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Why Labour looks set to become the referendum party

Labour has been in talks with the Government to find a way forward. Credit: PA

On a noisy night, what stood out for me was Labour's shadow chancellor John McDonnell volunteered to me, on my show - without me needing to ask - a commitment by the PM to hold a so-called "confirmatory" referendum on any Brexit deal could be a way of "entrenching" whatever Brexit entente Labour and the Government can reach.

It felt like a straw in the gale blowing from Brussels. So I talked to a number of his colleagues - including those sceptical about a people's vote - and it is clear to me Labour is close to upgrading the referendum idea from option to formal first-choice policy.

Which doesn't mean Labour's shadow cabinet is yet foursquare behind it: there are probably ten of Jeremy Corbyn's most senior colleagues who, like him, have doubts about whether Labour should become the referendum party.

John McDonnell was concerned a Brexit deal could be scrapped by a new Tory leader. Credit: ITV Peston

But I am told enough of the referendum doubters are close to folding, partly because the advantages of Labour rebranding as the people's vote vanguard in the forthcoming European parliamentary and council elections would be very significant.

Labour would pick up the votes of almost all of the 48% who voted to remain in 2016, while the Tories would face a humiliating wipe out, with so much of the leave vote likely to gravitate to Farage's new Brexit party and to a somewhat resurgent UKIP.

According to senior Labour figures, what might clinch the deal for McDonnell, Thornberry, Starmer and Abbott, the leading proponents of a referendum, would be a decision by the shadow Cabinet to follow the approach of Harold Wilson's Labour Party in the 1975 referendum: namely for Corbyn himself to largely stand back from the campaign, and to allow any Labour MP or shadow minister to campaign for remain or leave, according to conscience.

It now looks like the UK will leave the EU in October, but this may happen earlier. Credit: PA

That would lessen the concern of some Labour MPs in leave-voting constituencies that support for a referendum would betray their constituents.

There is of course an important corollary of such a shift by Labour to unambiguously champion a referendum - which is the failure probability of Brexit compromise talks between Government and Labour would rise from 99% to 100%.

As several Cabinet ministers have told me, even a Theresa May newly emboldened to ignore the Brexiter critics in her own party would baulk at underwriting a people's vote.

All that said, there may be a small number of weeks to run before this particular chapter in the Brexit potboiler reaches its denouement.

Theresa May has managed to negotiate an extension of Brexit until 31 October. Credit: PA

Negotiations between May's mandated ministers and Corbyn's team will grind on to the expected impasse. And then the PM will attempt to persuade Corbyn that if she oversees her own indicative votes by MPs on Brexit options agreed with him, he would pledge to give his party's support to the winner.

I assume Corbyn would politely rebuff what he would see as a Trojan horse for her deal.

At which point the European elections will be in full fearsome view, with Labour smelling irresistible triumph if it comes off its Brexit fence, and Tory MPs staring into the abyss of oblivion if they continue to sit on May's fence.