Last week brought the dramatic news that the string vest is on the verge of extinction. Asda has decided to dump it in favour of the “more metrosexual” white T-shirt.

This is, apparently, less the result of changing male tastes than female insistence. The store said the vests revealed “too much flesh when things begin to sag” which had proved “too much for many wives and girlfriends to bear”. Tesco has dropped the garment too, with a senior manager asserting: “I haven’t seen anyone wear one for a long, long time.” Another company summed up the situation thus: “It may be sad, but string vests are a relic of the 1950s and 1960s.”

Whether new Labour is to suffer the same fate as the string vest is now the underlying question in British politics. The answer depends, in large part, on two other, rather more sophisticated relics of the 1950s and 1960s, the Phillips Curve and the Robbins Report. It was the demise of the Phillips Curve, together with a rise of mass higher education following the Robbins recommendations 44 years ago, that laid the foundations for a shift in class voting. It was these – far more than his personality or character – that helped Tony Blair to attract a large slice of the middle-class vote.

It is a fair bet that Professor Alban William Housego Phillips of the University of London was not a typical string-vest fellow. Yet the core of his argument, first set out in 1958, that there was invariably a trade-off between inflation and unemployment (more of one usually meant less of the other) appeared rational for decades.

This also meant that economics was polarised along class lines, with the more affluent threatened most by inflation and the least wealthy fearful of unemployment. Politicians desperately sought a “Goldilocks solution” – one that allowed for tolerable levels of both price rises and unemployment. More often than not, they couldn’t find it. Only in the past 15 years or so have inflation and unemployment been becalmed simultaneously. And the political consequence has been that a large swath of the middle classes has embraced Labour (and the Liberal Democrats) without the sense that they are endangering their own financial interests.

The central economic dilemma of the next 12 to 18 months is whether the old trade-off has reasserted itself and what the response of the Bank of England will be if it does. The reason why the Monetary Policy Committee last week faced what most commentators labelled its closest call since its creation ten years ago is that there was evidence of continued inflationary pressures and of an imminent slowdown. The committee took a calculated risk by cutting interest rates this time – but the Bank will not have enjoyed opting to do so.

Labour will want rates to fall further and faster next year to limit the damage to consumers and reinforce its reputation for economic management. But if the Bank concludes that the menace of inflation still exists, then it will not carry on cutting. The cost of curbing inflation will be lower growth and higher unemployment. Gordon Brown’s prospects, therefore, depend on whether a long-dead New Zealand-born economist will return to haunt him and his administration.

The challenge for David Cameron in 2008 rests less on economics than on culture. The death of inflation in the 1990s was just one of two factors that encouraged vast middle-class defection from the Tories. The other was the acceptance of more liberal attitudes across a range of social issues, a development that can be traced directly to another economist, Lionel Robbins.

In 1963 Robbins proposed the rapid expansion of higher education. As a result, it has become almost the norm for middle-class children to attend university. His report also had a massive political impact. Surveys of public attitudes towards, for example, race, gender, sexuality, the virtues or otherwise of immigration, environmentalism and whether, in principle, Europe is a “good thing” or a “bad thing” reveal a middle class divided partly on generational grounds but, more starkly, by whether or not the person concerned has a degree. Universities are, crudely, factory farms for social liberalism. The result has been a large potential constituency of middle-class support for Labour and the Liberal Democrats at the expense of the Tories.

This conjunction of the end of inflation together with a surge in higher education has produced a politics here that first emerged on the East Coast of America. Political backing for the Centre-Left comes most strongly from the poorest third of the population, then the richest third, and is at its weakest in the middle. This is being demonstrated spectacularly by Senator Barack Obama in the Democratic primary contest, in which he is being supported by a coalition of upscale white and downscale black citizens.

Mr Cameron is unlikely to secure a majority in the House of Commons unless he can reconnect with this section of the middle classes. Hence his attempts to present his “modern” credentials.

Despite his efforts, many of his MPs – never mind the party at large – remain uncomfortable with contemporary Britain. This remains the principal flaw in the entire Cameron project. He has to convince much of the middle class that either the Tories have evolved or that his control over the Conservative Party is such that it does not matter whether the rest of them are traditionalists, because he will impose his metropolitan instincts on his parliamentary colleagues and the party membership.

So I think Asda may have made a mistake in restricting choice in undergarments. For the essence of the era ahead is whether Labour is condemned to the economics of the string vest and whether the Tories can learn to wear the white T-shirt.

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