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Preparatory expenditure

Mr. Francois: I beg to move amendment No. 3, in page 1, line 10 at end add—

‘(4) No expenditure shall be incurred under section 1 earlier than 90 days after the conclusion, on 28th February 2007, of the consultation exercises on the implementation of the Planning-Gain Supplement.’.

The amendment is designed to delay implementation of the Bill for at least 90 days after the consultation exercises on the PGS have ended next week. It has been tabled partly because the Treasury still appears confused about whether it intends to proceed with the PGS at all. Nevertheless, as my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said earlier, the Treasury is still asking Parliament to authorise expenditure to prepare for a tax that it has not yet decided to introduce. The money could ultimately go to waste if the Government do not intend to proceed.

I want to press the Financial Secretary on a point that my hon. Friend the Member for St. Albans (Anne Main) made in Committee about the purposes to which the Treasury wants to put the money that would be
20 Feb 2007 : Column 181
authorised by the Bill and could be spent immediately after Royal Assent, which could theoretically happen as early as next month.

Rumours are circulating in the media that, despite doubts about the PGS, the Treasury still wants the Bill because it would like to begin work on a new IT system, which could be used for alternative planning-related purposes if the PGS collapsed. The new planning permission that the Government recently proposed might be an example. Can the Minister give a firm commitment that the funds being requested by the Bill will be used solely for PGS-related work? I ask that partly because, following the hostile reaction that the proposed PGS has provoked so far, the Treasury appears to have been gradually backing away from its introduction in recent months. We were originally told that the Government planned to introduce the PGS in 2008, and the Treasury issued a consultation document in 2005 on how that might be achieved.

The response to the Government’s consultation was hardly encouraging from their point of view. The Institute of Directors called on the Government to drop their proposals, stating:

It also said that the tax constituted

and would

The Royal Town Planning Institute responded to the consultation exercise in a document entitled “Consultation Paper Exposes Folly of New Land Tax”. It said:

A detailed study of the proposed operation of the PGS was conducted by property experts Knight Frank on behalf of the British Property Federation, the Confederation of British Industry, the Home Builders Federation and the Royal Institution of Chartered Surveyors. Page 4 of its executive summary, produced last September, states:

Perhaps in the light of that reaction, in the December 2006 pre-Budget report the Treasury confirmed that the proposed introduction of the PGS was to be delayed until 2009.

By the time we reached Second Reading on 15 January, the Financial Secretary, introducing the Bill, had watered down the Government’s commitment still further. He said:

So even the Government are now apparently backing away from their own idea, which has been downgraded from a proposal to the status of only a “lead option”.


20 Feb 2007 : Column 182

To coincide with the delay announced in the pre-Budget report, the Treasury also announced a further three consultation documents on the proposed introduction of the PGS: “Valuing planning gain”, “Paying PGS” and, in co-operation with the Department for Communities and Local Government, “Changes to Planning Obligations”. The three consultations will not close until 28 February—next week—and presumably the Government will want to analyse the responses that it has received before deciding whether to proceed. The original consultation exercise produced some 700 responses, and we can assume that this exercise will produce quite a number as well. There is little point in seeking a wide range of opinions if the Government have already decided to plough on regardless, yet this evening they are still asking the House to vote for approval for preparatory spending before the consultations have even closed.

During the 30 January Committee sitting, at column 11, the Financial Secretary assured me that if the Government did resolve eventually to press ahead with the PGS, they would do so by means of a separate Bill rather than including primary legislation in a Finance Bill. Given that, and on the assumption that there will be a Budget statement in March followed by a Finance Bill in April, the Government need not rush preparation of the necessary clauses so that they are ready less than two months from today. If the Government are now contemplating introducing a separate Bill to allow implementation in 2009 rather than 2008 as originally envisaged, they have further time in which to reflect on what to do, and therefore need not seek the approval of the House to begin spending public funds almost immediately. That is particularly important, as there is no expenditure limit in the Bill. The expenditure could be theoretically be open-ended, particularly if the Treasury continues to dither on whether or not ultimately to proceed with the PGS.

The explanatory notes that accompany the Bill provide an indicative figure of up to £52 million for staffing in the procurement of an associated PGS IT system, but as the notes point out, they do not form a part of the Bill itself, so it is purely an estimate, not a cap. The actual figure could easily exceed the estimate, particularly if there are cost overruns on the associated computer system—a point that we debated in some detail in Committee and in relation to which recent experiences in the Home Office and the NHS are hardly encouraging.

5.15 pm

For instance, in respect of the new NHS IT system, Mr. Andrew Rollason, the health care practice leader at Fujitsu—one of the major contractors running the £20 billion programme—recently said of the new NHS system:

Even the Treasury’s own IT system’s projects are now running a collective total of 17 years late, which does little to inspire confidence that the estimates outlined in the notes will be adhered to in practice. At a time when our prisons are effectively full up, gun crime in inner cities is running out of control and most of our local NHS primary care trusts are under serious financial
20 Feb 2007 : Column 183
pressure, why are the Government requesting permission to spend £50 million or so of public money on a tax that they may never actually introduce?

Dr. Starkey: May I draw the hon. Gentleman’s attention to items that he left out of his list of things that are happening, such as the increasing housing crisis and the dire lack of affordable housing, particularly across London and the south-east? That might be related to the fact that the Government wish to have a tax that could fund the infrastructure.

Mr. Francois: As the hon. Lady well knows, the provision of affordable housing has gone down quite a lot under this Government by comparison with their predecessor. One of the reasons for that is that the Government have failed to provide the resources. I would have thought that the hon. Lady, as Chairman of the Select Committee, already knew that.

As I argued in Committee— [Interruption.] I will give way in a moment. The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) has only just entered the Chamber and I have already said that I will give way to him in a moment. [Interruption.] I said in a moment.

As I argued in Committee, the Bill puts the cart before the horse, so our amendment makes the case for delaying any expenditure in conjunction with the introduction of the planning gain supplement until three months after the latest consultation exercises have closed. The Treasury can then hopefully take those responses properly into account. I will now give way to the right hon. Gentleman, who is a former housing and planning Minister and who is firmly on the record as opposing the whole planning gain supplement concept.

Mr. Nick Raynsford (Greenwich and Woolwich) (Lab): I would not want the hon. Gentleman to mislead the House by implying that there has been a reduction in expenditure on housing under this Government when compared with the record of the previous Government. He will be aware that there has been a very substantial increase in resources and that many of them have been allocated to improving the quality and condition of the existing stock, which was left in a very poor state indeed by the previous Conservative Government, whom the hon. Gentleman supported. I hope that he will recognise that.

Mr. Deputy Speaker: Order. Before the hon. Gentleman responds, I remind him that we are not conducting a general debate on housing, but discussing amendment No. 3.

Mr. Francois: I understand that, Mr. Deputy Speaker, but if you will allow me, I have been accused of misleading the House, so I would like to explain for a few moments. My point was that, as I understand it, the number of new completions has gone down, although I take the right hon. Gentleman’s point about refurbishment. [Interruption.] The number of new completions has fallen over the past few years— I believe that that is correct. [Interruption.] I shall move on.

When the Treasury has received the responses to the consultation exercises and had 90 days—a reasonable period—to examine them, perhaps at that time, if not before, the Treasury will abandon the whole planning
20 Feb 2007 : Column 184
gain supplement and save us a great deal of further time and trouble as a result. In the meantime, I urge the House to support the amendment this evening and to protect the interests of the UK taxpayer while this dithering Government desperately try to make their minds up about what they are going to do.

John Healey: As the hon. Member for Rayleigh (Mr. Francois) has made clear, the amendment is designed to insert a three-month delay between the end of the current consultation, which is completed on 28 February, and the spending of any money that the Bill would then authorise. I understand the purpose of the amendment, but I hope that the hon. Gentleman will accept that it is at best unnecessary, and at worst may complicate things and create additional risk for the successful and sensible introduction of any planning gain supplement.

I assured the House on Second Reading and in Committee that if the Government decided not to introduce the planning gain supplement, there would be no further expenditure under this legislation. I also want to make it clear, in response to the question that the hon. Gentleman has raised, that clause 1(1) of the Bill sets out the purposes for which expenditure under this legislation can be used, and that they are specifically and strictly related to preparations for the introduction of a possible planning gain supplement. They could not be used for an IT system for other purposes.

The Government gave a commitment in the pre-Budget report that we would not introduce a planning gain supplement unless we considered it to be a workable and effective policy. Of course, the decision on whether the planning gain supplement is workable and effective will be informed by the responses to the consultation. I should remind the hon. Gentleman that a consultation is not simply a 12-week period in which the Treasury and the other Departments involved shut up shop and officials sit on their hands, followed by a period of frenetic reading and analysis of correspondence. On the contrary, it is a period of intense activity, particularly by officials who, during the consultation period, have been out meeting and discussing the issues with representatives of all sorts of interested groups right across the United Kingdom in order to determine their concerns about the matters under consultation. So, officials and others have been out there, explaining the proposals and listening to people’s views on them. Many of the written responses to the consultation will formalise the views that we are already aware of and that have already been discussed, and which have been gathered during these meetings.

The amendment would simply delay expenditure for up to three months beyond the end of this month, even if we decided to introduce a planning gain supplement before the end of that 90-day period. At best, that would achieve nothing. At worst, it would increase the costs of any IT systems by reducing flexibility and by increasing the time pressures involved in bringing in a planning gain supplement in an orderly and timely way. I hope that the hon. Gentleman will not press the amendment to a vote, but if he does I shall have to ask my hon. Friends to resist it.

Mr. Francois: Our debate on amendment No. 3 has given the House an opportunity to press the Government on why they insist on pressing ahead with
20 Feb 2007 : Column 185
a request for the House to authorise expenditure in preparing for a tax that they have not yet decided to introduce. The sum of £52 million—or, potentially, even more—of public funds is a lot of money to shell out on what is only a lead option. By definition, another option might eventually be adopted instead. It would be preferable to delay any expenditure until the Government have definitively decided whether to go ahead with the substantive measure of the planning gain supplement.

The Government’s approach was criticised by Mr. Peter Bill, the editor of the Estates Gazette, in a December 2006 editorial, in which he said:

In the light of all that, we believe that the Government are indulging in what my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack) rightly described on Second Reading as “pre-legislative legislation”. We have not been sufficiently persuaded on this matter, and I should therefore like to test the will of the House.

Question put, That the amendment be made:—

The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.


The House having divided: Ayes 206, Noes 277.
Division No. 050]
[5.24 pm



AYES


Afriyie, Adam
Ainsworth, Mr. Peter
Amess, Mr. David
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Baldry, Tony
Baron, Mr. John
Barrett, John
Beith, rh Mr. Alan
Bellingham, Mr. Henry
Benyon, Mr. Richard
Bercow, John
Beresford, Sir Paul
Binley, Mr. Brian
Blunt, Mr. Crispin
Bone, Mr. Peter
Boswell, Mr. Tim
Bottomley, Peter
Brady, Mr. Graham
Brazier, Mr. Julian
Breed, Mr. Colin
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Bruce, rh Malcolm
Burns, Mr. Simon
Burrowes, Mr. David
Burstow, Mr. Paul
Burt, Alistair
Burt, Lorely
Butterfill, Sir John
Cable, Dr. Vincent
Cameron, rh Mr. David
Carmichael, Mr. Alistair
Carswell, Mr. Douglas
Clappison, Mr. James
Clark, Greg
Clarke, rh Mr. Kenneth
Clifton-Brown, Mr. Geoffrey
Cormack, Sir Patrick
Crabb, Mr. Stephen
Curry, rh Mr. David
Davey, Mr. Edward
Davies, David T.C. (Monmouth)
Davies, Philip
Davies, Mr. Quentin
Davis, rh David (Haltemprice and Howden)
Djanogly, Mr. Jonathan
Dorrell, rh Mr. Stephen
Dorries, Mrs. Nadine
Duddridge, James
Duncan, Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Ellwood, Mr. Tobias

Evans, Mr. Nigel
Fabricant, Michael
Farron, Tim
Featherstone, Lynne
Field, Mr. Mark
Foster, Mr. Don
Fox, Dr. Liam
Francois, Mr. Mark
Fraser, Mr. Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodman, Mr. Paul
Gove, Michael
Gray, Mr. James
Grayling, Chris
Green, Damian
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hands, Mr. Greg
Harris, Dr. Evan
Hayes, Mr. John
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Herbert, Nick
Hoban, Mr. Mark
Hogg, rh Mr. Douglas
Hollobone, Mr. Philip
Holmes, Paul
Hosie, Stewart
Howard, rh Mr. Michael
Hughes, Simon
Huhne, Chris
Hunt, Mr. Jeremy
Hunter, Mark
Hurd, Mr. Nick
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Johnson, Mr. Boris
Jones, Mr. David
Kawczynski, Daniel
Keetch, Mr. Paul
Knight, rh Mr. Greg
Lait, Mrs. Jacqui
Lamb, Norman
Lansley, Mr. Andrew
Leech, Mr. John
Letwin, rh Mr. Oliver
Lidington, Mr. David
Llwyd, Mr. Elfyn
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
Main, Anne
Malins, Mr. Humfrey
Maples, Mr. John
Mates, rh Mr. Michael
May, rh Mrs. Theresa
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Miller, Mrs. Maria
Mitchell, Mr. Andrew
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
Neill, Robert
Newmark, Mr. Brooks
O'Brien, Mr. Stephen
Oaten, Mr. Mark
Öpik, Lembit
Osborne, Mr. George
Ottaway, Richard
Penning, Mike
Penrose, John
Pickles, Mr. Eric
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Pugh, Dr. John
Randall, Mr. John
Redwood, rh Mr. John
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Angus
Rowen, Paul
Ruffley, Mr. David
Sanders, Mr. Adrian
Scott, Mr. Lee
Shapps, Grant
Shepherd, Mr. Richard
Simpson, Mr. Keith
Smith, Sir Robert
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Streeter, Mr. Gary
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Mr. Ian
Taylor, Matthew
Thurso, John
Tredinnick, David
Tyrie, Mr. Andrew
Vara, Mr. Shailesh
Villiers, Mrs. Theresa
Wallace, Mr. Ben
Walter, Mr. Robert
Watkinson, Angela
Webb, Steve
Weir, Mr. Mike
Whittingdale, Mr. John
Widdecombe, rh Miss Ann
Wiggin, Bill
Willetts, Mr. David
Williams, Hywel
Williams, Mark
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilshire, Mr. David
Wilson, Mr. Rob

Winterton, Ann
Winterton, Sir Nicholas
Wishart, Pete
Wright, Jeremy
Young, rh Sir George
Tellers for the Ayes:

Mr. David Evennett and
Mr. Mark Lancaster
NOES


Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Burden, Richard
Burgon, Colin
Burnham, Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Cairns, David
Campbell, Mr. Alan
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Tom
Clelland, Mr. David
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Cooper, Rosie
Cooper, Yvette
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Dean, Mrs. Janet
Denham, rh Mr. John
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Dunwoody, Mrs. Gwyneth
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Etherington, Bill
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hoon, rh Mr. Geoffrey
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay

Humble, Mrs. Joan
Iddon, Dr. Brian
Illsley, Mr. Eric
Ingram, rh Mr. Adam
Jackson, Glenda
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jowell, rh Tessa
Joyce, Mr. Eric
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
Mactaggart, Fiona
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCafferty, Chris
McCarthy, Kerry
McCartney, rh Mr. Ian
McDonagh, Siobhain
McFall, rh John
McGuire, Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffat, Anne
Moffatt, Laura
Mole, Chris
Morgan, Julie
Morley, rh Mr. Elliot
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, Mr. Jim
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Osborne, Sandra
Palmer, Dr. Nick
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Riordan, Mrs. Linda
Rooney, Mr. Terry
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Seabeck, Alison
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew
Smith, Angela E. (Basildon)
Snelgrove, Anne
Soulsby, Sir Peter
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, Dr. Richard
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Twigg, Derek
Ussher, Kitty
Vaz, rh Keith
Vis, Dr. Rudi
Waltho, Lynda
Ward, Claire
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Williams, rh Mr. Alan
Williams, Mrs. Betty
Winnick, Mr. David
Winterton, rh Ms Rosie
Wood, Mike
Woolas, Mr. Phil

Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:

Mr. Frank Roy and
Huw Irranca-Davies
Question accordingly negatived.
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