Thank you to the Congress, who have carried the banner on this subject for so very long.

I do feel rather like somebody who has come to sell you yesterday’s news story, because quite clearly both the referendum and the Convention have changed significantly in the last ten days or so. However, I am doggedly going to pursue what I have been doing for the last year.

I was simply asked to prepare for a referendum in this parliament and, as I will explain later, I now think this is so unlikely as to be written off. In my own view, it is dead for this parliament. I will explain why. I want to interpret what is going on in the current situation around the five tests - why isn’t this thing just being announced and get on with the rest of political life? I want to interpret what is happening there in the context of the future of the euro referendum and one has to talk about the picture of the developing politics of Britain beyond this parliament of which, of course, the Convention is a huge iceberg in front of us.

One of the first things I have done is to try to build a coalition. In fact, you can’t build a coalition until you have the immediate prospect of battle, but you can talk to a lot of people, make a judgement as to where they would be on the day if the whistle was blown in this parliament. I have talked to many Conservatives, to the Greens, to Labour, many Labour people, Lib Dems, Plaid Cymru, SNP, in the political parties, to many institutions – business institutions, trade unions, in our society. I have talked to a group of those campaigning for leaving the EU, a body of about 18, which was arranged by David Stoddart. Of course I have talked to a lot of other people, from rebel firemen to revolutionary lords (one or two of whom are sitting here).

I think that the thing that strikes me most is the incredible range of motivations that people bring to the single decision of a referendum. There are people who are absorbed by what is an optimal currency zone and of course many think that Britain is just that, and there are people who think that Scotland is an optimal currency zone. There are people who think this is not the time but will vote for it in two or three years’ time. We have people worried about globalisation. There is an incredible range of motivations brought to this single decision and of course a coalition has to accommodate that as best it can.

What is most striking about this debate is the split in public opinion – 2 to 1 against, broadly, for several years now. These splits are in fact right across all our major institutions, they are not public in all cases yet, but you have splits in business, splits in the trade unions, splits in the party and in the last week, of course, we have begun to see splits in the Cabinet on this issue. So this is absolutely characteristic of a referendum. What I can say is that I am confident that if there had been a referendum in this parliament there would be a pretty broad British coalition in some form or other reflecting that 2 to 1 majority in a referendum campaign. The Conservatives would be a major partner in this.

I would make another point about these splits. The two splits are particularly important – the split in business is incredibly important because people assume that this is not being done for them and their holiday money, but because business want it. The split in business is very important, but the other split that is very important is the split in the governing party. Labour Against the Euro and the future Labour MPs to come out are incredibly important in undermining a government that is faced with trying to convert people from the status quo.

I am not going to talk a lot about strategy but a characteristic again of referendums is that about half of us have already firmly made up our mind one way or another and it would take an earthquake to shift it. But the other half, the median group, about 40% of the population, are the ones who will jump one way or another in a referendum and it is that group we are addressing primarily if a campaign has to be fought. It sounds as if we are taking our own supporters for granted and that is about right. The important thing here is to position ourselves with an appeal to that group, who are actually favourably disposed to us at the moment. That is how the 2 to 1 is created.

In terms of the argument, personally I think that the government can only hope for a draw on the practical merits of all this and I doubt if even that. On the issue of sharing control, I don’t think they will ever convince the British people that sharing control amounts to a row of beans, that they are doing nothing more than surrendering control. I frankly think that that one will be lost from their point of view. On the strategy, the other area is the touchy feely things that Mr Blair likes very much and that is to position us on pessimism versus hope and the future versus the past. Those are the issues they very much like to wrap us into, what they see as the negative end, but we are alive to that at the moment.

We have been doing quite a lot on the campaign organisation. I am not going to talk about it now except to say one of the important things we have looked for is an integrated campaign centre. I think this would be a very significant development in fighting a campaign.

The next question is whether a referendum can be fairly conducted. We have had something like six meetings with the Electoral Commissioner in the last year and although they have not yet been put to the test, I believe that an important new institution has been created, in a typically British way, and on the whole I think the preamble and the question will be fair and broad areas of conduct will be fair. We are left, however, with one area which we are extremely concerned about still and that is that the government’s activity in the referendum period, which can be up to six months, is only controlled in the last month of that. But they are not going to win this in the last month. They have got to at least pre-position themselves to win it before then and it is that period when they are uncontrolled by the law and will rely simply on the guidelines to civil servants. We saw they were very strict in Scotland and Wales about the use of government time and money and resources, but by Northern Ireland they had begun to be more confident to break or bend the rules.

I think now we see a threat there and for that reason we will take legal action at an appropriate time to try to define that area of the conduct of a referendum. The other issue which is of concern to us is broadcasting balance. This in a referendum is not done on a party political basis, it is done on a 50/50 basis, which has the effect of hobbling the government side and promoting our side. However, the way the broadcasters have achieved that in the past is shrouded in mystery and we will be looking for a rather more transparent process as to how it will be achieved.

I want to turn now to what is actually going on with the five tests assessment. It is clear we are going to get a conditional negative. It will be spun as the tests are on their way to being met and tied to eurozone and UK reforms and perhaps timetables. What I want to comment on is the effort that has gone into keeping an option for a referendum open in this parliament because to me this is an option that will prove absolutely unusable except in an utterly reckless manner from the government’s point of view.

What is this keeping an option open about? To explain this a little better I want to give you a bit of technical stuff about referendums. Obviously people make both rational decisions and intuitive decisions in referendums. We are not weighing up single currency zones. And in referendums you can often characterise them by "Is a government trying to consolidate a pre-existing opinion?", which essentially is what happened in Scotland. This is completely different. We are the ones who can consolidate an opinion; the government have to convert opinion. This is an extremely important distinction because once the people understand that a referendum is their decision then it sticks. People think that somehow the government will wangle it through - and they may be right if we let them. However, the fact is: stop it in a vote and it is stopped. Then what happens in a fiercely contested referendum is the voters become a bit more cautious, the floodlights are on the issue, and they begin to see that all the important people in society, the ones we respect, are split on this issue, so why should we abandon the status quo? And so you get a position where the government in order to convert public opinion are fighting an uphill battle and they need time. They do not do this in 28 days. It is a different position if they are slightly in the lead. But they are not in the lead, they need to convert public opinion and that is an extremely important characteristic about referendums: you need time or some catastrophic event – for example, like ERM – to change public opinion in a seriously big way.

Another point I would want to make is that the media are incredibly obsessed with the importance of leadership in these referendums. "If only Tony Blair would lead, voters would follow on behind." Well, I’ve got news for you, that is not actually what happens in a referendum. The majority of referendums show that the voters can separate the issue from the personalities promoting it. Of course the most recent one was in Northern Ireland where Bertie Aherne was in the midst of problems soon after being elected and the voters did not like that at all, but they separated that decision from a decision to come out, which they did not do on the previous referendum, and voted yes. I can give you many other decisions like this.

Actually it is quite simple: it is a single decision, we are not electing a government, we are not electing a president, and so as these things filter through you get a capacity in referendums to realise that this is one decision, independent of the promoters. The result is that the voters rarely use referendums to give government a pat on the back. You hear the press talk about the honeymoon period after a referendum. There was no honeymoon period in Scotland, for example, or in Wales. So the honeymoon period is overrated and I cannot find one example where voters have used a referendum to give governments a pat on the back.

Occasionally they give the government a bloody nose in a referendum but even that is fairly rare. In the vast majority of cases these referendums are decisions made by the people. An interesting example was France in 1992 when M. Mitterrand thought his unpopular government would get a pat on the back for bringing along the nice Maastricht Treaty to the French people and make him more popular. In fact, if it wasn’t for Martinique voting Yes he would have lost on that. He started with something like 75% in support and he very very nearly lost it. Callaghan in the 1979 devolution referendums was another case where you got the bloody nose effect, but very broadly these are decisions for the people. What I don’t want to say is that political leadership is unimportant. It is simply not all-important. The press have not clocked this, in our Westminster village world, but I can assure you that that is the evidence of things.

Voters’ intuition in referendums is fed from many sources by many many cues and we must bear that in mind, but what I want to say with reference to the five tests is that these bloody noses when they do occur often occur late in the life of a government when the voters’ trust in the government has been exhausted or taken to the end. I think that is something that the government should bear in mind because they may be fighting over an option for a referendum in this parliament. Frankly it will be an unusable option. Such a referendum would be fighting uphill, late in the life of a government, domestic agenda and general election crowding in. Opposition is maximised at this point because all the people on the Labour side who are tactically opposed to this would be on our side. The eurozone merits are at their worst and have just been certificated as such by the decision we are about to get and it would be very hard to argue that there had been a material change in the assessment.

So for me what is this argument about? For five or six years, since the tests were announced, the government have been in a Catch-22 situation. They cannot campaign for the euro because the moment they do Gordon Brown sits on them. And if they don’t campaign for the euro the polls are never going to move. If the polls never move, nobody is going to call a referendum. It’s been a brutal fix for them and what I think is going on at the moment is the pro side are doing the best they can to make these five tests more flexible, to allow themselves to carry on a campaign of sorts - what I would call a pre-campaign – in the months up to the general election. Even this, I believe, will prove illusory but that is what I think is going on. It is a question of no referendum and no campaigning versus Downing Street’s no referendum and some campaigning. They are arguing for an option to campaign without Gordon Brown and the Treasury sitting on them. So that is what I think is really going on here, not whether we will get a referendum, which they would be bound to lose.

So if I could just close by saying something about the future. No referendum of this sort, where it is government-promoted, time chosen, not constitutionally bound by a date, no referendum is an island. It is absolutely conditional upon the political context in which it takes place and it has never been more true with the Convention now looming large as an over-arching issue. How this debate is conducted, whether it shifts or consolidates public opinion, will be extremely important for the euro referendum if and when the government ever get round to calling it. The decision to postpone the referendum on the euro will also mean that the Convention gets an absolutely clear run in the next year. The media focus has already moved to the Convention. The experience of the eurozone will replace the ridiculous aspirations of Peter Mandelson and others about the benefits of the eurozone, so over the next few years we are going to get more and more practical experience of the eurozone and I do not expect it to be favourable. Political balance changes, alliances might change beyond this parliament, and it is hard to see the temper of the voters this far out, but what I would say is that we will not fall into the trap of trying to fight the next battle with the last battle’s tactics.

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