revolution, on al jazeera. >> public anger is growing in the u.k. hundreds of thousands of people have participated in wage strikes. the prime minister has described the industrial action as a political battle. how will his government deal with the growing dissatisfaction? this is "inside story." ♪ hello there and welcome to the program. i'm laura kyle. they were the biggest strikes in

the united kingdom in more than a decade, and unions worn more could follow. more than 500,000 workers, teachers, civil servants, bus and train drivers, walked off the job in england and wales. they are demanding salary increases in line with the rising cost of living, but the government says it cannot afford it. >> smiling through the cold, normally she and her colleagues at the school for people with special needs would be inside. they want a pay rise that meets the rising cost of living and keeps people in the profession. >> i've actually worked two jobs for five years now to be able to put fuel in my car so that i can actually get to work. even friends of mine who have been teachers for 2, 3 years, decided it is not for them because they genuinely cannot bear the stress and the overload

and the workload that they are expected to do. >> thousands of teachers and their families marched in london on wednesday. many stressed pay rises should be higher than the 5% offered last year and be paid for by the government, not come from already stretched school governments. >> what you're doing is taking away from students to pay teachers. >> my mom is a teacher. she works so much more than she has to, and they are doing so much more than they are required to. >> these teachers are making sure their demands are heard on what is clearly a sizable demonstration here in london. there's also a wave of industrial action taken in various parts of the economy, all calling on the government for pay rises to meet inflation. the government insists it is bound by the recommendations of

the pay review body, even though it is constrained by the financial remit it was given. >> they recommend 5% for experienced teachers and 8.9% for new teachers. there's also progression pay, so 40% of classroom teachers will actually be getting pay rises up to 15.9% this year. >> for the national education union, that is far from good enough. they accused ministers of refusing meaningful talks. >> they've got to dial down the rhetoric, dial down the antiunion tone. they've got to get into a room with time and resources to work it out. >> at the moment, there's not enough on the table? >> no. and they delayed. they did not publish their efforts until friday. >> the next education strike is due at the end of the month. if there's no movement on pay, we are likely to be seeing more

protests, from workers in other key professions who at least until now enjoy broad support from the public. >> another problem is that britain is the only g-7 economy set to decline this year. the international monetary fund says it will contract by 0.6%, worse than the forecast for russia. inflation in the u.k. has hit a 40-year high, and families say they are still struggling to make ends meet. good and energy prices are soaring. one study shows higher prices will add $1000 a year to an average household's grocery bill. let's get some thoughts now from our guests. joining us from london is alex dean, conservative commentator and former u.k. conservative party aid. a former economic advisor to the

shadow chancellor and current councilmember from the progressive economy for. also in london, a professor of economic policy at king's college london. a very warm welcome to all of you. what is the government's plan to deal with these strikes? >> i thought the piece was a fair one reflecting opinion on the ground in the country, and i thought the caveat at the end, those going on strike maintain public support for now, is quite telling. i fear they will find less public support, rightly or wrongly, for their cause, if you cannot get to work because the train is not working or have to stay home because your children cannot go to school, i think you lose a certain amount of sympathy. let's be frank -- i think the government will once part think that time is on their side.

>> to clarify, the prime minister, rishi sunak's plan is to wait for public opinion to turn? >> forgive me, i have no room to speak for the government at all. i was telling you what i think. that's the first thing, that i think term is against the interests of those going on strike and given the interests we have been discussing today, teachers going on strike, it is interesting what the u.k. spends on education just toward the top of the oecd bracket onyx miniature, and teacher pay, if you consider our neighbors toward the top of the european sliding scale of pay for teachers, and hours work is toward the bottom of hours worked by teachers. i have great respect for the profession. both my parents are teachers. i found the piece i was listening to quite affecting. my mother was a special needs teacher, but i would separate the points we were making between the interests of

teachers, which i think we can all discuss and think are important, and unions, which are mounting against the conservative party. >> there's quite a lot to unpick. let's take the last point that the unions are not actually representing the best interests of the teachers here. i believe that is what you were saying, that they are motivated by political means and that teachers actually don't have it so bad when compared to other european countries. >> well, they are not teaching in other european countries. they are teaching here. as the institute of physical studies, teacher pay has declined by 6000 pounds relative to what they would have got if it had kept pace with inflation, so this comes on top of a long period of declining real pay for teachers and worsening conditions in schools for teachers and for the students they teach. that is what is driving this. is not hundreds of thousands of teachers out there deciding they are going to go for richie sunak

-- rishi sunak. there's under the thousands of teachers citing they have to strike because the government is not a drink on the fact that they are being underpaid in the midst of what is critically historically high inflation in the u.k. >> you don't believe they are being driven by desperation? >> you said quite fairly in your introduction that the imf forecast for the united kingdom is not a positive one, but that's not something for critics of the government to celebrate. we should all want our country to do better. it is a reminder that there are not huge resources on which the states now can draw. our nurses union began their pay negotiations wanting 19% pay uplift, the kind of situation were even if the government meets you halfway, it is still being unreasonable. his is not coincidence -- it is not a coincidence these unions all come at the same time to

make demands the government cannot meet. it is to shift the needle to help the left in the next election. >> it does appear that there is a stalemate going on. we are seeing very few actual pay negotiations happening. why is neither side seemingly willing to compromise? >> that clearly is untrue, and i don't think even alex wood claim that is a statement of the facts. the fact is that the nurses union, for example, has said very explicitly in public several times that they are willing to compromise and settle for a significantly lower rise than the one they were originally asking for, and the government has explicitly refused even to discuss that. the same, i believe, is true of others on strike, so it is simile wrong to say that one side is refusing to compromise and the other is prepared to

compromise. the government has simply refused to talk about pay at all, and the unions have said explicitly that they are willing to talk and willing to cooperate, so i think we should be quite clear that that is not what is going on. >> are the unions, though, willing to compromise from double-digit figures, which the government says it cannot pay? >> i'm not sure why you are even asking me. i'm just a professor of economics here. just as a member of the public, i saw the leader of the nurses union on a sunday morning talk show just last week saying very explicitly, we will meet the government half way. the government simply will not discuss pay, and the government said they will not talk about pay. the unions have said very explicitly, we will talk about pay. this is the political discussion. i would like to know about the economics, but let's be clear on

the facts -- it is the government not talking about pay. the unions have said very clearly they will talk about pay. when we talk about who's side this time on, i think we need to look at from two perspectives. i don't know what will happen to public opinion, none of us to do, but quite simply in terms of can the government afford to sit and wait this out, yes, of course it can. the country will not collapse if the unions are on strike. if the government sticks to its guns, the unions will have to give in. they cannot force the government to hand over more money. but the important thing is actually in the long run, the government is still going to lose because as misses thatcher, who famously did concede to pay rises when inflation was rising, realized you cannot fight the

market. it is not the unions saying public-sector workers need more pay. it is the market. pay in the public sector has been cut substantially. at the moment, inflation is about 10.5%. private sector pay is rising by about 7%. the big cuts in real terms for people working in the private sector, but public-sector pay is rising by about 3%, so we are talking about average cuts in real terms of 7% or 8%, and the consequence, of course, is exactly what you expect. that is to say, very high levels of vacancies in health and social care, very high levels of, you know, the government cannot recruit teachers, new teachers, in the key areas we need to succeed as a country in years to come, science, technology, mathematics, and so

on. of course the government can simply refuse to pay, but what that will mean is that the quality of our public services, which has been debated quite a lot -- which has been degraded quite a lot in the last 10 years, can degrade even more. >> i want to get more of an idea about inflation and the rising cost of living. we got teachers, we've got nurses saying that their real salary of what they are taking home is roundabout 1/5 of what they had in 2010. it is not sustainable, is it, this rising cost of living, not in keeping with rising salaries? >> maybe it is 1/5 of what they had in 2010 rather than 1/5 of

what they had, but the problem is the last decade has seen most people not do especially well and once we hit this big surge of inflation in the last 18 months or so, most people are quite seriously losing out, energy bills in particular, but as energy bills relate, it has been food prices which are forecast to increase quite significantly over the next year and that is what is driving this. it is not just the public sector, though for the reasons jonathan outlined, it is most dramatically in the public sector. the government is deliberately holding down pay rises in the public sector as much as it can, thus provoking these strikes and worsening retention in the public sector. it has always been the -- it has also been the private sector where you see people losing out and we are starting to see more private sector strikes and private sector action taking place, something that has been quite unusual in britain for many decades at this point. >> of course politics is going

to play into this, but really this is, as jonathan says, an issue of the economy, isn't it? >> it is quite remarkable to claim in one breath that this is not to do with politics and then to say the government has provoked strikes. whatever your position on the political spectrum, public-sector strikes on this scale are really bad for government. anyone who think the government wants this to happen i think is really quite often we are political interpretation. jonathan is right when he says the government does not want to negotiate or pay, but does not tell you why. the reason the government does not want to do that is that for years, people in britain, especially on must say on the left, maintained it was quite wrong for a government to have direct control over decisions about where pay levels would be set and we needed to have these public-sector pay review bodies that would decide a fair position, and the reason government does not want to go through further negotiation

directly with union leaders is that those pay review bodies which were demanded, have and set up, have made conclusions, have recommendations, and the unions don't like them, so they blame the government for the conclusions of the third-party arm's-length body had -- you has decided their pay positions. jonathan is right to say that unions like the nurses do now say they are willing to compromise. my point was not they are not willing to compromise. that is not what i said. my point is that when you're starting point is nearly 20% is so unreasonable that when you say you are willing to meet the government halfway, you are still being unreasonable. [crosstalk] >> halfway would still be a cut. >> can we just be clear about the pay review bodies, though? alex presumably knows the position, so i think he frankly is being misleading. the government is not intimate

what the pay buddy's say. how many times has the government itself rejected the recommendation of the pay review bodies, then post a lower pay increase i can you tell us that? >> yes, but the point i'm making is you have not even thought to mention it. [crosstalk] >> we refuse to talk about pay. you have been perfectly clear and it was not true. the government says it wants to stick with the decision of the pay review body, right? >> are you saying the government always sticks with the decision of the pay review body or the government has not in the past simply rejected the decision of the pay review body and chosen to impose a lower pay increase? >> oh, no, it would be reasonable for you to argue that you think the government is wrong to say they want to stay with the pay review body's conclusions. it is quite misleading on your part to suggest the government simply refuses to discuss pay as

if that was not even relevant or a factor. what around saying the government was not going to talk about pay. [crosstalk] >> i think we should be quite clear about what is happening. i said correctly the government is refusing to discuss pay. you said that the government was refusing to discuss pay -- [crosstalk] wait, let me explain. pay was set at the demand of the "left," and i civilly pointed out that the government has a number of times, including in the very recent past, and including when jeremy hunt was health secretary, simply rejected the decision of the pay review bodies. the decision of the pay review bodies is not binding on either side, and that is because the government has refused to make it binding on either side and indeed, in the past, the government has simply ignored what the pay review but said and

imposed the lesser salary increase. on this occasion, the government >> with the pay review bodies have said and is therefore saying, we will stick with that. we are not going to talk about pay. so the government chooses when it likes the pay review bodies, it accepts it and refuses to talk further. when it does not like the recommendation of the pay review bodies, it rejects them and imposes a lower salary increase. >> lets bring james in at this point. [crosstalk] and if unions and teachers on strike actually pay any heed to what the pay review body says. >> the structures there -- the bigger question is who sets the remit for the pay review body. it is always the government in any case and shoot -- should the government choose to find more money to pay its workers, it could of course a that. the question has been fairly well dealt with similar because we don't have liz truss that

once the government borrowing have fallen roughly back to what it had been, we had not the headroom -- if the headroom is enough to pay inflation-meeting pay rise to the next sector over the next year or so. there is actually the money there, including even against the government's own rules at this point in time. margaret thatcher has already been mentioned. margaret thatcher her first year in office gave it to a 5% pay increase on average to the public sector because she did not want strikes to happen. it is not unheard of for governments to be generous when inflation is high because they know they have to keep those services running. what is happening is we are getting worse and worse public services because we are not paying people properly. >> how much do you think that aspect of this argument features in the government's conversation, the concern about the public services, the quality of the nhs, the quality of

schools? does that factor into any of this? >> yeah, well, quite significantly. it is one of the main things governments get elected on. i think it features quite prominently, but one of the other things that features quite significantly in discussions like this, there has been some discussion with how private sectors are getting on, too, and those of us in the private sector would look at a 23% defined pension and think that's incredibly generous, and then look at holiday arrangements, but you've got to think about the whole package somebody in these roles have, rather than simply talking about one data point of pay, even if jonathan was unwilling to discuss -- >> absolutely, but i've got to jump in because when you see people in these reports, you've got a teacher working two jobs just to support her teaching career. you have many others leaving the profession because they cannot afford to live on the salary.

that is not boosting or creating an ideal situation for older schools -- four our schools. >> as i mention, everyone in my family teaches. i don't quite recognize the position you have sketched out. in the end, argument by anecdote is almost certainly not the right thing to undertake. i have already made the point that are your teachers are better paid than most teachers in the entire continent and our spend is higher on education -- [crosstalk] it just does not match up. i'm going to move the discussion on a little bit if i can because i'm conscious of time. i want to bring up the fact that shell today posted the highest profit in its 115-year history. $40 billion' worth, double last year's. is it time -- sorry, i'm going to come back to you on this, but is it time for the government to impose a proper windfall tax on these energy companies that are profiting on these high energy

costs that are making other people's lives so miserable? >> the question would be the level at which it is set. i bet there's some people i shall wishing they did not have the announcements today. the timing is pretty poor for them, wouldn't you think, given the sheer size and scale of this? i heard the report package you had before we came on air talking about the level of tax that shell expected to pay in the u.k. as one of europe's largest businesses and europe's largest oil and gas company. it is, i think, not what most people would expect. while oil and gas giants will always argue they need to plow profits into exploration and future develop its, i think they will wind up paying more tax in the u.k. for sure. the discussion is then going to be about if the quid pro quo of allowing them to explore more

and invest more is going to happen because what you cannot be is a double nt. you cannot say they got to pay much more tax and not allowed to go out and take more fossil fuels out of the ground, which is the position of a lot of people currently in society, but that is no longer, interestingly, because of the energy crisis. the position of people like the biden administration who argued last year that the fracking industry in the u.s. should stop at nothing to increase production -- >> i'm going to keep moving on because i want to stick with this money issue, the money that is being made in some sectors, not in others. the government says it's got no money to meet double-digit demands from strikers. where should it get the money from if it is going to meet the demands? >> as james said, the idea the government has no money is not reframing any serious economist recognizes. over the longer term, there are

school stability constraints, but the idea the government cannot afford to pay now if it wanted to -- as i say, this is the key point. this is what the market is telling us, and it's quite amusing seeing someone like alex saying teachers are paid very well and just ignoring what the market is actually telling us. we cannot recruit nearly enough young teachers, particularly in subjects like science and mathematics, which are rightly government priorities, with the governor has rightly said, in my view, that we want everyone to learn more mathematics. we cannot recruit those teachers. why not? because we are not paying them enough. the market is telling us that. mathematicians can get significantly more money and better conditions elsewhere. saying they should think about their pensions, that is not what the market is saying. it just is not, and if you believe, we will have to pay for

public services more. that is regardless of if they go on strike. >> we are coming to the end of the show. we want james to have the last word here. strikes, they are ongoing. more strikes are forecast. what's going to happen? are they going to end? are they going to have their demands met? what do you think is going to bring britain into a better place? >> the most likely outcome at this point is i think the government has mishandled all the strikes. i think it was a mistake to end up in a situation where you have close to the entire public sector in dispute on's. i think that makes it hard for them to climb down and offer concession to any one group of strikers without having to start to think about making concessions elsewhere. we can see the splits already. my guess is the -- my guess is they are going to have to concede.

they will not concede to all of union demands but will concede a fair amount. my guess is if inflation stays high over the course of the year and most likely will, we will see other strikes not only in the public sector but increasingly in the private sector, two. >> we have to leave your discussion there. it has certainly been a live one. thank you for joining us on "inside story." and thank you, too, for watching. you can see a program again any time on our website. for our discussion, do go to our facebook page, facebook.com/ajinsidestory. you can also join the conversation on twitter. goodbye for now. ♪

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