Steve Bell hit the nail on the head. His Guardian cartoon on Wednesday has David Cameron cutting his own head off while extolling the virtues of permanent austerity. The prime minister's speech to the lord mayor's banquet that the cartoonist mocked was indeed an act of bewilderingly self-destructive folly. Yet in many ways it defines the modern Conservative party.

Cameron's speech in praise of the smaller state may prove to be a seminal text in his party leadership. It crosses a line that the Tory leader has sometimes been reluctant to cross, but across which he has occasionally been tempted, especially when politically weakened or when he is not thinking clearly about his party's interests. This is such a time. I think it could mark the moment at which he loses the 2015 election.

It is important to understand what Cameron did and didn't say this week. Much of his speech was firmly and sensibly camped on the familiar centre ground of the economic argument. He said the success of the economic recovery, which received another boost on Wednesday from the Bank of England, is far from guaranteed. No argument there, given that real wages are forecast to shrink for a further 18 months. He said the UK can't pull up the drawbridge on the interconnected world economy – an important message to his Eurosceptics. He said a programme of more state spending and borrowing is a false answer – look across the Channel if you doubt the truth of that. And he said that an unquestioning embrace of globalisation is a false answer too.

So far, so fairly standard. But then he went on to the passage that matters. "We are sticking to the task. But that doesn't just mean making difficult decisions on public spending. It also means something more profound. It means building a leaner, more efficient state. We need to do more with less. Not just now, but permanently."

There is, it should be recognised, a danger about reading too much into this passage. Words are not always followed by deeds. On the other hand, Cameron has not always spoken in these terms. As the Guardian's news report on Tuesday pointed out, three years ago Cameron said that he hadn't come into politics to make cuts. They were simply forced on him by circumstances. Now, however, he is talking about something more profound and permanent. It is a big change.

Cameron has ducked and dived on this issue throughout his period as Conservative leader. When he took over, before the financial crisis, his party committed itself to match Labour's public spending plans – a commitment now brushed under the carpet in the effort to blame Labour for the economic crisis. But in autumn 2009, with the general election only a few months off, both he and George Osborne suddenly clothed themselves in a small-state identity. In his party conference speech of 2009, Cameron suddenly announced: "It is more government that got us into this mess." The word bankers never even passed his lips.

By 2010, having formed a coalition government and presided over the biggest fiscal consolidation in the postwar era, things changed again. Now Cameron was anxious to depict the spending curbs as pragmatic and temporary, rather than ideological. In his new year message for 2011 he announced: "We're tackling the deficit because we have to – not out of some ideological zeal. This is a government led by people with a practical desire to sort out this country's problems, not by ideology."

That claim is hard to sustain in the light of what Cameron said this week. If words mean anything, Cameron's speech this week was a promise that, if re-elected, a Conservative government will continue to cut the state throughout its next period in office. On one reading of what he said, the job is only a third done. That's a lot of cuts still to come – more than have been imposed thus far since 2010 – and given the shape of the public spending budget and the relative fragility of the recovery, that means further large cuts in welfare and health in particular in the years up to, and maybe even beyond, 2020.

Now, it is important to say that this is not necessarily a wrong policy in principle. No modern political party in this country has a very clear answer to the question of what size the state should be. There is undoubtedly an arguable case for what Cameron this week called "a leaner, more efficient and more affordable state". Who, after all, seriously wants to have the opposite: a state that is fatter, less efficient and less affordable? Not me. The right size and the agreed functions of the modern state are some of those tough questions that democracies, as David Runciman argues, aren't very good at answering with clarity.

But Cameron's policy is certainly wrong in political practice. That's because, put simply, not enough people trust the Tories to cut the state fairly. This week's polls provide a lot of evidence for the view that the Tories have not made the sale for a smaller state. It's why, in this week's Guardian/ICM poll, in spite of some encouraging economic numbers, the Conservatives remain on only 30%. It's why, in another recent poll, only 28% think that what the Tories stand for "is broadly the kind of society I want". You don't win elections with 28s and 30s.

Other than generally restoring the party's electoral fortunes, the Cameron-era Conservatives have never been particularly clear or consistent about whether they have a national project or how they intend to win support for it. This lack of trust in their intentions remains their achilles heel.

Still too beguiled by the Thatcher era and arrogantly inattentive to their enduring unpopularity outside southern England, the Conservatives simply do not give enough attention to constructing a project for a majority. They never seriously ask themselves what might persuade the 72% who don't want the kind of society the Tories stand for to change their minds. It certainly won't be the speech that Cameron gave this week, that's for sure.