What a joke of an economics correspondent Larry Elliott of The Guardian has become. He splashes that" secre"t Treasury documents reveal that the budget cuts will cost 1.3 million jobs. Shock. Horror. The end of the world is nigh. Nasty Tories. Thatcher. Milk Snatcher.
Then, in the middle of the story, comes this sentence...
The Treasury is assuming that growth in the private sector will create 2.5m jobs in the next five years to compensate for the spending squeeze.
Now, I know that maths is not my strong point, but even I can work out that 2.5-1.3 = +1.2. So explain how that is a rise in unemployment, Larry. You prat.
Either you believe Treasury figures or you don't. If you believe the ones which say 1.3 million jobs will be lost, surely you then believe also the ones which say 2.5 million jobs will be created. Alternatively, you can believe neither. What is inconistent, is to believe the one you want to believe and not the one you find inconvenient to your argument.
UPDATE: For the record, I don't believe the 2.5 million figure either. But even if it's nearly 50% out, there would be no net fall in employment. Oh, and by the way, for any lefty economists reading this, you might like to remember that it's not budgets which create jobs, it's private sector risk taking entrepreneurs. Think on that.
54 comments:
You're conflating two statistics which aren't necessarily correlated.
I would argue the job losses are far more predictable (in particular the public sector jobs as RDAs, Local Government and Council roles are pared back). However the statistic in the sentence you highlighted is predicated on the private sector being able to 're-provide' 2.5m jobs, which I strongly suspect it would never be able to do.
To be honest, I expect a net loss of jobs. The economy and job market the way it is, it'll be another 12/18 months at LEAST before the private sector is in a strong enough position to even be able to start ramping up to the number of new jobs required to balance the sums according to the maths.
However, I readily accept that, as someone on the Grauniad comments wrote,
So the Treasury predicts 2 things:
1) 1.3m jobs will be lost
2) 2.5m jobs will be created
So an equally valid headline, based on the same source data, would be
BUDGET WILL CREATE 1.2m JOBS
I don't think that'll happen though!
And stop being so hysterial about everything. Half of news is interpretation of statistics to derive a headline, and the Grauniad's not half as bad as the red tops who extrapolate worst-case headlines on a daily basis.
But since when has the Guardian done anything other than pursue its anti-Tory agenda?
Besides, we all know that jobs can only be created by the state and never by business. "lol"
And the key point here as we discussed in our podcast is the ability for small businesses and the private sector to get back to doing what they do best - wealth creation, which in turn creates jobs.
Thats what Labour never got.. Government does not create jobs.. its businesses that do.
Iain, I sincerely hope you are one of the many made redundant. No doubt you will also be one of the lucky ones to find new employment, perhaps in the food packing industry. Certainly regurgitating low quality spam for consumption by the masses is something that should come naturally.
More seriously, are these new jobs likely to be appropriate for the people made redundant? WIthout government support, I really doubt it.
Not sure one follows from the other there Iain... Given we have nothing concrete to go on until the CSR in October, we might surmise that cutting departmental budgets by 25% will cut jobs, it is pure speculation as to how the market will respond.
Personally, I would think twice before taking on Larry Elliott, even if he does (like you and I) work for the Guardian...
No, Fairness, it's mugs like me who risk our money to create jobs for prats like you.
In the last two years, my two businesses have created 15 jobs. Not because of anything the government has done, but through my endeavours and those of my investors.
So, i doubt whether you'll get your wish of me making myself redundant. No doubt you hope my business crashes to I can make the other 15 redundant too.
What a spiteful, vicious thing to write.
Er, Mick, since when did I ever work for the Guardian! Must have passed me by.
@fairness - The question are will any of these new jobs help pay of the crippling debt Labour have enslaved us and our children with.
Government has become an oversized parasite so large and wasteful that its staving the rest of us of the financial life blood we need to survive.
You need to wake up ( unless your one of those people on the left who's real end is to destroy society as we know it and impose totalitarian socialism with a revolution - in which case all's going well for you till very recently ).
The effect of the budget is the loss of 1.3 million jobs. The effect of economic growth - which will not be improved by this budget - and a growing labour force - which is totally unrelated to it - is to create 2.5 million jobs. Subtracting one from the other is like pleading innocent to arson because it happened to start to rain.
Please attempt not to make such elementary errors in future, particularly if you are also going to call people innumerate prats.
Iain, although the budget might not directly create jobs - it surely hasn't filled investors with confidence. The priority should have been growth in employment and enterprise - but there have been some odd measures. Such as reducing capital allowances to pay for an across the board corporation tax cut.
PS: let's not forget that without the labour of your employees it would not be possible to accumulate capital...
Iain, obviously I'd not hope you get made redundant or indeed wish anything bad on you. However, despite being one of these swashbuckling entrepreneurs that everyone goes on about, creating the wealth that gets this country out the mess, several of my family and friends are going to be put out of work. Is this their fault? Are they stereotypically lazy slackers living off my efforts? No, they work just as hard as me, they just do a job. Cut deep, cut fast. Maybe. We'll see, but I just find this attitude 'it's only public sector jobs' quite sickening, tbh.
No one, least of all me has said 'it's only public sector jobs'. But the fact is that it is the private sector which will get us out of this recession. The public sector has got too big a part of the economy in too many areas, and too bloated. There has to be a correction. If Labour had won they would be doing similar things.
Good rebutal to that "fairness" chap. So funny how lefties gran terms that are the inverse of their reality.
What Fairness also does not consider is that those new jobs might not employ those made redundant, but could employ any number of people currently unemployed. But "fairness" does not consider that, he only has thoughts for those currently in work. How nice. How "fair".
I think that the trouble is this: the "opportunity cost".
Everyone can see the government's immediate actions, but not their secondary consequences. All can see the firing of 1.3 million, no-one can "see" that the release of red tape and increase in available capital then gives 2.5 million new jobs.
@ Fairness
"More seriously, are these new jobs likely to be appropriate for the people made redundant? WIthout government support, I really doubt it."
Are they really all that incapacitated? Are they so intellectually vitiated that MORE money has to be thrown at them? I assure you, sir, the rest of humanity has more get-up-and-go than your paltry offering. One can see that you're in the public sector; you seem to represent everything bad about it!
Remember that headlines are written, usually in a hurry, by subeditors NOT by the author of the piece.
They are designed to attract attention, NOT to summarise the article.
Christopher's advice is sound:
STOP BEING SO HYSTERICAL ABOUT EVERYTHING.
"What is inconistent, is to believe the one you want to believe and not the one you find inconvenient to your argument."
I think you're being harsh there, Iain. Such an approach is the only thing that is keeping socialists alive.
If you had only had a few straws to clutch, wouldn't you?
Johnnie Marbles: "which will not be improved by this budget"
How many people do you employ, Johnnie?
If it's not budgets that create jobs, then why are the tories planning on borrowing £550 billion off-balance sheet to create jobs?
@Iain,
Okay, so my first comment was crass. I tend to get hot under the collar when people start talking about jobs as though there aren't real people and real families who rely on them.
My point - badly expressed - is that with jobs, you can't simply say -1 + 2 = 1. The issue isn't simply how many jobs there are, but who is employed by them.
I have my suspicions that if you make 600000 public servants unemployed, they are not all going to find new work quickly. As you know, most will be talented and hard working, but have a skill set that does not necessarily help expand industry and commerce.
And what if many of the new jobs go to people who, following the recession, now need a second one to keep their family together? What if they are blue collar, will white collar workers easily adapt? And is there anything to stop the trend of most new jobs going to young migrants from across the EU?
But I suppose what I was getting at was how you would feel if you were made unemployed and could only get work that didn't meet your skill set or expectations. I think I hit a nerve. No doubt you will understand then why those of us who work in public services also get defensive.
Of course, Iain, you are someone who has had failing companies before, picked yourself up and started again. All credit to you and people like you.
Some people, however, will need a little extra help to pick themselves up again. I think the Government would do well to remember that.
not sure you can compare the figures.
The government can by and large control the public secotor and how many people works for the public sector etc.
The government can't control what happpens in the private sector, yes they can make things more favourable by being nice on tax but it is harder to control and therefore harder to predict how many jobs will be created.
The all do the same with climate stats. Ignoring the ones that dont fit.
This blog and every single comment posted is as out of touch with real society as the media that feeds it and the government.
You may now continue with your middle class cock fighting.
both the private and the public sector create jobs. A teacher in the state sector has a job in much the same way as a teacher in a private school. Similarly an NHS and private doctor
The BBC has also, predictably, made the same announcement, and made it twice as a headline on different sections.
http://news.bbc.co.uk/1/hi/uk/10457352.stm
For all the prats saying we can't and shouldn't lose these jobs, there is a turnover of 440,000 jobs in the public sector anyway, as Cameron said a month ago, so no need for compulsory redundancies. Three years the Government can get rid of the 1.3 million wastrels just through natural wastage.
But of course, like that prat Larry Elliot, pointing out reasonable things like that doesn't fit the agenda does it?
Got get 'em Iain.
The other point is that Labours cuts would have cost public sector jobs as well. So even if you want to look at the gross figures yo must first subtract the labour job losses first.
And of course the guardian forgets the small matter of the national debt heading for over 1.4 trillion.
The Public sector is far too big and needs to be culled, as painful as this may be to those who work there. The country simply cannot afford to continue supporting it. Those who are made unemployed will just have to adapt and get employment elsewhere. Harsh as that may seem it is the only answer if, as a country, we are going to move forward.
I used to work in the Public sector, over 15 years ago. I did a degree and got a job in the private sector, as I wanted to better myself and move on. People have choices and need to take more responsibility for their own lives.
It's certainly not fair that those employed in the public sector (over 50% of the 'working' population, it seems) and all those who are unemployed or 'economically inactive' are being totally subsidised by those who are employed in the private sector. Where's the fairness in that?
This is method the left will use to destroy the coalition. Every attack from Labour is to chip away the Lib Dem glue holding them to the Tory party.
Brown pursued a policy of turning the UK >England< into East Germany, socialist Scotland & Wales are further ahead.
While chancellor Brown put obstacles in the way of business forcing them & entrepreneurs to shift production and move to other countries india / china.
I believe this warped logic from Brown was due to him spreading the wealth around to bring these countries up to a certain standard.
What he and Labour failed was the good people of England.
Instead of a job creation drive through lower tax and less official paperwork he plied on more, the use of NI was truly the worst stealth tax on business and jobs than anything the Tory/Lib dem propose.
Ask yourself a question is a five a day merchant on £25k positive for the country? the answer is NO.
Everything Labour did was political posturing to create a socialist utopia and part of their socialist experiment agenda.
Maggie had to switch the economy from manual to a modernised economy, Cameron has that task again, after 13-years of the sovietization of England.
We must take the union out, the left out and highlight every eror they made, we cannot allow Labour to get away with cleansing of their record in office.
I suspect if we did a trawl of soviet spies in the UK we would capture deep under cover agents like Brown, Balls, Darling, Ashton it is time for a Mccarthy hunt for these fifth column activists.
mat - of course its not the fault of your friends if they lose their jobs.
But as far as the public sector (and indeed parts of the private sector are concerned) these jobs have been created and sustained in the first place by an economy founded on a false prospectus. labours false prospectus.
They are jobs founded on unsustainable borrowing. Borrowing which Gordon Brown knew he could not repay. So as economic gravity reasserts itself its inevitable that jobs will be lost.
And of course the public sector borrowing which has sustained these public sector jobs did in its turn suck money away from the private sector.
BTW You are the innumerate pratt Mr Marbles. the budget set the course for the economy which create jobs.
Labours cuts would have cut public sector jobs, so the Guardian should have been looking t]at the net comparison.
'Job losses' of course may well mean simply a freeze on recruitment and early retirements, not redundancies. Redundancies may come from the outside consultants employed by Labolur at so much expense.
Bottom line is the (self serving) Guardians headline is a bag of crap.
"I have my suspicions that if you make 600000 public servants unemployed, they are not all going to find new work quickly. As you know, most will be talented and hard working"
Hahahahahahahahahaha!
I think you show that any intelligence you have is easily cast aside by your desire to insult and belittle ( as we see on your TV performances ).The 1.3 m job losses is something the Govt has control of and is therefore more likely. The 2.5m new jobs seems entirely speculative. The significant point is that whilst Cameron pretends that by pension changes etc public sector jobs can be kept and not lost, the prediction of the total jobs lost by the cuts is not being made public. The Guardian article does us a service by making it known.
In the US the Health System is mostly in the private sector. In the UK we (much more efficiently) have it in the public sector. Jobs are created by both systems. It is simply ludicrous to say the American Health Care system creates "real" jobs but the jobs in the UK system are not real.
As mentioned above (and subsequently ignored) you haven't got the gist of the story. 1.3million jobs will be lost due to the budget cuts. This is a fact - the job creation figure is a projection. So saying, "there will be a rise in employment" is based on speculation, whereas the job loss figure is based on fact. This is basic statistics, and something that Larry Elliot and others seem to understand, but you don't.
And let's trace the roots of this back a bit. It started as a crisis in the financial and banking sector. This was then transferred through government bailouts to the private sector. Saying, "oh but the public sector is bloated", (and does anyone have any figures to confirm this? it always seems to be taken as a given) doesn't make it true. The public sector is overwhelmingly working class, whereas those who caused the crisis in the banking and financial sector are wealthy. The attacks on the public sector is a continuation of Tory class attack (something we've always believed you guys were dead against).
Ok This is my specialist subject.
The estimated figures are these
100-150 jobs lost in public sector
80-100 jobs lost in private sector on public contracts
This is per year.
Currently as of March 2010( latest figures) there are 498,000 unfilled advertised vacancies in the UK ( this takes no account of the unadvertised vacancies which are normally mostly in retail, catering and low level service industries)
Of the 2.1 million net new jobs created over the last 13 years 1.7 million were in the public sector and 1.4 million of those were filled by overseas workers ( source ONS)
Therefore a large number of public sector redundancies will return home or move to follow the job market in another EU country with Sweden and Norway being popular destinations at the moment.
@Christopher
I'm not as pessimistic as you, job vacancies are already rising and purely by lifting the dead burden of the state a lot more private jobs will be created.
If we reduced the burden of anti employment legislation, payroll taxes and corporation taxes for start ups that would create lots of jobs.
If we repealed IR35 that would create 350,000 new businesses instantly
Also bear in mind that things have changed. We no longer have giant companies employing hundreds of 1000s of workers.
We now have people like @Iain Dale entrepreneurs running small businesses each of which employ between 2-50 staff.
In Kent where my business is based we currently have 56,000 SME's and 28,000 unemployed so if half of them could be encouraged to employ ONE more person each most of the problem would be eradicated
@fairness
twat
@Paul Halsall
What's the US got to do with it?
We have nurses employed in the private sector in the UK.
I don't think anyone disputes that the NHS jobs are real it's the funding/costs that are unreal.
So this is how it works.
Private nurse earns wage and pays tax and NI along with employers NI
The tax/NI is used along with everyone elses contributions to fund workers in NHS.
The NHS nurse gets a salary that is also taxed and NI as well as employers NI HOWEVER this is the important bit that tax take is NOT extra money so although it appears in the spending figures it is not new money. Do you know that the NHS budget for employers National Insurance is £446 million per year, that's right the NHS immediately loses half a billion pounds of it's yearly budget just to give back the money to the government which gave it in the first place.
This is known as rearranging the deckchairs and is why public sector funding is a downward spiral
It's not budgets which create jobs, it's private sector risk taking entrepreneurs.
So it's a shame we've become one of the most risk-averse societies in the world, really, especially since recessions intensify risk aversion anyway. I mean, we've been in or barely escaping recession for the last couple of years now, and unemployment... well, it hasn't fallen, has it?
Anyway, your argument that "if one set of Treasury figures is right, they all must be" makes about as much sense as claiming that if one story in the Guardian is false, they all must be. In any case, even if 2.5m jobs are created (and you admit they won't be), that still only creates 1.2m new jobs. Which still leaves us with 1.3m of the 2.5m currently out of work, plus the 1m kicked off incapacity benefit - that's getting on for two and a half million people - with no chance of getting a job at the very best possible time for doing so, and left unable to feed or house themselves on ever-decreasing benefits. How is that acceptable?
Poor old Hattie caught a bit of a cold over this by only quoting LE's figure. Pity she's not going to be the new leader.
So the Haridan shot down in flames as it turns out labours budget would have cost MORE JOBS !!!
Dear All.
I've just received the latest ( June 2010) UK Labour market report
Permanent Employment vacancies ROSE for the 8th consecutive month. Temporary vacancies ROSE by 2% but this was slightly down after the previous month .Interestingly the number of registered jobseekers FELL by 4%
The Guardian figure is an estimated number of public sector redundancies based on across the board cuts in budgets over 5 years.
Now if I was running a public sector organisation before cutting permanent staff ( which is an expensive undertaking) I would look to cut costs elsewhere first.
So out would go management consultants and temporary staff.
A headcount freeze and non replacement of leavers/retirers
I would cut back on all the overspending on non essential equipment, office furniture, I would drastically reduce advertising/marketing and communication spending etc.
I would focus efforts on core business
Fairness said: ... are these new jobs likely to be appropriate for the people made redundant?
There would be no point in abolishing five-a-day lesbian human resources managers, only to re-employ them in the private sector doing the same kind of "work".
The fact that the Guardian seems to be winding up Iain Dale among others is positive. Nobody would be paying this such attention if it didn't have a grain of truth, would they? Will the private sector be creating jobs in schools and police forces?
One should not forget, however, that the Guardian holds a certain responsibilty for this budget as, shamefully, it is a Liberal Democrat supporting newspaper!
Two jokes:
1. The late Eddie George said that there were three sorts of economists: those that can count and thiose that can't.
2. There were two antiques dealer and a Sheraton chair on a desert island and they both made a tidy living selling on the chair to each other.
One question:
If a company wins a contract to supply a government department with widgets, why isn't the company pilloried for making a profit out of taxpayers?
Guardian stats and article are an offshoot of its own internal revenue forecasting. What terrifies the Guardianistas is the likely huge decrease in advertising revenues.
Well it suits me. Taxpayers' monies should not be used to fund the Guardian's owners and employees lavish lifestyles. Let the Guardian make its money like any other 'newspaper'. Anyway, why can't all these positions be advertised in the JobCentres?
As to 'secret' - were the documents marked as 'secret'? If so, why is the Guardian publishing State secrets? And why is the State not siezing all its assets and detaining its editor in police custody for questioning over suspected treason?
@Libertarian: You said
"Now if I was running a public sector organisation before cutting permanent staff ( which is an expensive undertaking) I would look to cut costs elsewhere first.
So out would go management consultants and temporary staff.
A headcount freeze and non replacement of leavers/retirers
I would cut back on all the overspending on non essential equipment, office furniture, I would drastically reduce advertising/marketing and communication spending etc.
I would focus efforts on core business"
DON'T BE RIDICULOUS - THIS IS THE PUBLIC SECTOR WE ARE TALKING ABOUT AND WOULD REQUIRE PEOPLE RUNNING IT TO KNOW THE FIRST THING ABOUT COST CONTAINMENT IN A BUSINESS!!
@Steve C "I would focus efforts on core business"
The core business of the Civil Service is to implement government policy. Civil Service Departments and Agencies are accountable to Parliament through Ministers and Chief Executives. It is up to Ministers, with the assistance of Civil Servants, to identify the core business of government.
Contrary to your opinion, the Civil Services is aware of budgeting, resource cost accounting, achieving value for money, benchmarking and every other business practice.
Dear Nicholas - the point is there is NO grain of truth in this story.
Its clear from the budget (and indeed the previous labour budget) that there were going to be significant cuts in public spending. Labours budget was based on public sector job losses.
Listening to Darling, his pathetic fig leaf - as he seeks to attack one budget whilst ignoring his own - is to talk about timing. But his own budget would have resulted in even MORE job losses.
So the reality of our economic situation is not some unique product of a coalition budget. Its the result of the coalitions economic inheritance.
@Gallimaufry
Well if the civil service are aware of the things you say it's a shame they don't bother to implement.
One look at defence spending will show what a pigs ear they've made of that.
You can be as tribal as you like but avoiding the evidence of £1.4 trillion of debt makes you look a mug
Iain,
one million new Government jobs under Labour, during the debt fuelled boom years. One million jobs go to immigrants.
There is already a MASSIVE jobs crisis Iain. It has been covered up by Government debt.
90% of new jobs for women were Government jobs.
One million young people out of work.
80% of Graduates can't find suitable jobs to pay their debts.
And where are the magical new jobs coming from? China and India may be booming, but only because they take our jobs. Any hope they will support growth is complete rubbish. The goal of their Governments is to take jobs from the UK.
I think you're right to try to point out the the wave of job cuts facing the UK will not be the Conservatives fault. But I don't think you realise how awful our economy is.
@lance - the figure that proves the public sector is too big is the massive deficit and runaway national debt. As a country we can only have public services if we generate the wealth to pay for them. Paying people to to do non wealth generating work when you do not have the money creates debt not wealth. Sadly, whether they are talented and work hard and whether their work is helpful to society or not is irrelevant to this fact. Some on the left suggest the answer is to raise taxes. Unfortunately there comes a point when raising tax rates actually lowers tax revenue because you can't compel people to stay in the country, earn the maximum they could or to sell assets so as to incur tax. We are pretty close to that point now. Labour wins elections by saying they will 'give' us more schools, hospitals, teachers, nurses etc - as though they were some sort of benevolent uncle and there was no consequence to their 'generosity'. It's very seductive - but the truth is over time their policies damage wealth creation and rack up spending which results in runaway debt. This then has to be reversed to stop the country going bankrupt. It's the poor that suffer most of course - because they are the ones most dependant on the government's unsustainable borrowing. The banking crisis did not cause any of this - it just accelerated the cycle. In addition to all the revenue Labour spent a lot of their capital spending is off balance sheet in PFI deals so not even included in national debt figures. It's lovely to have all these shiny new hospitals and schools but the reality is we've not paid for them yet. It's the equivalent of buying a hospital on a credit card. The repayments, including massive interest, become revenue expenditure in future years which impacts on the employment budget when overall budgets are frozen or cut. What we have to do in this country is to focus on building up wealth creating businesses and getting more people into productive employment. That is the only way we can afford the lifestyle - including public services - that we all want. Nobody owes us living, we've all got to earn it and at the moment we are simply not doing enough wealth creating work in aggregate to support ourselves and all the people in the country who are providing services to us or, for reasons of age, infirmity, parenting or unemployment are doing no paid work at all. This is a problem for a lot of countries not just the UK. Too much of the real wealth creating work is being done in the Far East and economic reality is beginning to catch up with us. We are no longer earning the money to pay for all the things we think we are entitled to. We can march in the streets but it won't change anything.
I have read that 400,000 people leave the public service for one reason or another each year. If that is true then it will not be necessary to make even one worker redundant in order to hit the target.
What we have is firstly a jobs freeze. That means that no new posts can be created. It does not mean that no people will be employed to fill vital vacancies.
These are self-evident matters but it suits the agenda of those who oppose the Coalition to paint a different picture.
Apart from the politicians who are wedded to ever-increasing government expenditure we also face the vested interests of Police Chief Officers who talk about losing 120,000 police or closing down 450 police stations - arrant nonsense. Equally nonsensical is the BMA whose mouthpiece talks about having to close some hospitals. Then we have the Trade Union leaders. It is hard to see why they are worried since they are dedicated to non-work.
Between such prophets of doom they have forecast about 20-million various job losses - so that is everybody in the country who works. Is that an exaggeration? Perhaps so but then so are also their inflated claims.
I don't think 400,000 people will leave the public sector because they often leave for other jobs in the public sector.
I think most new employees in the public sector have been immigrants or women.
New public sector jobs have often been low paid, certainly below public sector salaries.
Well paid private sector jobs are often outsourced or automated.
Most of our trade goes to the EU and US. Both these regions are deleveraging and contracting.
I just can't see a net 1.5 million jobs being created in the private sector over the next 5 years.
Unemployment will go up and the UK will have to start down grading it's standard of living.
Non farm payroll tommorow. Could be a shocker.
I think house prices will fall later in the year once we understand how global deleveraging is causing GDP and wealth to contract as debts are paid off.
@Victor NWKent
I totally agree and it's about time that these people that make the doom statements were held to account.
1. If they are running an organisation and their first instinct when ordered to find cost savings is to cut the front line then they should be sacked for incompetence.
2. It's about time the media grew some and started to challenge these people rather than just let their eyes light up with a pathetically easy headline
@javelin
There are currently 49l8,000 unfilled job vacancies in the UK. Permanent job vacancies rose again in June for the 8th consecutive month. Temporary job vacancies rose again but at a lesser number than in May.
The number of jobseekers fell 4% in June.
There are jobs, there always have been jobs, there will be more jobs, it's just people have got to make an effort to look for them and apply for them and that means more than going down the jobcentre and asking if they've got any
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