Mo Mowlam: Let the people decide their destiny, Mr Blair

There may be a reduction in national sovereignty - but not necessarily the people's sovereignty

Soon Britain is going to have to make the difficult decision about where best our political and economic interests lie. The Cabinet and Parliament should have a full discussion of the issue. Such a decision cannot be left in the hands of one politician, no matter how powerful. But the crucial decisions, on the euro and the new constitution that Valéry Giscard d'Estaing is working on, must rest with the British people. And that means referendums on both the euro and these new constitutional arrangements.

In my view, that would be best be done by holding the referendums on both these momentous questions together, with two questions on the ballot paper. It should also be done quickly. No longer can the Government ignore the views of the British people. Let us remember the pain in Britain prior to the Iraq war, when we had a Prime Minister dragging an unwilling majority of people into a war they did not want. That must not happen again over Europe. We need a clear view from the British people of whether we want to remain a part of Europe or not.

So far the debate about Europe has been unreal, and hysterical. This is deeply unhelpful when we should be talking about where Britain is going to find itself in the first half of the 21st century. Yet the euro seems to be more about competing views in No 10 and the Treasury; sadly, more politics of the personal leading to uncertainty and an absence of intelligent debate involving the people.

The new constitutional arrangements are either ignored by the government, or downplayed, or used for cheap spin about how the Government is not going to allow the word "federal" to be used, or at least not too much. Meanwhile, the anti-European press is whipping up a storm about how the wicked French, in the guise of M. Giscard, are going to rob we British of our sovereignty, our way of life and a thousand years of history. Not, in fact, so different from those childish insults emanating from No 10 and the Foreign Office in the run-up to the Iraq War, when France wouldn't play ball with Blair's face-saving second UN resolution.

The pro-European camp has also been mustering its forces. Britain in Europe has organised 330 economists to express their belief that the five economic tests have been met and that Gordon Brown should advise accordingly. And these were not minor figures; they included Paul Volcker, the former head of the the US central bank, and Stanley Fischer, a former IMF managing director.

I think it is fair to say that the situation is getting serious, and we in Britain need to start taking it seriously. Just as British entry into the euro needs urgently to be put to the people, I also believe that the new constitutional arrangements need a full public debate. In fact, I believe that these arrangements are going to be just as constitutionally important as the euro, and therefore a referendum on them should take place.

Of course, such a referendum would have even greater consequences than one on the euro. If the British people say no to joining the euro, that will not mean that Britain will have to leave the EU. We will be able to muddle along in a halfway house that some might call bridging the Atlantic and others may characterise as a typical British fudge. A referendum on the constitution would be far more significant. If the British people voted no, we would have to leave the EU, just as we would have had to if the voters had voted no in the 1975 referendum.

True, we did not have a referendum on the Maastricht Treaty, but we did get the promise of one on its most important element, the euro. It is not possible to have an opt-out from a constitution. The rules of how the European Union is run will be the rules. The UK will either have to accept them or not. One can see why the government is downplaying the importance of what is going on; but whatever happens in these changes, the power of the nation state must be diminished. Some form of qualified majority voting is going to have to be introduced, some reform of the commission will also diminish the power of the bigger countries. It is even possible that there may be more democratic accountability. And this is the crucial point; there may be a reduction in national sovereignty – but not necessarily in the people's sovereignty.

I believe it is time that the British people confront their destiny. I would like to see a date set for when we shall decide on both the constitution and whether we join the euro. Both issues are inextricably linked, and people can make a fair decision on monetary union only if they can see it in its full political and constitutional context and have a chance to vote on it. A twin referendum on these great issues is the most democratic as well as the neatest solution.

The choice is as stark as that. Enlargement means that cosy bilateral deals will no longer be possible. Europe will have to be governed by consistent and coherent rules. Not one rule for Britain and another for the others.

By combining the euro referendum and a referendum on the new constitution, it will be possible to have a full and honest debate about Britain's future; the Euroenthusiasts as well as the Euro-sceptics should welcome this opportunity to decide our place in the world.

The writer served in the Cabinet from 1997 to 2001