The first time I had lunch with David Cameron, I noticed that he was wearing something odd. He sported a pair of European Union cufflinks. It was a striking thing to do in those days, the early 1990s. The Conservative Party was rowing constantly about the EU, and he worked as a special adviser to a Eurosceptic Cabinet minister. So naturally, I asked him about them.

I don’t think European federalists should have a monopoly on being part of Europe, he replied. And in explaining his choice of cufflinks on that day many years ago, he provided an insight into the position on Europe he has held since.

The right way to understand David Cameron’s politics is not class (the Bullingdon Club), social geography (the Notting Hill set) or ideology (wet versus dry). It is generational. Cameron belongs to, has always been the leader of, a cohort of party professionals who came to work in Conservative headquarters in the last days of Margaret Thatcher and the early days of John Major. And his politics both reflect and helped to shape the orientation and experience of that group — the Smith Square set, not the Notting Hill set.

Here are the three things you need to know about the Smith Square set when their leader gets up today, to outline his European policy after the ratification of the Lisbon treaty. First, they are properly, robustly Eurosceptic while being completely at home with membership of the EU. Second, they watched as two Prime Ministers became engulfed by the European issue, which seriously hampered their ability to do anything else. And third, they experienced defeat and policy made for opposition. Now they want victory and policy that allows them to govern successfully.

It is worth dwelling on that first point — that Mr Cameron and his close allies are proper, robust Eurosceptics. The Tory split on Europe at the beginning of the last decade was always misunderstood. The party was not split down the middle. The vast majority were on the Eurosceptic side. The row came because a relatively small, senior and ageing group at the top of the party was intent on resisting the stance that everyone else wanted to take. So in Mr Cameron’s generation almost everyone is a Eurosceptic. His position was, and remains, standard on the British centre Right.

It has been suggested that this attitude is at variance with his wish to be seen as a moderate. One critic described it as being the view of a “Euro-nutter”. For Mr Cameron, this criticism is monumentally arrogant. The Lisbon treaty is an elite power grab, foisted on the people of Europe without their consent and by the use of various deceits, of which the promise of a UK referendum is one of the greatest. He bridles at the idea that his position — the one that the majority of Britons support — is the immoderate one.

But whoever is right about moderation, one thing is clear. The Conservative Party’s Euroscepticism is Mr Cameron’s. The suggestion, for instance, that he endorsed the idea of ending the relationship with the European People’s Party only to keep the Right quiet in a leadership contest is quite wrong. It was a view that he formed while still at Central Office and he was determined to see it through, even when practical difficulties became apparent. Friends describe him as quite passionate about it.

Nor is it true, as many newspaper accounts have had it, that he has had to be egged on to be Eurosceptic by his Shadow Foreign Secretary, William Hague. Indeed, these accounts are the subject of a running joke between the two, because Mr Cameron does not need egging on by anybody.

So the group that has been working on the policy to be announced today — Mr Cameron, Mr Hague, George Osborne, the Europe spokesman Mark Francois, and the Cameron staffers Ed Llewellyn and Andy Coulson — have not had trouble agreeing with each other about what they think. But devising a course of action has been trickier.

Holding a referendum on Lisbon now that it has been ratified has never been a serious option. But for an interesting reason. Quite apart from the question of what such a vote would be about, and the very real possibility that sceptics might lose, there is Mr Cameron’s determination that Europe should not dominate his first year in office, blowing him off course as the Smith Square set saw happen to his predecessors.

This means, as Mr Osborne has being particularly strong in arguing, that the policy has to be negotiable, and not one that will turn their first encounters with other European leaders in a shambles. They are quite sanguine about what they can achieve — they point to the concessions that Václav Klaus extracted in exchange for his signature on the treaty and to their own success in damaging Tony Blair’s presidential hopes. They believe that they can put a stop to what they term “the European ratchet”. Their policy will insist upon it. But they want to avoid issuing ultimatums with immediate deadlines. There is plenty of time. And many moments where there will be leverage. Europe has to agree a new budget in 2013, for instance.

There will be a second strand. In his recently republished memoirs, Time to Declare: Second Innings, the former Foreign Secretary David Owen argues that Lisbon can be clarified and guarantees against further integration embedded in British law. Since this can be done without permission from other governments, and with a mandate at an election rather than a referendum, it has obvious attractions for the Tories.

And the final strand? The Smith Square set want to win and to govern, not oppose and moan about their defeats. So they want to set out a strong positive European agenda. There will be initiatives on things such as climate change, free trade, energy security and Iranian nuclear policy. Why, after all, should the federalists have a monopoly on initiatives? You might even call this the cufflink policy.

daniel.finkelstein@thetimes.co.uk

Times Recommends

• Strip away the figleaf and reveal naysayers
• Dave’n’George: there may be trouble ahead
• I do not accept that £64,000 a year for politicians is peanuts