Labour have been deeply divided over the EU for many years. In Labour older MPs and more socialist ones are anti the EU. The younger ones tend to be more Euro friendly. It is the opposite of the Conservatives, where the Ken Clarke generation contains a few Euro enthusiasts, but more recent generations are Eurosceptic.
Labour sees that it is losing some of its votes to UKIP over the EU and migration matters. It sees that the Conservatives are more in tune with the mood of the country by offering a referendum and seeking Parliamentary support for one. Some in Labour are suggesting that their party propose an early In/Out referendum. It could be before or at the time of the 2015 election, or shortly afterwards should Labour win.
There is no doubt that the Labour high command want to stay in the EU. They were a pro EU party for 13 years in government. They gave away 138 vetoes when in office, and have remained pro transfers of power and new European laws in the last three years of opposition. The only reason the leadership would even think of holding a referendum is if they thought they could win it for staying in the EU. Lord Mandelson has already warned them this could prove difficult.
Indeed, if Labour got into government and then held a referendum which they lost, the government would be effectively ended. A pro EU government, wedded to the idea of ever closer union and reliance on the EU for much of our law and administration, would be bereft of its main purpose and have no working plan to turn the UK into a self governing democracy again. One of the things former Labour Ministers and many Labour MPs like about the EU is the EU decides for us and stops UK people preventing new laws and new government obligations which the EU manufactures in profusion.
For this reason Labour may well continue to decide that a referendum is too big a risk. They may also see that a pro EU party offering a referendum is a poisoned chalice to the majority of British voters who either want out of the EU altogether or want a new relationship based on trade and co-operation rather than full Treaty based government. Labour would not be seeking to negotiate a new relationship. They would be using the full force of government to spin and argue that the UK must stay in the EU. Eurosceptics would fear that with the weight of government spin behind the pro case it would be more difficult to get the change we want.
Of course if Labour came out for a referendum Eurosceptics would welcome it. It helps build momentum. It would not, however, be a reason for people to vote Labour if they are Eurosceptics, as they would understandably fear any referendum under a Labour government would be posed to seek the answer Yes to staying in. An earlier referendum would of course be more attractive as an option.