The previous verse makes it clear that he's speaking about the followers of Jesus. In this verse, "Which in time past were not a people" rules out the Jewish (by virtue of their ethnicity) people from times past. Also, in Exodus 19:5,6, God says to the children of Israel, "IF ye will obey my voice indeed, and keep my covenant, THEN ye shall be a peculiar treasure unto me above all people: for all the earth is mine: And ye shall be unto me a kingdom of priests, and an holy nation..." It stands to reason that IF the Jewish (by virtue of their ethnicity) people don't, THEN God won't.