Look, David Cameron - when capitalism's done properly it's wildly popular It had actually collapsed several years ago; the difference is that the Tory leadership is only noticing now. In the middle of the last decade, a political car crash left all three parties mangled together, with policies strewn everywhere. Tories were relaxed about the state spending that was to go on to bankrupt the country, and applauded the green taxes that have made energy so painfully expensive. Now, things are far clearer. Ed Miliband is midway through an ideological purge and anyone suspected of Blairite sympathies has been cleared out or demoted. His Leftwards lurch gives the Tories an opportunity to spring-clean their own intellectual inventory. The compromises with a failed Labour agenda can be identified and discarded. Lessons can be drawn from three years in power. In almost every Government department, radicalism has paid off and hesitancy has not. This has several implications, especially for George Osborne as he prepares for a mini-budget. For the first time, the Chancellor will have good news to impart: tax receipts are coming in twice as fast as expected, factory orders are at their highest for 20 years and more people are working than ever before. So why not use the extra money to cut taxes - and, in so doing, spur the recovery and help the cost of living? In the past, Osborne has felt himself hostage to the Labour thinking: that tax cuts would somehow promote instability rather than recovery. But that was the old theory. The actual trajectory of the recovery, in Britain and abroad, suggests differently. Ironically, it is Barack Obama who is proving that cuts need not harm the economy. US government spending has been falling at a rate not seen since the end of the Korean war. Rather than crash, the American economy is recovering fast and its deficit is - remarkably - under control. In Sweden, the conservative-led coalition has just issued a fifth round of tax cuts. Its response to the crash was a permanent tax cut for the low-paid, which boosted employment so much that the policy paid for itself. Hard economic experience suggests that Osborne need not be so wary of greater savings, or tax cuts. They may not work in Keynesian theory, but they do seem to work in practice. In theory, people should be outraged at cutting benefits for some of the poorest people in the country. In practice, it's the most popular reform the Government has carried out because even Labour voters know it's the only way to end the poverty trap. In theory, selling the Royal Mail would be hugely controversial, a privatisation which even the Thatcher government did not attempt. In practice, Britain is a country that prefers shopping to politics and regards the post as a service, like any other. If the parcels arrive on time, we're happy. Last night, it was decided that those who applied for more than £10,000 of Royal Mail shares will get nothing, and all those who applied for £750 will be fully satisfied. A brilliant idea, which embodies popular capitalism - an offer aimed for the many, not just a handful of merchant banks. Protests about Royal Mail's sell-off are now almost inaudible - a reminder that the British public is moving to the Right, just at the time when Miliband is moving Labour to the Left. Cameron's next step should be to look at the green taxes which are so unfairly woven into our bills, which cost the average household £112 a year. Energy companies with fewer than 250,000 customers are already exempted from such taxes, and I gather ministers are considering doubling this to 500,000 to encourage greater competition. "The remedy to the big six is making them a small six," says one minister. Or Cameron could scrap the taxes entirely. Miliband may freeze your bills, he could say, but they'll rise later. Tories will cut them, by cutting green taxes, and keep them down. One Marx quotation does spring to mind when considering Miliband's energy policy. In the 1933 political satire Duck Soup, Groucho's character is made president and promises to address the cost of living. "If you think you're paying too much now," he says, "just wait till I get through." This line comes to mind when considering Ed Miliband's energy proposals. In the same film, Chico Marx has a line that Mr Cameron ought to consider: "Who are you going to believe - me, or your own eyes?" The Prime Minister's eyes should tell him that cuts have none of the consequences Labour predicted, that capitalism, done properly, is wildly popular - and that radical conservatism, where applied, works best of all. Twitter: @FraserNelson