What’s frustrating about our slide into a police state is that most people haven’t even noticed it, while the rest have actually welcomed it. Sure, 9/11 and the London bombings leave no doubt that terrorism is a real threat. But then the sweeping powers we’ve given our police and politicians to deal with it are an even bigger one.

Ordinary, upright citizens are now spied on, stopped and searched, arrested at gunpoint, DNA-swabbed and criminalised, for no good reason other than that some officer of the state has the power to do it, and is incentivised to do it.

The ink was hardly dry on the Terrorism Act 2000 before it was used to arrest Dundonian Sally Cameron, 34. Her crime wasn’t some conspiracy to blow up Dundee; it was daring to walk along a cycle path. Two squad cars roared up on her and she was carted off to the cells.

Then octogenarian Walter Wolfgang, who had escaped the Nazis and become a Labour activist in Britain, was arrested under the same law for merely heckling Jack Straw at a Labour party conference. That’s the Jack Straw who wrote last week that his party had extended freedoms, not curtailed them.

Really? The Terrorism Act allowed the government to designate areas where the police could stop and search suspects at will. Fine, you might think, if they see people acting suspiciously outside nuclear power stations. But no. Ministers instantly declared the whole of London a stop-and-search area. Now thousands of law-abiding folk are stopped and questioned each year – even a cricketer who was asked to explain why he was carrying a bat, and an 11-year-old girl, stopped and told to empty her pockets.

Another octogenarian, John Catt, was picked up by the cameras that monitor every car going through the City. He was on police files because they’d nabbed him once before – outside the same Labour conference – for wearing a T-shirt saying George W Bush and Tony Blair were war criminals. Could be offensive, they said.

Charlotte Denis, 20, was arrested at a game fair on the same charge. Her “crime” was to wear a “Bollocks to Blair” T-shirt. She refused to remove it, having only a bra underneath, so was nicked.

Researching a book, The Rotten State of Britain, I struggled to work out how we had got into a state that makes criminals of us all. It’s not that politicians want to control our every move. Rather, they demand wide powers to deal with crime, believing they will use these appropriately. But give people power and they use it.

Particularly when they are incentivised to use it. Police commanders can get up to £15,000 in performance bonuses, depending partly on how many people they spot-fine, charge or caution. Officers have monthly targets; they do not want to prevent crime but to make criminals of us.

It’s much easier to pin a criminal record on someone like bus driver Gareth Corkhill for overfilling his wheelie bin, than it is to catch terrorists. And yes, local councils use antiterrorist powers to snoop on us, even for overfilling our bin.

A decade ago the police could arrest us only for serious crimes. Now they can arrest us for anything. Swinton man Keith Hirst, 54, was accused of dropping an apple core, refused to pay a spot fine – you can be fined by police and 1,400 other officials without any legal process – and got cuffed and held for 18 hours in the cells.

You’re not even safe in your home. In the past 12 years, officials have been given 550 powers to enter your house: to check if your pot plants have pests, your hedge is too high, confiscate your fridge if it doesn’t have the right energy rating, and yes, photograph and seize your rubbish. Resist, and it’s a £5,000 fine. Your name, address, and even your DNA will be put on the police database. Even if you’re cleared, you’ll have a fight to get it off. That’s why our DNA database is the world’s biggest.

We’ve done the terrorists’ work for them and surrendered our freedoms. But at least there’s now a debate, like this weekend’s Convention on Modern Liberty. The former MI5 chief Dame Stella Rimington says we now have more to fear from our police state than from terrorism. The information commissioner Richard Thomas complained that the surveillance state was making suspects of us all.

What’s to be done? We need leaders farsighted enough to place limits on their own power. They must revive the independence of parliament, the civil service, the courts, the press and local government as constitutional safeguards against central control.

We need locally elected police chiefs, paid to cut crime rather than harass innocent people; councils that decide and pay for their own priorities, rather than Whitehall’s; the scrapping of spot fines and random searches; and human rights law in favour of due process, with trial by jury, presumption of innocence, habeas corpus and the other ancient rights that protected us from the arbitrary power of our leaders.Then we’d have some hope of making the state our servant again, rather than our master.

Eamonn Butler’s book The Rotten State of Britain is published in March