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30 Apr 2008 : Column 391

The IEA report estimates that the German feed-in tariff regime between 2000 and 2012 will result in payments of €68 billion, of which some €30 billion to €36 billion will be the additional costs of renewables. It is important to point those facts out. By 2012, the annual cost would be between €8 billion and €9.5 billion.

It is also worth reporting the IEA’s finding that solar PV would provide some 4.5 per cent. of Germany’s electricity while taking some 20 per cent. of the potential payments. When we compare systems, it is important that we look at the costs as well as the benefits.

Paul Farrelly (Newcastle-under-Lyme) (Lab): I apologise that I was unable to be present to hear all the Minister’s comments. As I left my office, I heard on the monitor some of his arguments against new clause 4 and they seemed reminiscent of those used by the Department on the subject of agency workers: we ought not to do anything here, because it might scupper our efforts in Europe. In fact, Britain was not playing ball with Europe in the most progressive way.

Malcolm Wicks: I think that I need to reflect further on the comparison, which has not immediately struck me as helpful, but it might be. I will reflect on it.

Mr. Swire: Will the Minister give way?

Malcolm Wicks: Not just yet, no, as I have given way to the hon. Gentleman a couple of times. I shall come back to him later.

Alan Simpson: I am grateful for the Minister’s comments on the cost, but does he also accept that we need to take on board, in full, the German Government’s report on costs and on economic savings that come out of their commitment to renewables? Their figures show clearly that they can deliver savings of up to €5 billion a year, and the economic benefits of 250,000 new jobs generate spending in the economy. Meeting their own energy needs rather than having to buy from external sources is an enormous cost saving as well as a huge boost to their energy security.

Malcolm Wicks: I agree that we need to look at both costs and benefits, but we also need to accept that long-term consistency is the hallmark of the German regime. Therefore, it might not be sensible for us to change horses now and move away from the RO.

Mr. Swire: The hon. Member for Nottingham, South (Alan Simpson) is right to suggest that we need leadership from the Minister and the Government, because we are simply not getting it. The Minister says that he is weighing up the costs and the benefits, but I can tell him that the costs are the subsidies involved, and that the benefit is that microproducers will be encouraged to take energy production seriously. The Government need to lead on this, because otherwise we will fall behind other countries just as we have already fallen behind Germany.

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Malcolm Wicks: As far as Germany is concerned, we must remember that the endgame of all the different mechanisms is to reduce carbon emissions. Again, I refuse to accept the simple comparison that suggests that Germany is in a better place than we are—

Gregory Barker: It is!

Malcolm Wicks: I shall explain what I mean, as I want to be helpful to the hon. Gentleman. Per capita carbon dioxide emissions of 9,937 kg in the UK compare with 10,936 kg in Germany, which suggests that something is going right here. Moreover, energy use per capita is significantly higher in Germany than it is in the UK. We have to careful about comparisons, because the endgame is about two things—climate change and energy security.

On consistency, industry representatives have told us again and again that they want the Government to ensure that decisions are implemented as quickly as possible so that investors can rely on a stable and consistent policy framework. We have given that commitment, so the new clause could have an effect opposite to what those who propose it intend. Industry and investors have told us that it would be likely to create uncertainty in the market that would lead to delays in new investment.

We are moving forward with reforming the RO. Indeed, the Bill amends the RO to make it sensitive, and it will remain the main policy mechanism for renewable electricity. Any move that threatens to replace the RO would destroy investor confidence and would be likely to result in significant delays to projects coming on line. That could put the delivery of the EU emissions target at risk.

The Government have also received a clear steer from industry that financial support for large-scale generation is not the main barrier to delivering more renewable energy. We are also working hard, as colleagues know, to address a range of other factors, including the planning system and grid access.

I want to turn now to smaller-scale generation.

Mr. Morley: Will the Minister give way?

Malcolm Wicks: If my right hon. Friend is not going to talk about smaller-scale generation, I will give way to him.

Mr. Morley: I am grateful to my hon. Friend for giving way. Many of us accept that there has been consistency in Germany about the feed-in tariff, and that we have been consistent about ROs, but all sorts of new micro-technologies are being developed and my hon. Friend the Member for Nottingham, South (Alan Simpson) has made a persuasive case about them. The Minister is about to deal with those new micro- technologies, but is he prepared to look at different ways to incentivise that new sector that would not disturb the consistency that he has described?

Malcolm Wicks: As I anticipated, my right hon. Friend’s question leads me into the next section of my argument. It is important, because I sometimes think that there is a bit of confusion in the debate about renewable instruments—that is, feed-in tariffs as opposed
30 Apr 2008 : Column 393
to ROs. Are we talking about how to incentivise all renewable projects, macro as well as micro, or is the House mainly interested in microgeneration? That is why I now want to discuss smaller-scale generation, which has been the subject of much debate in the media and in this House, especially over the past week or so but also for a longer period of time. I recognise the great support for the early-day motion. I sympathise with, and fully support, people’s yearning for appropriate incentives to encourage the faster take-up of microgeneration. Several hon. Members will know that I have long been an advocate of microgeneration, both in principle and through my attempted practice as a citizen. I have long held the view that if we are to tackle climate change and global warming, there will be important roles for big institutions—the EU, the G8 and the United Nations— big Governments and big corporations. There is also a need for a proper carbon market. However, I have also always taken the view that we need to empower more of our concerned citizens—the recycling generation, if I may call them that, who want to do something about their dwellings and community buildings—to be active citizens on behalf of the environment.

5.30 pm

Colin Challen: Will my hon. Friend give way?

Malcolm Wicks: Let me make some progress before I come back to my hon. Friend—[Hon. Members: “Give way!”] I do not think that I will, because my hon. Friend is eager to hear my argument.

Under the low-carbon building programme, we have made some £86 million available in capital grants to reduce the cost of buying and installing equipment. We have removed the need for planning permission for domestic installations that have little or no impact beyond the host property. People have called for that for some time, and the Government—the Department for Communities and Local Government—have listened. We have also announced double the support for all microgeneration technologies under the RO, once banding is introduced. That support will be maintained after the first banding review of 2013.

We often hear that the RO is complex, especially for microgeneration, compared with Germany’s feed-in tariff. I understand that there are 500 different feed-in tariffs in Germany, with about 120 to 150 more tariffs being added each year. That is not the simple, straightforward picture that some people assume is the case. However, we are not complacent about the changes required to simplify our RO. In April 2007, we introduced the use of agents within the RO. Since then, the number of microgenerators accredited under the RO has increased by more than 250 per cent. We have simplified the accreditation form, and such forms can now be completed and submitted online.

Additionally, suppliers are voluntarily, albeit supported by the RO, offering a tariff system for electricity generation from microgeneration—really, a feed-in tariff. For example, Scottish and Southern Energy is offering 18p a kWh to small generators for their electricity that is exported to the grid. However, that is not all. We will launch a consultation this summer on what we should do to increase renewable energy use to meet our share of the EU 2020 target.
30 Apr 2008 : Column 394
That will cover a broad range of issues and involve collaborative efforts across Government and with business, consumers and the wider community. The proposals will strive for the best value for money for UK taxpayers and consumers. As the Prime Minister explained in November, we want a serious national debate about how to achieve our targets.

Some hon. Members will be aware that I announced in Committee that as part of the strategy, we will examine a range of options further to support microgeneration, including a consideration of whether a feed-in tariff might be a better support mechanism than the renewables obligation for small-scale generation—I am thinking of domestic dwellings, community schemes, small civic buildings and small businesses. It would not be right to impose a requirement to introduce a feed-in tariff now without first carefully examining precisely how it would operate, whether there might be better alternatives, and the impact that it might have. We need to be confident that any legislation covers all scenarios and does not impact negatively on existing legislation. In my view, such work can be taken forward only in the wider context of what else we might do to meet our target.

Colin Challen rose—

Malcolm Wicks: I give way to my hon. Friend.

Hon. Members: Never give up!

Colin Challen: I had nearly given up. I appreciate a great deal of what my hon. Friend the Minister says. There are lessons to be learned from Germany; one of them is that Germany is still proposing new coal-fired power stations without carbon capture and storage, so it is not all green on the other side of the street. My question is: if a group of people want to come together to set up some kind of community microgeneration, why should we set an artificial cap on the power that the group can generate? I think that he is saying that we would artificially cap microgeneration at, say, 50 kW to preserve the renewables obligation.

Malcolm Wicks: As we saw in the case of micro-hydro, there is always the issue of where one draws the line, yes? [Hon. Members: “Yes!”] I am happy to draw the line under the positive arguments that I am putting forward. [Laughter.] It is nice to amuse the latecomers. As I have said, I recognise that there is a financial gap in the renewable energy strategy, and that there is a need for a new financial incentive. We will look properly at feed-in tariffs—I said that weeks ago; I am not just saying it today—and at other mechanisms for householders and community schemes. I understand the importance of what my hon. Friend says, because renewables should not solely be about big corporations doing things to local communities. We should enable communities to do things for themselves as part of the active citizen agenda.

I hope that hon. Members are reassured that we are taking the issues seriously. After the renewable energy strategy, we will bring forward appropriate proposals—including proposals for legislation, if necessary—as soon as possible. I ask my hon. Friend the Member for Nottingham, South to consider withdrawing new clause 4 in light of my comments.

30 Apr 2008 : Column 395

Alan Simpson: I have listened to the concerns and arguments that the Minister has put forward. Let me try to address two of his concerns, and then his arguments. The first concern is about the commitment that he has already made to considering the issue of microgeneration. The great difficulty is that there is a whole series of issues that the Government have agreed to consider. For instance, they agreed to look at the 2010 fuel poverty targets. Unfortunately, having done so, they decided that the targets were too difficult to reach, and that we will not meet them, so that commitment will not get us out of the mess that we are in.

Secondly, the Minister expressed concern about the fact that if a feed-in tariff scheme were applied too widely, it could create chaos. He did not mention the fact that he would be in charge of determining how widely the scheme would apply, so the chaos would be his, as is the current chaos. We have to recognise that although good things that are beginning to happen, they are beginning to happen in a country that is at the bottom of the European renewables league. There is nothing in our programme that will allow us to meet the 2010 targets to which we have committed ourselves.

What we are asking colleagues to vote for, through the new clause, is a commitment on the part of the Government to come back within a year with a framework that sets out how we would introduce appropriate feed-in tariff legislation that applies to the different technologies and to electricity generation, heat generation and the production of biogas. We are talking about a timetable, more than anything else.

Let me explain the significance of the timetable. Last December, our Government sent Ministers to the conference on climate change in Bali. The scientists reporting to that conference said to global leaders that in the next five to eight years we will determine the fate of the generations that will follow. It is what we do in those five to eight years that will determine whether we pass the tipping-point for climate chaos or not. We cannot avoid having to deal with the crises ahead of us, but we do not need to allow chaos to develop. That requires us to act on a dramatic scale now. There is nothing in the framework before the House that will allow us or equip us to take that step. I am asking colleagues from all parties in the House to have the courage to take that step.

I know that many of us have mentioned the name of Lily Allen during the debate, but I hope she will forgive me if I end with some lines from another singer, Tracy Chapman, who sung:

Consultations without commitments are as good as none. The House today has the opportunity to make a commitment that crosses party divides, that crosses interests in society, but that unites us in a commitment to deliver something meaningful and sustainable. I hope we have the courage to do so.

Question put, That the clause be read a Second time:—

The House divided: Ayes 210, Noes 250.
Division No. 165]
[5.41 pm


Abbott, Ms Diane
Afriyie, Adam
Ainsworth, Mr. Peter
Alexander, Danny
Ancram, rh Mr. Michael
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, Mr. John
Barrett, John
Binley, Mr. Brian
Blunt, Mr. Crispin
Bone, Mr. Peter
Boswell, Mr. Tim
Bottomley, Peter
Brady, Mr. Graham
Brazier, Mr. Julian
Breed, Mr. Colin
Bruce, rh Malcolm
Burgon, Colin
Burns, Mr. Simon
Burt, Alistair
Butterfill, Sir John
Cable, Dr. Vincent
Cameron, rh Mr. David
Carmichael, Mr. Alistair
Carswell, Mr. Douglas
Cash, Mr. William
Caton, Mr. Martin
Challen, Colin
Chope, Mr. Christopher
Clappison, Mr. James
Clark, Ms Katy
Clarke, rh Mr. Kenneth
Clifton-Brown, Mr. Geoffrey
Cohen, Harry
Cook, Frank
Corbyn, Jeremy
Cousins, Jim
Crabb, Mr. Stephen
Curry, rh Mr. David
Davies, Mr. Dai
Davies, David T.C. (Monmouth)
Davies, Philip
Davis, rh David (Haltemprice and Howden)
Djanogly, Mr. Jonathan
Dodds, Mr. Nigel
Donaldson, rh Mr. Jeffrey M.
Dorrell, rh Mr. Stephen
Dorries, Mrs. Nadine
Drew, Mr. David
Duncan, Alan
Duncan Smith, rh Mr. Iain
Etherington, Bill
Evans, Mr. Nigel
Fallon, Mr. Michael
Farrelly, Paul
Field, rh Mr. Frank
Field, Mr. Mark
Fisher, Mark
Flynn, Paul
Foster, Mr. Don
Francois, Mr. Mark
Fraser, Christopher
Gale, Mr. Roger
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Goldsworthy, Julia
Goodman, Mr. Paul
Gove, Michael
Gray, Mr. James
Greening, Justine
Greenway, Mr. John
Grieve, Mr. Dominic
Grogan, Mr. John
Gummer, rh Mr. John
Hague, rh Mr. William
Hamilton, Mr. Fabian
Hands, Mr. Greg
Harper, Mr. Mark
Harvey, Nick
Havard, Mr. Dai
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Hendry, Charles
Herbert, Nick
Heyes, David
Hoban, Mr. Mark
Hoey, Kate
Hollobone, Mr. Philip
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Howard, rh Mr. Michael
Howarth, David
Howarth, Mr. Gerald
Hughes, Simon
Jack, rh Mr. Michael
Jenkin, Mr. Bernard
Jones, Mr. David
Jones, Lynne
Kawczynski, Daniel
Keetch, Mr. Paul
Kennedy, rh Mr. Charles
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Kramer, Susan
Lansley, Mr. Andrew
Leigh, Mr. Edward
Lidington, Mr. David
Llwyd, Mr. Elfyn
Loughton, Tim
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
MacNeil, Mr. Angus
Malins, Mr. Humfrey
Maples, Mr. John
Mates, rh Mr. Michael
Maude, rh Mr. Francis
May, rh Mrs. Theresa
McCrea, Dr. William
McDonnell, John
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Meacher, rh Mr. Michael
Mercer, Patrick
Mitchell, Mr. Austin
Moore, Mr. Michael
Moss, Mr. Malcolm

Mullin, Mr. Chris
Mundell, David
Newmark, Mr. Brooks
Öpik, Lembit
Osborne, Mr. George
Ottaway, Richard
Paice, Mr. James
Penrose, John
Pickles, Mr. Eric
Prentice, Mr. Gordon
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Riordan, Mrs. Linda
Robathan, Mr. Andrew
Robertson, Angus
Robertson, Mr. Laurence
Rogerson, Dan
Ruffley, Mr. David
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Short, rh Clare
Simpson, Alan
Simpson, Mr. Keith
Smith, Sir Robert
Soames, Mr. Nicholas
Soulsby, Sir Peter
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Streeter, Mr. Gary
Stuart, Mr. Graham
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, David
Taylor, Mr. Ian
Taylor, Matthew
Taylor, Dr. Richard
Thurso, John
Trickett, Jon
Truswell, Mr. Paul
Turner, Mr. Andrew
Turner, Dr. Desmond
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Peter
Villiers, Mrs. Theresa
Vis, Dr. Rudi
Wallace, Mr. Ben
Walter, Mr. Robert
Wareing, Mr. Robert N.
Webb, Steve
Weir, Mr. Mike
Wiggin, Bill
Willetts, Mr. David
Williams, Hywel
Williams, Stephen
Willis, Mr. Phil
Wilshire, Mr. David
Winterton, Ann
Winterton, Sir Nicholas
Wishart, Pete
Wood, Mike
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Ayes:

Kelvin Hopkins and
Dr. Ian Gibson

Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Blackman, Liz
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
Burnham, rh Andy
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Cawsey, Mr. Ian
Chapman, Ben
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Tom
Clelland, Mr. David
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Connarty, Michael
Cooper, Rosie
Cooper, rh Yvette
Crausby, Mr. David
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire

Davidson, Mr. Ian
Davies, Mr. Quentin
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Eagle, Angela
Eagle, Maria
Ellman, Mrs. Louise
Ennis, Jeff
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Follett, Barbara
Foster, Mr. Michael (Worcester)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gilroy, Linda
Goggins, Paul
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Healey, John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hewitt, rh Ms Patricia
Hill, rh Keith
Hillier, Meg
Hoon, rh Mr. Geoffrey
Hope, Phil
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Irranca-Davies, Huw
James, Mrs. Siân C.
Jenkins, Mr. Brian
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Mr. Martyn
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Lloyd, Tony
Lucas, Ian
Mackinlay, Andrew
MacShane, rh Mr. Denis
Mactaggart, Fiona
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCarthy, Kerry
McCarthy-Fry, Sarah
McDonagh, Siobhain
McFadden, Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh David
Miller, Andrew
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pound, Stephen
Prentice, Bridget
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Reid, rh John
Robertson, John
Robinson, Mr. Geoffrey

Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Sarwar, Mr. Mohammad
Seabeck, Alison
Sharma, Mr. Virendra
Shaw, Jonathan
Sheridan, Jim
Simon, Mr. Siôn
Singh, Mr. Marsha
Skinner, Mr. Dennis
Smith, rh Mr. Andrew
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Taylor, Ms Dari
Thomas, Mr. Gareth
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Turner, Mr. Neil
Vaz, rh Keith
Waltho, Lynda
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Wills, Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wyatt, Derek
Tellers for the Noes:

Mr. Bob Blizzard and
Mr. Wayne David
Question accordingly negatived.
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