Kenneth Clarke, the Chancellor, is insisting that any pay rises in the public sector can only come from increased productivity. In teaching that mainly translates into larger classes. However, the decision not to fully fund last year's pay increase for teachers was a public relations disaster the Government repeats at its peril in the crucial months that will define the election battleground.
Polling evidence suggests the electorate has little faith in the Government's ability to improve education. The Harris poll commissioned by the Association of Teachers and Lecturers found only 20 per cent of voters believed the Tories would be the best party for raising the quality of education.
There was almost a hint of desperation from William Waldegrave, Chief Secretary to the Treasury, tackled by Sir David Frost in a BBC interview on Sunday on the specific question of education funding. He said: "We will look at her (Mrs Shephard's) programme and the high priority that attaches to the schools programme and to the whole of education and training budget which are high priorities for us," before lamely adding: "So if she's got a strong case we'll listen to it, but we need to find the money."
The problem with exempting the country's 400,000 teachers from a tough pay round is that such a move will encourage other groups such as health workers to press their case for special treatment.
Within the Cabinet, Mrs Shephard could have an uphill task in persuading the colleagues that local authorities cannot be left to fund any shortfall in Government funds to cover an award from the pay review body. Earlier this year, Mrs Shephard was citing a speech by John Major to the Conservative Central Council in which he stressed the importance of education as evidence that he supported extra funds for schools. These days, however, Mr Major is more certain than his minister that the key factor in improving standards lies in encouraging schools to become grant maintained.
The policy split between the two, sharply defined in last week's leaked memo, has to be at least papered over by the time of the Conservative party conference in two weeks' time. The conference will be carefully stage-managed in order to create an impression that the Conservatives remain a party of radical ideas. Mrs Shephard will be expected to produce initiatives with voter appeal. At the very least, she will have to sound convincing on the benefits of nursery vouchers.
While Labour has been able to exploit the differences between the Prime Minister and his education and employment secretary, there could be a reversal of fortunes when delegates arrive for its party conference in Brighton. The theme running through the resolutions submitted for the education debate is opposition to grant-maintained schools. Although most of them pre-date Labour's revised policy that proposes the creation of foundation schools, there is a widely-held view that Labour's plans could lead to two tiers of schools.
The question of resources for education is just as much a problem for Labour. It worked hard to eradicate its image as the high taxation party and is not about to make any rash promises on higher funding.
The politics of gathering in the votes of middle England is about to overwhelm all sensible debate on education policy.