Cameron's economic plans are an Etonian lesson for us all

JOLLY voting weather... How many Etonians does it take to liquidate the Tory Party? Fifteen: one to utter consensual inanities and 14 to orchestrate the fatuous applause. If you want an explanation why the Conservatives have gone cold on tax cuts, you must look beyond political timidity and consider more significant sociological factors.

There are now 15 Etonians on the Tory front bench, a phenomenon which signals unmistakably that the great retreat has begun. In 1964, in a famous Spectator article, Iain Macleod denounced the Tory "magic circle" that had excluded Rab Butler from the leadership. "Eight of the nine men mentioned in the last sentence went to Eton," he wrote, after naming the guilty parties.

Thereafter, the Etonian influence declined. It had ensured that no post-War Conservative government reversed any socialist measures. Coming from a background of public service in the army, law or established Church, its acolytes had a symbiotic relationship with Bevanite state control. That is the genius of Etonians: no one manages decline with a better grace.

Hence the sudden demonisation of tax cuts in the Cameronian Tory Party. At a conference organised by the Adam Smith Institute 20 years ago, the Anglo-American commentator Tom Bethell, lamenting the failure even of Margaret Thatcher's party to implement supply-side fiscal policies, observed: "There may be a kind of subconscious Tory class interest in the maintenance of the present tax structure." He added: "High marginal tax rates tend to prevent upward mobility. They prevent the rotation of élites."

It should be stressed Bethell was postulating a subconscious instinct, not a conscious conspiracy; but his theory looks even more convincing today. Last week saw a very ominous development for our country: the surrender of the Conservative Party to fiscal illiteracy, in the interests of electoral appeal. The great fallacy of the Cameron thesis is to regard tax cuts as some kind of plum - a prize we award ourselves for running the economy successfully.

On the contrary, they are the mechanism for securing that economic success. In that context, Cameron's self-denying ordinance on tax reduction is comparable to an invalid refusing to take medicine until he has recovered from his illness. The supply-side argument has been won beyond contention. As far back as John F Kennedy the case for tax cuts was recognised in the White House, although the term "supply side" did not come into use until 1976.

The 1964 US tax cuts, of around 20%, led to the top 5% of taxpayers paying 7.7% more, while the bottom 50% paid 9.2% less and revenue flowed in. George W Bush's most recent tax cuts in 2003 produced an extra $89bn in revenue last year and a projected $123bn extra this year. Dubya has been spending like a maniac: that is far from commendable, but it does annihilate the delusion that tax cuts mean corresponding reductions in public services.

Look at Ireland. After a climactic economic crisis in 1986, the Republic slashed state spending and followed up with tax cuts, including reducing corporate tax from 50% to 12.5%. In subsequent years, Irish unemployment fell from 17% to 5%. By 2002 the EU, stern guardian of the rights of state profligacy, had become seriously alarmed by Ireland's fiscal self-discipline. Pedro Solbea, EU commissioner for economic and monetary affairs, warned: "The Irish government has to face the problem of an excess of success."

Could anyone invent such a statement? There is no fear of a future Cameron government facing the problem of an excess of success. The Heir of Blair himself pledged last week that "pie-in-the-sky tax cuts are not substance, not what we stand for". So, what do the HOB and his attendant Hobbits - Osborne, Letwin et al - stand for?

The most shameful aspect of this posture is its dishonesty. It is beyond peradventure that all three men know, intellectually, that the supply-side thesis is correct and that tax cuts would hugely benefit the country. Yet they lack the courage to tell the nation so. Of course they would be overwhelmed, for the first six months or a year, with Labour disinformation and panic-mongering about public services; but the Tories have until 2009 - possibly 2010, if Gordon Brown's obsessive caution prevails - to educate the electorate.

Do they really despair of convincing British voters of facts already acknowledged by such diverse elements as Australian Labour administrations, Irish computer manufacturers and redneck truck drivers in Alabama? In fact, the Etonian clique prefers the less demanding, hug-a-hoodie agenda of deference to the dependency culture while suppressing Tory dissidents.

It is the political extension of the Etonians' patronising conduct that administers a damn-your-eyes put-down to a social equal, while grovelling sycophantically to the surly slattern whose inexpensive employment has facilitated some domestic entertainment ("Mrs Scumbogg has been utterly brilliant!" "Absolutely! Mrs Scumbogg - you're a star!").

The Etonian mentality is a stranger to shame or scruple. Even Blair would have hesitated to stand in front of a soft-focus, environmentally friendly oak tree emblem while proclaiming his intent to cover greenfield sites with convenience housing. Or to laud marriage by equating it with the latest subversion of that institution, civil partnerships. This melding of thesis and antithesis was not Marxian, but Orwellian.

There is a palpable fear beginning to manifest itself in the Labour camp. The Establishment has risen from the grave to confront the débris of the New Labour juggernaut with a force even more unscrupulous and ruthless than itself. The bad news for the Tory Party is that these Widmerpools and 1688 revenants are adept at securing power, but notoriously incompetent in exercising it. Floreat Etona: nobody else will.