty Images)

The high-stakes game of political poker played over the UK’s membership of the EU takes new twists and turns. At Westminster all three party leaders are in favour of the UK’s continued membership. In Scotland, Alex Salmond is even more firmly committed. At the CBI conference yesterday, business leaders stressed their support. In addition, all the parties agree on the need for changes to the EU. David Cameron plans to negotiate new terms of membership. At the CBI conference, the shadow Chancellor, Ed Balls, repeated his support for Britain’s membership of a “reformed” EU. Nick Clegg, the most instinctively pro-European of leaders, has insisted the institution must change.

Within this consensus there is space for a fruitful debate about precisely how the EU should change. Balls did not specify what reforms he sought. Cameron has not dared to go into very much detail. In spite of the pre-election evasiveness, there would be significant differences between what the three party leaders hoped for. Similarly Angela Merkel is in favour of some reforms to the EU. But Merkel and others will only want to engage if it is in the context of the UK staying in. The engagement becomes pointless if it looks as if sweaty, sleepless negotiations are a prelude to the UK’s departure.

And this is where the poker game in the UK intensifies. As leaders declare their commitment to Britain’s continued membership, we could pull out. The chances of it happening are higher than at any point since the UK joined – for a single reason. After the next election there could be a referendum on the issue. Anything can happen when referendums are held. In fragile economic times, when politicians are loathed and “Europe” is an easy scapegoat, such a poll could easily lead to Britain’s exit.

The only doubt as to whether Britain will stage such a referendum is because Labour has yet to pledge that it will hold one. With reluctance, Cameron is now committed to an In/Out plebiscite. We await Ed Miliband’s decision.

Almost certainly, Miliband awaits Miliband’s decision too. As I wrote recently, the Labour leader has been known to reflect that he could write Labour’s manifesto now. But he has one momentous decision still to make. Does he match Cameron’s offer on Europe, or fight an election without making such a pledge? At one point I was told that Miliband was ready to announce his support for a referendum before this year’s Labour conference. The latest thinking is that no final decision will be made until shortly before the European elections next summer, and possibly not until after the referendum in Scotland where Salmond would make much of both potential UK Prime Ministers risking the UK’s continued membership of the EU by offering a referendum.

For Labour, the stakes could not be higher. Polls suggest that the next general election could be very close. Although Cameron did not want to offer the referendum, it does give him one ace to play. Unless Miliband proposes a referendum too, Cameron can warn anti-EU voters that, if they let Labour in by supporting Ukip rather than the Conservatives, they will not get the referendum they want. In some key Tory target seats this could be a decisive message.

If Miliband does not offer a referendum, he risks uniting the anti-European right around the Conservatives, thereby depriving him of his dream scenario, a split vote on the right. He would also struggle to get through interviews explaining why he is not willing to “trust” the people. Balls, an astute reader of the link between policy and electoral consequences, has warned Miliband that a party cannot be seen to be standing “against the people” in a general election.

So why has Miliband not yet played the referendum card? His shadow Foreign Secretary, Douglas Alexander, who navigated a route towards Cameron’s Commons defeat over Syria, remains a key figure. He does not rule out a referendum offer, but has so far not been panicked into calling for one. He knows that the consequences of holding one could be calamitous if Labour were to be elected. Neil Kinnock, who remains in regular contact with Miliband, is a passionate opponent of such a pledge. Even Alastair Campbell, who is less of an ardent pro-European, is against the move.

It does not take a genius to understand their opposition. Imagine what it would be like for Miliband if he offered the referendum and won the election. There he would be in No 10 following a remarkable ascent to power with a hunger to radically change a country held back by outdated orthodoxies. Instead he would have to focus on holding and winning a referendum on Europe. If he were to lose, he would be finished. He would be the Prime Minister who took us out of Europe against his own wishes.

The levels of madness in this poker game are mind-boggling. The UK is still in the midst of an economic crisis triggered by a global financial crisis that had nothing to do with its membership of the EU. Rebalancing the economy while finding the cash to invest in public services and infrastructure projects will be the overwhelming objectives of any party that wins next time. Meeting these objectives has little to do with Britain’s membership of the EU and yet the next government could be obsessing over nothing else.

If Cameron were to win, he would be spending most of his time frantically negotiating with Merkel and co. He would return to his parliamentary party, be told he had got nowhere near enough, and instructed to get on the next Eurostar back to demand far more. If Miliband were to make the offer of a referendum, he would be doing so even more reluctantly than Cameron. British politics can get dangerously silly, leaders forced to offer referendums they do not want, on an issue which in this case is relatively marginal.

Whenever Miliband follows his convictions, he becomes stronger rather than weaker and acquires a far more convincing authentic public voice. In my view he should stand firm and make the case that the UK should not be destabilised and diverted by a referendum – a referendum that Cameron would only hold in order to keep the Conservative party united. I have no doubt that is what he would do if Labour had a commanding lead in the polls.

But it is a very tough call for Miliband. Labour is unlikely to have a commanding lead. If the next election appears to be close I predict that Miliband will succumb and offer the referendum. It is a vivid example of the nightmarish conundrums faced by leaders in politics. In order to win he might need to offer the referendum. If he proceeds to win, the offer would make governing a nightmare.

Europe continues to torment leaders. It probably will do for decades to come even if a referendum is held. The last one, in 1975, kept a lid on the explosive tensions within and between parties for all of 10 minutes. If another is held, it would resolve nothing – one of many reasons not to hold it. This is a poker game that will never end.