Arguing against the best part of 30 years of misrepresentation of the European Community/Union in the British press would call for a rather long post - and on Europe, even most of the broadsheets adopt tabloid tone and content.
The Conservative line used to be that referenda were a foreign abomination alien to the strictly parliamentary British constitutional system (though the absence of a written constitution makes any discussion of constitutional issues in the UK a rather imprecise science, traditionally left to that man of the people Lord whatever Norman St John Stevas calls himself now). It was only desperation at the trend towards European integration that pushed the Conservatives to call for referenda as a way of blocking further British involvement in the process.
I do believe that major constitutional developments should be validated by referendum. The problem is that public opinion on Europe in Britain is so warped by the distorted news reporting of the not-even-British-owned "mainstream" press that no Government would take a chance on calling a referendum on a European issue. If some British politicians are running scared and prefer to minimise what is happening in the EU, that's because they have taken turns at misrepresenting the EU for cynical advantage in national politics. Now they are paying the price and forced to sit on their hands. Likewise Blair has painted himself into a corner on the Euro.
The European 'democratic deficit' is greatly overstated. The European Parliament has been directly elected for a couple of decades now and has real power over both budgets and policy content. The other branch of the legislature, the Council, brings together the elected governments of the Member States with a voting system which is complex but designed to ensure an appropriate measure of representativeness. For an evolving polity like the EU, that's a pretty good structure which has obvious parallels to the US system, with the House representing the population directly and the Senate representing States. Now exactly whom does the democratically elected (Seems to be a mistake here? -Ed.) British House of Lords represent?