This is how history was distorted in Pakistan in General Zia’s brutal dictatorship. The quote here has taken a life of its own; it has even made it to textbooks. Here is the problem:
1. Jinnah was not even in Peshawar on the said date. He was in Karachi on 13 January 1948.
2. Jinnah did not refer to Pakistan as an Islamic laboratory.
3. He spoke at Islamia College Peshawar on 14 April 1948 and the said speech which is part of Jinnah papers contains no such reference.
This is not to say Jinnah did not refer to Islam but it was always that Islam was compatible with modern democracy and human rights.