To What Extent is Britain a Liberal Democracy?

There are lots of threads about America and how there are flaws in the American system, but what about Britain? Fine, "Blair is a lap dog of Bush" is a rightful opinion, but a part from the government at the moment - are there fundamental flaws in the system? I just want to hear your opinions.

To start this off, I can think of a major flaw - the open competition/choice of Parties does not work. Because we all know that Respect or Green is NEVER going to get in power. Even the Liberal Democrats hasn't got much of a chance. It's like it's a two party competition in America (Democrats and Republicans), it's the same in Britain - Labour and Conservative. And people were afraid to vote for the Liberal Democrats because they fear that the Conservatives may get in by "tactical voting". And the British government is actually supported by only 30% of the population - who votes.

So that's one of the problems. Can anyone think of anything else?