The great expenses fraud is a symptom of a larger disease. We need a new constitution, with the people as sovereign

For years, those of us who yearned for a radical shakeup of our ­constitution were told we could dream on. Save it for the seminar room, the critics said: what people care about are jobs and services, not dry, academic discussions about governance. You may well be right on the merits of the arguments, the ­opponents conceded. But it's not what agitates the punters in the Dog and Duck. That's always going to be your problem, mate: no one cares.

Well, guess what. They care now.

Michael Martin the first Speaker of the House of Commons to be forced out since Sir John Trevor in 1695. It's an appropriate precedent, even if the financial scandal that sank Trevor lacked the massage chairs, plasma TVs and porn films that, indirectly, brought down Martin (Sir John took a 1,000-guinea bribe from the money men of the City). Appropriate, because Trevor was a Speaker in the age of revolution. And so – even if he, and we, have not quite realised it yet – is Martin.

It is revolution that is in the air now, as voters share a sense of revulsion that has no recent precedent. When the nation loathes not this individual or even that political party, but the entire governing class – yearning to throw out the whole rotten lot of them – then the ground begins to tremble.

That is why the expenses affair dwarfs the sleaze episiodes of the 1990s. Then the outrage focused on the Tories alone, allowing Labour to present itself as the clean, unsullied alternative. It's different now. People revile the party of Elliot Morley, Hazel Blears and Shahid Malik, with their bogus mortgage claims, flipping and home-cinema systems – but they can hardly hail the men of moats and manure in the Tory party. All they feel is contempt for the system itself.

They're right too. For the great expenses fraud is not some freak ­ailment in an otherwise healthy body politic. It is a symptom of a system that is wholly dysfunctional, diseased to its very heart.

Speaker Martin's fate was to embody several aspects of that rottenness. Its secrecy, fighting through the courts to keep expenses hidden; its profligacy, claiming £4,000 for his wife's taxi fares and spending £700,000 refurbishing Speaker's House, as well as its antiquated procedures and clubbishness.

With his departure, though, he has performed a valuable service. The fact that nothing like it has happened for more than three centuries confirms that these are indeed revolutionary times – and that radical, convention-breaking change is possible.

That does not mean simply dealing with the specific business of allowances, though of course that is necessary. People are furious about the greed displayed by the likes of Gerald Kaufman, claiming an astonishing £8,865 for a TV set and £1,262 for a gas bill that was £1,055 in credit. But the rage goes deeper than that, roused by the attitude of those exposed, a cast of mind perfectly captured by Kaufman in his bullying correspondence with clerks in the Commons fees office. "Why are you querying these expenses?" he demanded, threatening a formal complaint unless a dispute was settled by noon that day.

What the veteran MP was voicing was a sense of entitlement that captures everything wrong with our current system. It's the attitude that says, "We're in charge: who are you to challenge us?"

It is this, not the mechanics of expenses, that has to change. It will require MPs to see themselves not as masters of their own universe, who expect the taxpayer to pamper them with silk cushions and country houses as if that is their divine right – but as employees of the people who elect them.

Rhetorically, our politicians have nodded to this notion: Blair promised Labour would be "servants of the people." But now we know they never truly saw themselves that way. If they did, they would have had to undertake the revolutionary move our ancestors shied away from more than 300 years ago – and which has eluded us ever since.

It is the shift from our current system – which rests on the belief that the crown-in-parliament is sovereign – to the simpler notion that it is the people who are sovereign in their own land.

Plenty of other nations have made that move, most famously the US, whose founding document asserts that power starts with "We the people". But we never did. Instead, in Britain, power still belongs at the top – with the crown and the palace of Westminster – unless our rulers deign to "devolve" some of it outward. That's why MPs could claim hundreds of thousands of pounds of our money: on some gut level, they believed it belonged to them.

Today the Guardian launches online A New Politics, a call for a radical shakeup of our constitution, arguing for reform of everything from party funding to the role of the attorney general. But the common thread that must run through any new constitution for Britain has to be the shift from parliamentary to popular sovereignty. Once you understand that in a true democracy the people are sovereign, the next moves become obvious.

Of course the second chamber has to be elected: a sovereign people chooses who writes the laws that govern them. Of course there should be full transparency regarding MPs and their expenses: imagine employees refusing to show their boss how much of his money they had spent. Yet this is how our employees – the MPs – have behaved.

Keep applying the same logic and it all becomes pretty obvious. Of course there should be fixed parliamentary terms: it's the boss who decides when the employee's contract terminates. Yet in our system it's the other way around, with the prime minister telling us when he plans to "go to the country".

Should there be a written constitution? Naturally. If you own a house, you have a copy of the deeds; if you buy a car, you get an owner's manual explaining how it works. And we are the owners.

Attached to that document could be a full statement of our rights. Not the "Bill of Rights and Responsibilities" proposed by the two main parties, because that implies our rights are handed down by our masters, conditional on good behaviour. But fundamental rights are ours unconditionally – because we are in charge.

All the flummery and archaic language should be banished too: it shrouds parliament in a cloud of mystique, opaque to all but a select priesthood. But if it belongs to us it should be conducted in a language and a style any one of us could understand.

This is the simple rule that should be run over every part of our constitution. Right now it is shaped by the assumption that the crown, today represented by the executive, is in charge, in harness with a parliament it dominates. Any change must rest on a different premise, that the people are sovereign.

This is why Gordon Brown's statement was disappointing. Fine, as far as it went, on external regulation of expenses. But it lacked anything more than a hint of the bigger picture. Twice he made the ritual bow before "respect for parliamentary sovereignty". He doesn't yet understand that it is this very idea that lies at the heart of the problem.

In the 21st century, we can no longer accept that 646 individuals plus an unelected monarch are sovereign. Power should belong to all of us. And if that means revolution, bring it on.

This article was updated to correct an editing error on 20 May 2009