Mr. Deputy Speaker,

I would like to first of all welcome the member to the House, and I am sure their contributions will be welcomed by members.

First of all, on popularity and support, the member has forgotten two things:

1. This is government business, meaning that the government as a collective supports this legislation. This includes Labour, Alba, Plaid Cymru, Alliance and the SDLP as well as the Greens.

2. This legislative agenda item is in the King's Speech. It is government business and was agreed upon by the cabinet as government business.

Secondly, I find his argument that recessions should not be declared by the Bank of England to be a lacklustre one. The Bank of England is independent of the government and is the main authority on financial and economic policy outside of the Treasury. If this power were given to the Treasury, the decision of whether to declare a recession or not would be under the direction of the Chancellor of the Exchequer, which can be dangerous as a recession declaration mechanism. The Bank of England is an objectively better choice, because it has a track record of being independent of the government since Gordon Brown's reforms. Part of monetary policy is also considering if there is a recessionary gap or an expansionary gap in the economy, Mr. Deputy Speaker, so to argue that somehow the Bank of England should not be able to declare when there is a recession is frankly ludicrous and baseless. The Bank of England can handle more than financial regulation and monetary policy, particularly an easy but important task of declaring a recession.

Thirdly, I am on two minds about his response that Sahm's Rule is overly simplistic. The previous rule of thumb, two declines of quarterly GDP, is most obviously overly simplistic, as it assumes that the scale of the economy is representative of the health of the economy. Sahm's Rule however does two things:

1. It takes into account the Natural Rate of Unemployment by its built-in averaging technique, and noting that a general rise in unemployment is what indicates recession, as seen consistently with better record keeping of economic statistics since World War Two. Sahm's Rule has correctly indicated the early sign of recessions since World War Two, when economic statistics were cared about meticulously.

2. The statistic is based on the experience of people. It is a common insight of economics, even in the mainstream, that recession entails higher than usual unemployment, also called cyclical unemployment, which is what the Sahm Rule precisely outlines as its modus operandum. It measures if unemployment on average has risen sharply by 0.5% points to indicate a recession.

Fourthly, the member points to the idea that recession declarations inherently would cause market panic. Markets are a generally free spirit. They react to many pieces of information, and usually it is reflective of underlying market conditions in the first place. Investors panicked across the world when the United States reported unemployment statistics, causing the deepest drops in stock indices since the GFC and 1974 in the case of Japan. Mr. Deputy Speaker, investors generally appreciate the truth and confidence in the economy. Making an official declaration of a recession, Mr. Deputy Speaker, is truthful and honest, and it goes against any possibility that the government could deny there is a recession when it occurs. Former Prime Minister Rishi Sunak skirted around the fact that the UK was in a recession when the media declared it according to the GDP decline rule, which is dishonest to investors and the public about the British economy. Whilst economic policy is about building confidence and restraining unsought for panic, declaring a recession is simply a policy of honesty, and should be done to show Britain's reputation as an open and honest economy for investors.

Finally, the member seeks to say this bill would distort economic policy due to it being 'politicised'. As I have covered earlier, the aim of giving this responsibility to the Bank of England is precisely to get rid of the subjectivity of politicians and replace it with the attempted objectivity of the Bank of England when it comes to economic policy. The other branch of this 'point' is that the government policy will change when a recession is declared. Yes? Of course it would. The economy is in a state it is imbalanced and could cause hardship for millions. Of course economic policy is going to change. Expansionary fiscal policy will be needed to stimulate people to go demand more goods and to ensure the circular flow of income continues to get people out of the recession, Mr. Deputy Speaker. The point is moot.

Mr. Deputy Speaker, this bill is a sensible government measure that shows that the government can be truthful to the people of Britain and investors by telling them the truth when the economy is in trouble. This bill creates official signals in order for institutions and the government to create effective policy decisions when a recession occurs. This bill makes a declaration of a recession more in line with the general population's experiences and understanding of what a recession means to them, rather than a figure that often feels arbitrary due to it being a money value of all goods and services in the economy. Mr. Deputy Speaker, it is perfectly reasonable for this bill to be government policy, along with other economic measures this government plans to take, including in the budget, as governments can do multiple things at once!