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The next item is evidence taking on two nominations for appointment to the Scottish Fiscal Commission. As members will be aware, the Cabinet Secretary for Finance and Local Government recently wrote to the committee, nominating Dr Eleanor Ryan and Justine Riccomini as SFC commissioners. Members have received copies of the nominees’ CVs and the personal specification for the roles, and we will take evidence first from Dr Ryan and then from Ms Riccomini. We have around 50 minutes for this item.
I welcome Dr Eleanor Ryan to the meeting. First, Dr Ryan, I congratulate you on your appointment, subject to parliamentary approval.
I note that in paragraph 10 of your statement you say that your consultancy business depends heavily on effective communication. Does that extend to having submissions with fonts of sufficient point size that you can read them? One of the concerns that I have about your submission, and that of your fellow applicant, is that the writing is so tiny that, short of a magnifying glass, I would not have been able to read it. I had to get the clerks to increase the point size. It might seem like a minor point, but it is certainly significant.
I bet that you did not think that you would be asked that.
Good afternoon, convener. I am very sorry about the point size.
I will move to the main point that I want to ask about. What direction do you think that you can take the Scottish Fiscal Commission in? There is quite a difference between you and, indeed, Ms Riccomini, and the two outgoing professors, who are very much from an academic background. Your background is considerably different. Your CV is, of course, excellent; you were very much involved in the establishment of Revenue Scotland, which is, I would think, a really significant thing on anyone’s career path, and you also have lots of experience in the Scottish Government, where you were a director. What do you think that your imprint will be on the Scottish Fiscal Commission?
My understanding is that the decision to broaden the specification for the commissioners comes from the Organisation for Economic Co-operation and Development report on the commission and its recommendation that perhaps a broader skill set would be helpful.
I have spent many years in public finance, initially in the Treasury, and then in Scotland around the time of devolution, when I worked on the original devolution finance settlement. I had some other public service roles, including with the Scottish Court Service, and then I returned to finance and worked, as you say, on setting up Revenue Scotland and the early budgets where the fiscal framework applied.
Perhaps I bring—can I say?—a practitioner’s view. I understand how some of these things work within Government, and I hope that that will bring some richness to the commission’s analysis.
So, as well as bringing your obvious abilities to the role, you are looking at how, perhaps, you can broaden the Fiscal Commission’s outlook. Obviously, the commission has a specific remit, but do you feel that, even within that remit, the commission is allowed to explore new areas of work?
12:15
My understanding of the role of the commission is that, yes, there is scope for it to do more, and the OECD recommended that it did more work on sustainability of the budget. I caught just the end of the discussion that the committee was having this morning, but I know that there are a lot of very complex issues here. A Government budget contains a lot of moving parts, so choosing which things to look at is probably as important as the analysis itself.
You could, of course, analyse everything, given enough time and enough resource, but I doubt that that would be helpful to the committee, and I doubt that it would be helpful to Scotland as a whole in understanding what is going on. It is about finding the things that are critical and trying to analyse and explain them as clearly as possible.
I have one last question, because I know that colleagues are keen to come in, and it is on the issue of communication, which I have already touched on this morning. The OECD has said that relative to, for example, its Dutch equivalent and one or two others, the Scottish Fiscal Commission, although doing an excellent job at all levels, could do more to broaden its impact on the Scottish media and the wider public. I know that that is pushing a lot uphill, because I am not convinced that the majority of people in Scotland are necessarily interested in the fine points of the commission’s deliberations, but what can you do to enable the Scottish Fiscal Commission to have a bigger impact with stakeholders as well as with the wider public in Scotland?
I agree that that is not an easy thing to do, but it is extremely important. I do not think that it is particularly important that people think about the Fiscal Commission and its role, but it is very important that there is good, transparent and accessible analysis out there to help people understand what are very complex issues, such as climate change, budget gaps over time, tax choices and so on.
My experience is that if you want to reach some of the groups whom you do not traditionally reach, you have to ask them things and work with them. You have to go and find people, talk to them about what is possible, hear from them about what they are interested in and navigate a way through. My experience is that, if you want to communicate with different stakeholder groups, you have to ask them what works.
Thank you very much.
I should start by saying that, compared with the convener, I have fewer concerns about my eyesight.
What do you believe are the most significant medium-term risks to the Scottish economy?
Oh my. With the caveat that I am not an economist, I think that there are some known issues about productivity and demographics, which Scotland to some extent shares with other western economies. However, the health issues in Scotland are, I think, more acute. Also, there are big technological disruptions going on at the moment with the rise of AI, and I do not think that we understand fully what that will do. It could be a great benefit, or it could be a disbenefit. Obviously, there is also climate change, which everyone is having to grapple with. I do not know whether these are all necessarily downsides, but they are all big issues that need to be addressed.
How do you foresee the impact of those challenges flowing through the fiscal framework?
Through the fiscal framework?
Yes.
As you know, the big issue with the fiscal framework is that everything is calculated for Scotland with reference to the UK, so we need to think about how Scotland chooses to respond relative to how the UK chooses to respond to some of these things. The UK might make certain tax-and-spend choices; for instance, we heard recently about an increase in defence spending, but we do not know yet whether the UK Government will fund that through, say, tax increases or cuts to other spending. Because we do not know that, we do not know how it will flow through the fiscal framework. It is the same with the response to climate change and tax-and-spend choices that the UK Government makes in that respect.
One of the challenges for the Scottish Government and the Scottish budget is that you want to be free to make choices and to use the powers that have been devolved and which are there, but you also have to be mindful of the impact of the choices made in Scotland relative to the choices that are made at the UK level. The Scottish Fiscal Commission can help a bit by unpacking some of that.
Thank you.
I will follow on from that point. You and your colleagues will produce forecasts for several years ahead, but something might happen in the current year that just turns that upside down. Will you not find that frustrating?
Yes, but that is the way of Government. The situation is exacerbated by the circumstances of the fiscal framework, but all Governments, including those of independent countries, can make their forecasts and then be hit with something that they were not expecting, such as Covid or an economic shock. The need to respond to whatever is happening and to new information that comes in exists in all systems, but doing that is perhaps just a little more complicated in this system.
Soon, we will have the UK budget, which will be followed by the Scottish budget. There will be a lot of time pressure in December and January. Are you relaxed about that?
Perhaps not relaxed, but I will absolutely be ready to help in any way, if I am appointed.
The convener asked you one of the things that I was going to ask you: the need for financial literacy throughout society. That includes the financial literacy of MSPs, but I will not necessarily ask you to deal with that aspect. [Interruption.] Well, that is the MSPs who are not on this committee, of course.
I noted the point that you made in your submission about communicating with very different audiences. To go a little bit further with that, as a society, should we be doing more in schools to get young people thinking about those things? How should we move forward?
I think that it is good to get more people thinking about finances at all levels and I agree that it would be sensible to start with young people. Again, it is not straightforward. When I was involved in Revenue Scotland, we did some work on tax and tax policy and on having conversations through Young Scot with young people about tax. Those pieces of work were interesting, but we needed to do more.
Should more be done in school? Many years ago, I had policy responsibility for the school curriculum, so I know that the answer to many things is seen to be to put more into the school curriculum. However, a finite amount of time is available. Of course I would like to see more education on financial literacy, but I appreciate that, when it comes to decisions on the school curriculum, it is quite tricky to fit everything in.
Who should be taking responsibility for that agenda? Should it be the Government, the Parliament or the Scottish Fiscal Commission, or should it be a mixture of all of us?
I would suggest that we all need to play a part in taking responsibility for that. The commission has an important role in being an independent commentator that provides input to help different groups in society—all of them, ideally—to understand and navigate some of those difficult things. However, I do not think that the commission could possibly do that on its own, and it is important that the Government and Parliament communicates well.
You used the word “independent”. You used to be very close to Government, if not part of it.
I was, yes.
Are you comfortable now being on a different side of the fence? You are independent now.
I have been independent for the past six years. I left the civil service in 2019 and I have since done work in Scotland and internationally. I have to write reports and present my independent view. I have become much more comfortable with that.
Do you consider yourself a poacher or a gamekeeper now? [Laughter.]
Good afternoon. John Mason’s last question was one that I was going to ask. Part of our responsibility here is making sure that we are guarding against groupthink. You mentioned the importance of the SFC being independent. That sometimes requires being pretty robust with the Government. You can take it either way when considering appointing someone who has extensive experience from within Government—you might consider that there is a danger of groupthink if you appoint them, or you might consider that they know where all the bodies are buried and they have all those years of experiencing frustration inside the system. If we assume that it is the latter, do you have any examples of processes that the Government undertakes, particularly in relation to the budget and its fiscal forecasting, about which, after leaving Government, you thought, “My God, why did we do it that way?”, or of processes that you are now excited to have the opportunity to put pressure on the Government to take a different approach on?
I was involved in the Government’s first medium-term financial strategy, and, indeed, in the second one. I know that that has continued to evolve since I left. You have been discussing some of that recently. A lot more that could be done to set out more clearly what the direction of travel could be, what the choices are and what the Government is intending to do. I would love to see that built on and expanded.
Are there things that I would want the Government to stop doing? It is not really a case of it stopping doing things. We were talking about transparency earlier. Transparency is complicated, because it is not just about putting out lots of information. The Government does, in fact, publish a lot of information, but more could be done on publishing information in an accessible form, and I would be delighted to work with the Government to improve the accessibility of the financial information it publishes.
On the MTFS, as an example, you were talking about laying out options. By that do you mean that the Government should set out clearly what its intentions are or that it should provide scenario planning, setting out the options that would be available over the long term to close the fiscal gap, either through spending cuts or tax rises?
There is merit to both approaches. It would be valuable for the Parliament and for the public to know what the current Government’s intentions are, but, particularly in terms of the public economic literacy point that the convener mentioned, it is also important to understand what levers are available to Government, regardless of which lever any Government at any given time pulls on.
The medium-term financial strategy document will never be the full answer—things like spending reviews and the budgets that are presented are the full answer—but it should show a direction of travel. There is value in showing scenarios or highlighting different possible choices, but, equally, that is something that the commission can do. There is something for the commission to do, working with this committee and with the Government, to try to ensure that the overall picture is presented and people understand what choices are possible so that they can then put the final choices that are made into context. That does not all have to be done by one or the other.
Thank you for joining us. I read your CV with interest as well, and there is no denying the depth of your hinterland. Following on from Ross Greer’s question, to what extent do you regard your depth of knowledge, which you have built up over many years, as an opportunity and to what extent do you regard it as a risk? You are steeped in a prevailing culture of thinking, particularly linking back to the Treasury, whose tentacles reach everywhere.
That is a very good question. I have had some time to be outside of Government and to see things from an external perspective. I have been lucky enough to work overseas with some World Bank teams on aspects of public procurement and so on, and to see how things work in other countries. I would not try to suggest that the way that the Treasury does things is the only way or the right way. I understand why many things are the way they are, but that is not the same thing as thinking that they ought to be that way.
12:30It would have been a big risk to go from Government straight into a role like this, but having had some time to be independent and think about it, I hope that I would bring a much more balanced view. Of course, were I were lucky enough to be appointed, I would not be the only member—I would be working with two very experienced economists and with another member of the commission.
One of the things that I understand to be a strength of the Scottish Fiscal Commission is the debate, the challenge and the testing that goes on within it. Therefore, I do not think that I would be a huge risk, because there would be other points of view to balance mine, and my own views are more balanced than they were.
I remember bringing up the need for women commissioners with Graeme Roy, probably in 2021. Many people are blindsided because they forget about systemic issues flowing through economics that affect women, and we tend not to gather supporting data that allow for various hypotheses. In my opinion, Professor Roy has done a very good job thus far in starting to broaden out the work of the Fiscal Commission. What do you think that you can bring to the table in that regard, because it still seems like there is quite a gap because we do not always ask the question, “What does the data tell us about women?” If we do not have that data, we need to ask what we can do about that, because we need to understand what the systemic issues are before we try to change them.
I am sure that you will be well aware of the wonderful book by Caroline Criado-Perez, “Invisible Women: Exposing Data Bias in a World Designed for Men”.
Yes.
I was very lucky to hear her speak about it on one occasion. I absolutely agree with you. We are quite bad about collecting data, not just in economics and finance but in many areas, to enable us to understand the impact of measures on women, and, indeed, the impact on other groups in society. It is a very important question to ask, and something that I would be very happy to explore with the commission if I were appointed. I do not know what I can do at this point, but it is definitely something that I would be interested in.
Should you be appointed, you can look forward to being asked about that by me in future sessions.
That is fine.
Thank you very much. That has concluded questions from the committee. Are there any points you wish to make? Is there anything that you feel we should know that we do not already?
Only to say that it is such an honour to be here, and I would be delighted to be appointed if the committee considers that to be acceptable.
Thank you very much for that—and for your attendance today, which we really appreciate.
We will have a short break to allow for a changeover of witnesses.
12:33 Meeting suspended.
I welcome Justine Riccomini, who has also been nominated as commissioner to the Scottish Fiscal Commission. As before, we will move straight to questions.
You really will be going in at the deep end here. Just a few days ago, we found out that the UK budget will be on 26 November, which is probably later than was envisaged. Many of us thought that it might have been a couple of weeks earlier. What does that challenge mean to you? How do you feel that you and your colleagues will respond to it, if you are appointed?
Good afternoon, and thank you for inviting me to this hearing.
The budget date shocked me, and I have been in tax for 37 years now. It was a pretty shocking late date. On my potential role at the commission, we will basically just have to cancel Christmas, because there will be a lot of work to do over that period. However, that is okay—it is only one day.
How might such a late date for a budget impact on scrutiny, not just by this committee but more widely?
I have always advocated to the UK Government that it should try to produce budgets in the earlier part of the autumn, if it can, because of the impact on the devolved nations and their ability to prepare and debate the necessary issues before the end of the tax year. That is especially the case with income tax, for example, as the rate resolution needs to be passed before 6 April.
A late budget brings its own stresses and issues. You probably have to react more quickly, analyse things with alacrity and make sure that you are responding in a responsible and stable way.
I understand that the devolved Administrations were not advised of the change of date, let alone consulted. You have excellent relationships with other devolved Administrations, such as the Welsh Government. What advantages might that provide to the Scottish Fiscal Commission in the work that you will do if you are appointed?
The relationships that I have had in my tax policy role over the past decade have been fantastic. I have had an opportunity to collaborate with and be a trusted adviser to Scottish Government and Welsh Government officials, working with my colleagues and counterparts around the UK in organisations such as the Chartered Institute of Taxation or the Low Incomes Tax Reforms Group. I have made lots of good and stable connections that I can probably call on in future, because I have been to the meetings and I know the people.
In the past year or two, the Scottish Fiscal Commission has expanded some of its area of work and has produced important documents such as those on long-term fiscal sustainability and climate change. Are there any new directions that you feel that you could take the Scottish Fiscal Commission in, to do something in another area of work or with a new focus?
At the moment, I do not know the inner workings of the Fiscal Commission, because I do not work there. There would be an opportunity for us all to collaborate and bring new ideas to the table.
You mentioned climate change and sustainability. In those areas, there is a real opportunity for Scotland to become a world leader in renewables and things like that. Scotland has already made a huge mark on that. There is potential to work out how that can productively raise money and increase the benefits to the Scottish economy.
Thank you. Colleagues are keen to come in.
Hello, and thank you for joining us. I noticed on your CV that you are a non-executive board member of Paragon Music Ltd.
I was, yes.
That is slightly different from all your other experiences. What was your interest in that and why, given that it is slightly different?
I am a trained classical singer, so I can sing opera. I will not do it right now, you will be glad to hear.
I became involved with Paragon because I was singing with a quintet of musicians and one of them—the bassist—was the chief executive officer of Paragon Music, so he invited me to be on the board. Because of my knowledge in areas of tax, HR and employment law, I led on that for that organisation while I was a non-exec there. It was really rewarding.
Do you think that that alternative experience—I suppose that one might refer to it as cognitive diversity—is something that you will be able to bring to the perhaps slightly dry subject matter of the Scottish Fiscal Commission?
Dry? I find it thrilling.
We find it exciting, but hey.
I keep telling people that tax rules the world. I am not sure that they believe me, but it does.
My experience of working with Paragon was mind-changing and it broadened my horizons as an individual. None of my family members or friends has any disabilities or learning difficulties or any of those things, so it was wonderful for me to work with the people involved in Paragon. I thoroughly enjoyed it. All the experiences that I have had throughout my career to date have taken me in many different directions, and I can now call on those experiences and use them wisely and effectively at the Fiscal Commission.
In your application, you make the statement:
“I have called out bad or dishonest practices.”
Obviously, I do not expect you to cite individual examples, but I am interested that you deliberately chose to do that. I do not want to put words in your mouth, but I am interested in your view of ethics and why you put that in your application. It would be useful to understand a bit more about why you felt that that was sufficiently important.
As far as I am concerned—and I hope that other people also think this—I have a very strong moral compass. I have always had that; I imbibed it from my parents. I have always upheld very strong ethical values. I appreciate fairness and diversity and people being treated according to their needs and abilities. That is why I found my roles in HR and employment law consulting work so rewarding—I felt that I was able to bring something else to the party.
You were privy to the questions to the previous candidate, which were similar, but I will perhaps go on a slightly different tangent but in the same area. What do you believe to be the domestic performance issues rather than the global trends that might impact the performance of the Scottish economy over the medium term?
When I spoke to the interview panel, I put forward some thoughts on some of the main issues that might affect Scotland in the medium term. To build on what Eleanor Ryan said, I think that one of the issues—not just in Scotland but in other countries, although in Scotland it is particularly prevalent—is that of population decline. There is also the overall health of the Scottish populace. It was very interesting to catch the end of the previous evidence session. The 50-year forecast that the Scottish Fiscal Commission produced in 2023 set out some areas of concern and things to think about in that area.
That is a very important issue for me because, as a tax person, you need to know where your next tax base is coming from and how that tax base will fare. If people are falling ill at an early age and dropping out of the workforce, they are no longer taxpayers, so obviously the tax base is shrinking. In terms of tax and spend, that is an absolutely crucial point.
As briefly as possible, another point is about the comparative size of the public sector in Scotland, how that compares to the relative health of the Scottish tax base and how that all fits with spending priorities for the Scottish Government over the next few years. That trajectory is definitely worth looking at.
Thank you.
12:45
Until now, the SFC has focused on having economists as commissioners. Do you see it as good or bad that we are widening it out a bit?
I think that it is excellent.
Well, she is not going to say that it is bad—come on, John.
I am asking the questions.
How do you think that it strengthens the SFC?
I will be honest—I think that it is a really bold move. When you think of the Scottish Fiscal Commission and the four professors, you think that it is an economist’s world, it is about economics and so on. I think that Professor Roy has shown foresight in deciding to take forward the OECD recommendation, which is a step in the right direction. I really hope that, if I am appointed as a commissioner, I can bring something different to the table and think new thoughts, have new ideas and bring new perspectives.
In the interview for this role, we discussed the fact that, if you have four economists in a room, they are likely to talk about economic things rather than other influences—that is not necessarily groupthink, because the Scottish Fiscal Commission is not a bad or toxic organisation. I recognise that they are all absolutely brilliant and amazing people, but sometimes discussions can go down a path and stay there rather than somebody saying, “Hang on—what about this?” or, “What about that?” I think that that might be my role.
That sounds good.
We talked earlier about communicating with the public and experts, which is quite a big issue. The point has been made before, but the Fiscal Commission needs to relate to a very wide range of people. Do you have any thoughts on communication? I think that we feel that there have been improvements over the years, but it is still quite a challenge to get the public generally engaged in this space.
Yes—it is definitely difficult. I would classify myself as a tax geek, but people do not really want to talk about tax in Britain until or unless they are forced to do so or a brown envelope arrives on the doorstep and they have to face reality.
Amen.
Tax is never an easy subject to try to engage people in. As a tax practitioner, I know that trying to talk to a client who does not want to talk about taxes is pretty hard going. However, I think that it is vital. I started my new role at Tolley on 1 July but, when I was at the Institute of Chartered Accountants of Scotland, one thing that I constantly advocated for was to bring more clarity and transparency. It is not necessarily about simplicity; it is about explaining things to people about tax and finances and the economy in a language that they can understand.
I have to say that I applaud the Fiscal Commission on its reports, because the infographics are excellent and the language is fairly clear and plain. The man on the Clapham omnibus can probably get a fair grasp of what the commission is saying, as long as nobody asks about it afterwards and they do not have to explain it to somebody. There is a need for that in the whole of the UK. It would be a privilege to be able to try to expand people’s education in that area, without sounding condescending of course.
It is a big challenge, and it is encouraging that you see that as well.
You used the word “simplicity”, and I think that you worked for the Office of Tax Simplification at one point.
I did.
Was that successful?
It is not there any more, so that is a moot point. We did what we were commissioned to do by different chancellors. I worked for two different chancellors on two different projects.
So you were there a whole month then, yes?
Thank goodness, for me, it was not the shortest-lived one.
That was a great thing to do. Working with the guys at the Treasury, the Department for Business and Trade and HMRC and everybody else at that policy level was supremely interesting. I felt that the research that we did was extremely independent and unbiased, and that it presented the facts that ministers needed to know about. The deadline was always budget day, so that the minister could announce something in his speech. It is a shame that the office is not still there doing its job. I have been assured that its work is being imbibed into everything that is done now.
I am interested in the area, but I accept that it is not the SFC’s main thing at the moment. Thank you.
Good afternoon. In your statement, you said that you
“have no time for hubris and complacency.”
That is right.
I think that both of those lead to stagnation, poor decision making and ultimately a downfall. I suspect that interfacing with politicians in the next 12 months might be quite interesting in that respect. Particularly in relation to public finances and long-term projections, what impact will hubris and complacency have? How can the Fiscal Commission work with us to make sure that the Government displays neither?
As part of its corporate plan, the role of the commission is to make ministers as aware as they can be, given the information that they have to hand, of the risks that are presented, and not just financial risks but reputational risks—there are a lot of different kinds of risk. It is important to make sure that ministers are as aware as they possibly can be, so that they can make sound and rational decisions with the information that they have. They cannot do any more than that.
Can you think of an example of where you personally drew a minister’s or a Government’s attention to risks in clear and vivid terms? How responsive do they tend to be to that? Generally, they are smart people who are advised by smart people and sometimes they might be prepared to take those risks.
I will try to keep politics out of it, but I have had quite a lot of conversations over the years with ministers in Scotland and the UK, including in the House of Lords and so on, that involved giving them not necessarily the best news about what some policies had resulted in and bringing to their attention things such as behavioural impacts, which I think the convener mentioned earlier. You just try to talk to them in realistic terms without any need for argument or aggression or bringing politics into it. The facts should speak for themselves.
You are not in post yet, so perhaps you can be a little more open. To go back to John Mason’s point about simplicity in the tax system, I am aware that the Scottish income tax system has more rates than the rest of the UK, including a starter rate that goes from £12,571 to £15,397, which is just 1p in the pound less than the next rate. Various organisations, including ICAS, have said that complexity is not necessarily helpful in the tax system. Is that the sort of complexity that you would advocate that Scottish ministers look at again, given the relatively small difference that it makes to the tax take and to taxpayers?
Tax in itself is a fairly political subject and tax rates are extremely political and are not something that I have ever commented on before. In the same way, my counterpart policy people in other organisations did not comment on that, because it is just too political. However, you can paint a picture of what policy decisions might lead to and then, maybe a year or two down the line, look at the facts and figures and the outturn reports and see whether you can identify behavioural responses or complications.
Tax is complicated, and it is particularly complicated in the UK. As I said to Eleanor Ryan when we were waiting to come in, when I started in tax, the tax books were quite big and now they are much bigger, so we have not done anything to try to reduce the complication. However, there is a way of making a difference. When I have done webinars, seminars and so on for members, clients and other people—I have even spoken in universities and schools—I have tried to make a complex subject sound reasonably simple so that people can understand it at their level.
To me, it does not matter if you have six rates and bands or three, or even 10, as they have in France. It is about understanding what happens with those rates and bands and what people pay. That is what people really want to know. If you can make that fairly understandable, people will take it on board. However, the system here creates a little bit more admin.
Ross Greer is next.
I am good, convener. My questions were about the Office of Tax Simplification and the principles of simple systems, which have been well covered.
Okay. Thank you, Ross, and thank you, Ms Riccomini. Do you have any further points that you want to make to the committee before we wind up?
No. I will just kind of repeat what Eleanor Ryan said. I am absolutely delighted to be here. It is a great honour to even have been recommended for this role. If I am allowed to carry it out, I will do it to the absolute best of my ability and dedicate myself to it.
Thank you very much for that. We will decide in private session later this afternoon whether to recommend that the Parliament agree to the appointments.
That concludes the public part of today’s meeting. We now move into private session.
12:58 Meeting continued in private until 13:09.Air ais
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