I don't support UKIP. I've never advocated leaving the EU. I don't think immigration's all that big an issue (illegal immigrants aside). There have been some pretty unsavoury internal incidents involving senior UKIP figures. Unlike the Referendum Party, I don't think they've achieved anything especially concrete other than perhaps depriving the Conservative Party of some seats and perhaps providing some very small limitation on the Conservative leadership's chasing of centrist votes.
I also don't like referendum. I don't agree with direct democracy. I believe in Parliamentary democracy, instead. I think referendums are devices that the Executive (including dictators) use to appeal over the heads of the Establishment to the People, creating the classical alliance between Monarch and Mob that Whigs like me have always opposed.
But whether I like it or not, there is going to be an EU referendum, unless the EU collapses first. Furthermore, by the time of that EU referendum the UK's membership will be irrelevant anyway, since we shall have opted out of the vast majority of what the EU does. We shan't be in the single currency, the single police force, the single foreign ministry, the single army, the single migration area. We shan't pay central EU taxes or back central EU debts. We shan't be part of the fiscal pact or the EU federation.
We would still be involved in Single Market rules, but there are two things to bear in mind about those. First, in narrowly economic terms unilateral free trade beats customs union anyway – we aren't in the EU for economic reasons (a key reason much of the Better off Out vs Britain in Europe debate entirely misses the point). The good reasons for involvement with the EU are cultural and geo-political. But if we opt out of most of what it does, then that culturo-political argument falls. Second, Single Market rules, which have over the past three decades been liberalising and aligned with British ideals will, over the next decade, in many sectors of importance to the UK (e.g. financial services) be deliberalising and poorly aligned with British ideals. That will get even worse with the establishment of the EU federation, for that will mean block voting that always carries a majority under QMV. In other words, we entered into qualified majority voting in many regulatory ares within the EU on the basis that we could win certain arguments with our friends and peers, but in the future we will always automatically be outvoted – the entire basis of our involvement in the Single Market will have changed.
I don't think this was how things needed to be, and perhaps we can still find some way to stay part of what we spent so long being part of building. But I suspect not.
A referendum, whether I like it or not, is coming – very soon; probably during the 2015 on Parliament. And there is good reason for such a referendum to include the option of the UK leaving the EU.
If we wait to announce a referendum until after the Labour Party does, we will have nothing to trade with UKIP for a pre-electoral pact. If we move first, we can do a deal. UKIP would prefer a straight in-out referendum (and I suspect that's what there will be), but might be convinced to accept a three-option referendum – "Out / Out unless this, this and this are renegotiated / In without renegotiation".
The Lib Dems are not going to go into a Coalition with us next time even if there is a hung Parliament. They will ally with Labour – they must, to maintain their equi-distant identity. If the way things have gone on the boundary review means we think we must have a pact, then the only serious votes available in the mainland UK are from UKIP. UKIP has indicated that it would consider such a pact with either Labour or Conservatives. Labour won't bother with a UKIP pact. But it could simply announce a referendum, once having one is manifestly inevitable, so as to shoot the Conservative-UKIP pact fox.
At the last General Election the Lib Dems had a commitment to an in-out referendum on EU membership, so it's not obvious that such a pact with UKIP would automatically terminate the current Coalition early – how would Lib Dem ministers justify resigning over something they had campaigned in favour of in 2010?
A referendum is inevitable now. And it is perfectly reasonable for such a referendum to include the option of leaving the EU. If we promise such a referendum in exchange for a UKIP pre-electoral pact, we could win perhaps a couple of dozen extra seats. If we're to do this, we need to move soon.