How is Britain to mark the 60th anniversary of the Universal Declaration of Human Rights?

With the continued development of £12bn plans to set up a vast data silo to store information on all phone calls, emails and internet connections? Another soviet style article form Jack Straw, which tells us how the inventory of freedoms has increased under Labour? Or the issue of ID cards to foreigners by a government that knows the public don't give a damn about the rights and privacy of foreigners?

Somehow we always knew that Jacqui Smith would be at the centre of this important anniversary but you have to hand it to the government: nobody had predicted that human rights and freedom in Britain would be celebrated with the arrest and fingerprinting of an opposition MP by terror police, the search of his premises, hard drives and telephones, the taking of his DNA and the attempted intimidation of his wife, Alicia.

And no one foresaw the good fortune that Green's young daughter arrived from school to find her home swarming with police. Why is it so important to the symbolism of the affair? Because her appearance allows the police to enter her name on the Merlin database which requires them to take the details of children who come to their attention when a premises is being searched.

No action by the authorities could have better revealed the decay in the chassis of parliamentary democracy. It captures everything – the seeming politicisation of the police, the unprincipled brass neck of the home secretary, the degradation and failure of the parliamentary authorities and the growing confusion in labour between the roles of the government and state.

Jacqui Smith has been busy saying that she knew nothing of the operation before it took place and that she adhered to the principle that the police should be allowed to pursue the investigation without political interference. But then under pressure she has begun to hint of a dark interior to this scandal, a conspiracy to distort the political process. She can't have it both ways. Either she did know about the operation, in which case she should resign, or she didn't, in which case she should keep quiet on the purpose of the investigation.

My guess is that she didn't have to know about the arrest: she could rely on the anti-terror chief Bob Quick to serve the government's interests because he so desperately wants Sir Ian Blair's job. And we should not forget that the home secretary has just given the police a Christmas present of 10,000 Taser guns. Labour loves a uniform – especially one that is armed.

The arrest of Green is so grave in its implications that even Labour MPs have begun to wonder who exactly is running the show. Harriet Harman, once known as a civil libertarian, David Blunkett and Denis MacShane have all protested. Incidentally, the last time I talked to MacShane – I think it was on the subject of ID cards, which he supports – he told me that the British public wanted a strong state. But not when it interferes with MPs, it seems.

Let us hope more Labour MPs find the courage to protest at the state opening of parliament for it is only MPs who have a complete understanding of the way parliament has been undermined by Labour – the threats to committee chairmen to follow every dot and comma of the government line, the frequent and cynical use of the guillotine to cut short inconvenient discussion on the business of the house, the replacement in the post of Serjeant-at-Arms of Peter Grant Perkin by Jill Pay who allowed the arrest of Green and finally the attack on sessional orders which define MPs' rights. Conservative are at this moment investigating whether they still have the right to debate the matter of Green's arrest under the sessional orders on Wednesday.

By any standards the authority of parliament has declined since Labour came to power. There has been an aggregation of power at the centre, a politicisation of the civil service and a decline in the scrutiny and therefore of the government's accountability to the public. This has all been presided over by Michael Martin, one of the worst speakers since the war, a man distinguished by his complete failure to understand the duties and the history of his office. His head should roll but not before we know the full facts about the involvement of Sir David Normington, the permanent secretary at the Home Office.

It shows how far things have gone that the home secretary displays no understanding of the importance of what happened last week. On Friday she blithely called the objections "disreputable". It seems that it has become unacceptable even to question the use of terror police to storm into parliament and search an MP's office, breaching parliamentary privilege and the privacy all those people who have trusted Green with their confidences.

This episode should not be allowed to die. It symbolises the attack on parliament started under Tony Blair, who never had any love or understanding of the place. It is now time for parliament to reassert itself. One way to do that is to call for the impeachment of those involved. The threat alone would restore some of the power that has ebbed from parliament over the last dozen or so years.

What we should take away from the arrest of Damian Green are the following.

Terror police were used on an inquiry that involved neither threat to public safety nor a breach of the Official Secrets Act. That is the definition of function creep and it is an abuse of special tactics and powers.

The authorities are suspected of bugging MPs – the Conservatives are having their offices swept. Whether they are being bugged or not, we should note that the police seized all Damian Green's digital equipment and are busily copying his communications and contacts. If they are prepared to do this without a charge being laid then we must assume that government surveillance will one day include anyone who threatens its interests. It may already include journalists and activists who are opposed to its policies. It will certainly do so if Jacqui Smith's proposals to collect all our communications data go ahead.

And finally we should not forget that the slide in the quality of democracy and the erosion of liberty in Britain have been allowed to take place by MPs and many journalists who simply averted their gaze. As the News of the World pointed out yesterday, "This is how British liberties are destroyed. Not by a conniving, cat-stroking prime minister. But by lack of attention." If Rupert Murdoch's newspaper can see what has happening so should all Labour's friends in the liberal press who have been in a state of denial.