AT political Cabinet on Tuesday, ministers were shown polling that neatly highlights the Tory dilemma.

When voters are asked what is the most important issue facing the country, they reply Brexit and the NHS.

The Tories understand that voters, who are most worried about the cost of living, won’t thank politicians who hike their taxes

But when they are asked what the most pressing issue is for them, they say the cost of living. And what’s the most popular Tory policy since the election? The stamp duty cut for first-time buyers.

The political implications of all this is clear: Voters, who are most worried about the cost of living, won’t thank politicians who hike their taxes.

Several of the Cabinet ministers present on Tuesday have told me they believe this worry over the cost of living means any tax rise, even one explicitly designed to allow more spending on the health service, won’t wash with the public.

It is also hard to see how any tax increase could get through the Commons.

When voters are asked what is the most important issue facing the country, they reply Brexit and the NHS Credit: PA:Press Association

When the Tory whips canvassed their MPs about a tax rise to pay for extra NHS spending, they weren’t met with a positive response.

“You can’t get a tax increase through this parliament,” is how one Cabinet Minister sums up the situation.

So if tax rises are off the table, should the Tories just continue with austerity, holding down spending?

Well, this is an unattractive option too. All the easy cuts have already been made and in nearly every area the pressure is for more money.

Home Secretary Sajid Javid requires more resources for the police Credit: PA:Press Association

If the health service doesn’t get the expected three per cent a year increase for the next few years, the winter crisis will become an all-year phenomenon — and there would be no better backdrop for Labour in an election than an NHS in crisis.

It is not just the health service where the public are keen on more money. Tory MPs think that public concern over schools funding cost them more seats at the last election than the NHS.

While if Britain is to continue to play a role on the world stage, it will have to spend more on defence.

Dealing with the current surge in violent crime may well also require, as Home Secretary Sajid Javid acknowledged this week, more resources for the police.

Chancellor Philip Hammond thinks that deficit spending is, inherently, unsustainable Credit: Getty - Pool

There is also the problem that, as one Cabinet minister puts it: “You can’t fight another election on deficit reduction, voters are bored of it.”

So, what’s the answer? Many ministers think it is obvious: Let the deficit take the strain. One tells me: “It is time for politics to re-enter the Treasury.”

But those around Chancellor Philip Hammond have little time for this argument. They think that deficit spending is, inherently, unsustainable. They also worry about going into Brexit with the deficit rising.

No10’s position is less clear. Mrs May has always been relatively hawkish fiscally. But her powerful chief of staff Gavin Barwell is, as one insider puts it, “definitely on the wet side of May” and more keen on spending increases.

May's chief of staff Gavin Barwell is more keen on spending increases Credit: Getty Images - Getty

There is no easy solution to this Tory dilemma. But what is being overlooked is how growth could help them out.

If the Tories went, for instance, for big-bang planning reform they could give the economy a real boost: Making it easier for

them to spend more and still balance the books.

Last resort THE Government’s strategy for defeating all the Lords amendments to the EU withdrawal bill now depends on pressuring Labour MPs representing big Leave- voting seats to abstain. That’s why the Tories have started a new Respect The Result campaign this week, which is designed to turn up the heat on these Labour MPs. It is far from certain that this campaign will work, but it shows how few options the Government has as it tries to win these crunch votes.

Log jam to be given a huge push

THE Brexit negotiations are not in a good place. In Brussels this week there have been no discussions at all on the so-called “backstop” to deal with the Irish border question.

If this issue isn’t resolved ahead of the EU Council next month, then the talks will be plunged into their gravest crisis yet.

Theresa May's Brexit agreement could be vetoed over the so-called 'backstop' to deal with the Irish border question Credit: EPA

At the same time, the British side is fuming over how the EU’s negotiators are treating them over the Galileo satellite programme.

They feel Britain has made clear that its commitment to European security is unconditional, only to find the door slammed in its face.

There is also another problem, as one senior Government insider admits.

If the Government is accusing the EU of behaving in bad faith over Galileo, it is much more difficult to turn around to Parliament and say we must pay the £39billion divorce bill and trust the EU to act in good faith when it comes to the trade negotiations.

The government are fuming over how the EU’s negotiators are treating them over the Galileo satellite programme Credit: PA:Press Association

All of this is increasing the chances of an accidental no deal.

Theresa May would come back to Parliament with a deal in the Autumn.

Labour and the other opposition parties would vote against it – because the deal won’t be great and that’s what opposition do – but enough Tories would think it isn’t worth £39billion and do the same.

The result: Mrs May’s agreement is voted down and the UK is set to leave without a deal but without the Government having made adequate preparations.

Theresa May’s Brexit customs partnership plan all-but dead after Michael Gove savages it

Something is needed to break this negotiating log jam. Inside Government they hope their Brexit white paper, set to be published in mid-June, could start to do that.

It will set out in far more detail than before what kind of relationship with the EU the UK wants. It will be accompanied by a major diplomatic push to get European governments to engage with the idea.

If the Brexit negotiations are to deliver a decent outcome, this push must succeed.

Who will hold the Tory fort for Davidson? SENIOR Westminster backers of Ruth Davidson, the Scottish Tory leader, fear she will miss out on the next Tory leadership contest – and are now contemplating supporting a stopgap candidate to keep the seat warm for her. Davidson is adamant she will fight the Scottish parliament elections in 2021, precluding any move to Westminster before then. But several Davidson admirers now think that Theresa May’s premier-ship won’t last until then. So their minds are turning to who might be their stopgap candidate, someone prepared to hold the fort until Davidson can come to London. The most talked-about name for this role is Michael Gove. But other Tories are dismissive of this idea. They think it isn’t practical as no one would agree to be PM for only two years. Equally, the deal couldn’t be explicit as that would destroy Davidson’s campaign to be First Minister of Scotland. Davidson, though, remains the only Tory with game-changing numbers. So the chatter about how to get her into No10 before the next election will continue.

U.S. puts house on new deal

Trump’s thinking is that if Kim Jong-un wants to come back to the table, he’ll now have to do it on the US’s terms Credit: AFP or licensors

WHY did Donald Trump pull the plug on his summit with Kim Jong-un? Because the North Koreans were engaging less and less.

Trump’s thinking is that if Jong-un wants to come back to the table, he’ll now have to do it on the US’s terms.

Trump’s aim is to exploit the difference between bid and offer.

But it remains to be seen if what works in real estate works in diplomacy.

US President Donald Trump speaks after announcing cancellation of Singapore summit with North Korean leader Kim Jong-un