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Topic Originator: The One Who Knocks
Date: Thu 22 Aug 09:52
It certainly isn't where we want to be but the per head spend comparison to the rest of the UK is misleading as London skews the figures for the rest of the UK.
And although my eyes were open
They just might as well be closed
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Topic Originator: DBP
Date: Thu 22 Aug 13:29
Also London skews the economy numbers anyway as its a national policy that has a city outside Scotland at its core
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Topic Originator: jake89
Date: Thu 22 Aug 23:48
Not one to stand up for the SNP (or any political party) but these stats are misreported.
If you remove the South of England, then Scotland performs better. Scotland spends/earns roughly the same as Yorkshire and the Midlands. The North of England, Wales and N.Ireland cost more than Scotland (a hell of a lot more in the case of Wales and N.I!)
What's odd is that one of the big spend locations is London. The England figure is always quoted as being around £1500 per head lower than Scotland but this isn't true if you compare London with Scotland. The expenditure is only slightly less in London.
This is odd as when money is split by authority in Scotland, the places doing well receive LESS and the places doing poorly receive MORE. Okay, saying poorly is unfair but, for example, Scot Gov spending in Edinburgh is around £1400, in Fife it was around £1600. In Glasgow it's far higher at around £2000 and once you get to rural locations with smaller populations it obviously goes significantly higher.
So London, as a compact, successful city shouldn't need all this money. The money should go to rural England and the poorer towns and cities in the North of England. With the cards stacked firmly in favour of London, why doesn't this change?
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Topic Originator: jake89
Date: Thu 22 Aug 23:58
Just to back this with some data from 2018:
Scotland: 10881
London: 10323
East Midlands: 8419
Average: 9350
So the incredibly successful London is getting almost £2k per head more than the East Midlands and almost £1k more than the UK average.
The figures also ignore differences between Scotland and the rest of the UK. One of the main ones being that we have a number of services in public hands that are privately run in England (so not included in the stats). One of the main ones is Scottish Water.
Another starting figure is that London gets over 20x more spent on its infrastructure per person than the North of England.
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Topic Originator: McCaig`s Tower
Date: Fri 23 Aug 00:27
Jake - don't have time to look at this in detail now, but I think one reason may be the split of population.
There are lots of young families in London, and hence lots of schools. That would drive up public expenditure.
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Topic Originator: hurricane_jimmy
Date: Fri 23 Aug 04:26
Always quite interesting to read through the GERS figures.
I have to admit I have major reservations about the way the UK tax system works and its sustainability. The high tax free allowance in the UK - about £1000pm - is basically strangling Government coffers in my mind. Although, arguably, this is a ploy that is often discussed - are public services in England being starved of cash to bolster privatisation arguments? Yes it can be argued that more disposable income in people's pockets is better for the economy but In my own experience that doesn't hold up when I look at my tax in Sweden and how it would be in a similar role in Scotland.
The system I now experience in Sweden is far more streamlined and fair. Basically I pay 32% of my salary (which I believe is split 20-12 between municipality/city and county - comes off as one and there's nae domicile-based tax) and in return have benefits that are far more comprehensive than in Scotland. There is minimum tax free allowance (I think roughly equivalent of £120ish a month) and EVERYONE working pays a tax rate at roughly this rate but it varies slightly from county to county and there is one higher tax band but really that only applied if you are on ridiculous money. The Labour laws here are stronger and wages higher so, this results in more money in governments pocket and it maintains and enhances people's level of disposable income. There seems to be Unilateral support across the political parties to this approach and amongst the populace - taxation is not such a big debate topic in contrast with Scotland where there is quite noticeable "middle class" grievance. Services are acknowledged as being good, albeit with room for improvement and people trust the government because of the quality of services. Oddly enough, even accounting for the higher cost of living, I actually have more disposable income here that I would in Scotland in relative terms in a similar job when I jot it up.
Basically if Scotland adopted a Nordic approach (Universalist Tax, Strong Labour Laws high wages etc) then I think we'd see a considerable difference in what GERS actually show. Granted the Nordic Kronors are all strong currencies and this helps offset the cost of imports needed for the health service etc, but I think its an interesting approach. I doubt we'd get that in Scotland though because you'd have the Progressivist whinging.
A general thought of mine is that it's ridiculous that we have any deficit in Scotland when you look at the Surplus of Norway which is roughly about $16Bn per year and you have Denmark which has a deficit of $2Bn. If, as other are saying, Scotland is performing better than other regions then its a pretty damning indicator of the UK Government Economic Stewardship.
Am I not right in thinking that GERS also includes Trident spending because it is an expenditure within Scotland? The cost is roughly £2Bn per year - any sensible assessment should chop that off.
Post Edited (Fri 23 Aug 04:34)
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Topic Originator: OzPar
Date: Fri 23 Aug 05:45
Interesting observations, HJ.
I wonder, does Sweden have VAT? Or has it managed to completely absorb all government charges within its income tax system? Does it have a fixed rate of 32% across all income levels or is that the basic rate and, like the UK, there are bands for different income levels?
The strongest argument for VAT is that it penalises those who spend the most money, in other words, the richest in society. However, when you dig into those numbers you often find that the wealthy have mechanisms to avoid paying or largely offset their payments of VAT, usually by spending through companies they create to reduce their tax burden.
It seems to me, that a flat rate of 32% on all income is a fairer way to go; yes, it means those on lower incomes get a tax hit, but they should recover that and more in improved social benefits. Most importantly, it cuts out the opportunities for richer folk to use creative accountancy to avoid their social obligations, substantially improving the government's budgetary position.
I like the Nordic model. It seems to me to be a good model for an independent Scotland, but I do wonder what would happen to the border with England if Scotland were to join the EC. Would it end up replicating the Irish issue? And would Scotland opt for the Euro over Pound?
I live on the other side of the world and therefore miss most of the day-to-day discussions on these issues, so I would appreciate a bit of insight into some of these points.
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Topic Originator: DBP
Date: Fri 23 Aug 14:03
We've got an office in Stockholm (never been myself) but we had a guy over for a project last year in Edinburgh... and after a few months said he didn't want to come back over as he felt Scotland was really expensive...
I assumed it was because they pay most of their tax on earnings
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Topic Originator: wee eck
Date: Fri 23 Aug 14:26
Was he teetotal? I thought Sweden was very expensive for alcohol?
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Topic Originator: DBP
Date: Fri 23 Aug 17:51
Don't think they drink anything like as much as we do... Also that's the one thing everyone mentions, but for example if childcare is free and not £30 a day, paying a couple of quid more for a pint isn't that bad!
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Topic Originator: hurricane_jimmy
Date: Fri 23 Aug 18:00
Oz - Sweden has a 25% VAT which is the same as Norway and Denmark compared to the UKs 20%. Iceland and Finland have a rate of 24% and A quick look on Google says that the lowest VAT in Europe is Luxembourg and Bosnia at 17% (although technically the Canaries at 7%) and the highest is Hungary at 27%. Most other countries seems to sit around the 21/22% mark.
As for income tax in Sweden there is one universal band that is in the Low 30s - this will vary slightly between cities/counties. For example, I pay 31.9% because I live in Lund and my colleagues who live in Landskrona pay 30.9% income tax. From what I understand 20% goes to your county who pass on a share to the Government in Stockholm while the other 11ish% goes to the local municipality and they have the power to vary this, hence the differences.
There two higher bands for high earners which kicks in around 39,000SEK (£3300) and 55,000SEK (£4650) per month - we negotiate our salaries per month rather than annually - and this is an extra 20% above 39,000SEK and 25% of earnings above 55,000SEK per month which equates to roughly a total of 47% and 52% tax respectively on earnings above those marks. And honestly, I'm not sure where exactly these bits of tax go be it City, County or Stockholm.
I wouldn't say its massively common to cross the lower threshold until you reach your mid-late 30s. Usually salaries are revised every few years and quite often you need to change jobs to get a better salary so there is an onus for the employee to negotiate a higher salary early on. I'm 27 and on the edge below of the lower 47% band. I live in the very south and close to Denmark though and will likely end up working there from January and will be pushed into the higher bands because the Danish Kronor is work about 30% more than the Swedish for the moment since DKK is going through a period of strength while SEK is going through a period of weakness.
As I mentioned earlier, there is a very low tax free allowance - equivalent to somewhere in the region of 1500SEK per month (£125).
Employers pay about 32% of an employees salary to the Government for pensions etc and so this doesn't come out of my pocket. So essentially the Government receive an amount equivalent to about 64% of my salary - half from me, half from my employer. Essentially I don't pay for/contribute to my own pension pot or unemployment fund. Unemployment funds are Government/Publicly managed in an almost Union like structure and you join the one for your specific field.
I'm sure when I calculated I would be paying roughly 28% of my Salary in Scotland in a comparable role to what I have now compared in Sweden with a 32% taxation level and I actually have more disposable income, even when you account for the different costs of living and currency strengths etc - generally I would say things are 20-30%ish more expensive here but this is matched in wages.
While Scotland does seem to be edging gradually toward a Nordic system, as it stands there's not much comparison between the level of benefits that I have in Sweden now. Just a few examples: 6 months paternity leave at 80% salary, unemployment benefit at 80% salary for 200 days (70% for another 100 and then 60% thereafter), if I decided to go back to University I get 3000SEK (£250) per month that I don't need to pay back (although this is nowhere near what you get in Finland and Denmark from what I understand) and can use a loan for about 9000SEK (£750) more per month, mortgage protection is part of the housing benefits so I wouldn't lose my home if unemployed and there are no contributions required for elderly care.
Compare these perks to paying 32% in Sweden to what you get for 28% in Scotland and you have to wonder what is actually going on?!
Some might argue that the "employer tax" would discourage business but the fact that this system exists in Sweden, Norway and Denmark and the consistent growth that these countries have would prove otherwise.
Hope that makes sense - feel I might have gone a bit overboard on the info!
Your comment on the Universal tax I agree with the sentiment of, but I would say your concerns are mitigated by the fact that Labour laws are stronger and wages are higher so there is a good level of disposable income for workers post-tax. This removes concerns we see in the UK about it being more "profitable" to remain in the Welfare state, which are genuine because of the way the system works - neither Tory or Labour seem willing to address this. Likewise the Universalist approach to the lower bands seems to have Unilateral support across the political spectrum and the populace rather than Progressivism, which is largely perceived as unfair in my experience. Like you say, there is also an enlarged Government coffers and better public services with this approach.
As for your comment on currency, for me Scotland has to have its own currency to ensure that we have full control over monetary policy. You will hear the moans about the EU apparently forcing us to join the Euro but neither Denmark or Sweden have been forced to and, having seen the stagnation in Finland, neither would vote for it either. If they did try Holyrood could introduce a vote and ask the populace to vote a change of currency down and indeed SNP policy is now for a Scottish Currency. Perhaps a Scottish Pound pegged to the Euro would be a sound solution in the early years until such a time when the currency can be freely voted - a precedent as such for this could be the pegging of the Swiss Franc to the Euro which I think ended about 5 years ago and overnight the Swiss Franc gained about 25% in value! Granted they did this in 2011 to 2015 which I think was actually an attempt to stop it strengthening out of control as the Deutschmark did previously, but I think this approach of looking at what other countries have done is something that we need to do more of.
DBP - Interestingly, I had the same comment from a group of my Swedish and Canadian colleagues that went over recently. Granted they were tourists but interesting that its not isolated.
Eck - For a beer in Sweden you'll pay 80-90SEK (£6.80 - £7.60) for a fizzy water or 90-100SEK for a Craft Beer (£7.60 -£8.50). This is lower than Norway where you'll pay roughly the same number of Kronors but the NOK is stronger than the SEK. Denmark has a liberalised Alcohol market like Germany and so its cheaper and you'll pay less DKK (45-55DKK/£6.70 tops for yellow fizz and about 60-70DKK/8.50 for Craft) but again the DKK is stronger than the SEK. The minimum wage in Sweden is roughly about 110 SEK (£9.30) per hour and 110 DKK (£13.40) in Denmark. Norway I can't remember, but I hope that gives you some reference.
Post Edited (Fri 23 Aug 18:16)
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Topic Originator: jake89
Date: Fri 23 Aug 21:51
£30 a day childcare DBP? Where are you sending the kids? More like £30 for a HALF day. It's generally £50 per day childcare.
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Topic Originator: DBP
Date: Fri 23 Aug 22:57
My youngest is 16,so it's been a while!
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Topic Originator: OzPar
Date: Mon 26 Aug 15:21
HJ, Thank you for your highly detailed response to my questions on taxation. It does clarify a lot of things for me and I think highlights the clear advantages of the Swedish/Nordic approach.
I like the idea of a Scottish pound, pegged to the Euro, rather than the English pound. If Scotland does go down the Indi route, one can see the possibilities if it opts to join the EC.
Rather than Ireland being the conduit to Europe for England, as is likely at present, Scotland would more naturally fill that role and the flow-on benefits in terms of industry, manufacturing, finance, logistics, freight transportation, port development, etc. could be immense.
I get the impression that most financial projections for an independent Scotland (doubtless strongly filtered by Westminster interests) are based on a static scenario; in other words, little will change - Scotland will still depend on diminishing oil revenue, whisky, tourism, a little bit of fishing, etc., etc.
But, if handled correctly, Scotland could carve itself a significant role as England's economic gateway to Europe and with that, I could envisage multiple ferry services to Europe from Leith and Rosyth, maybe Dundee too. There would be a huge increase in rail freight and lorry traffic over the border (each subject to a Scottish tax); also, there probably would be connecting coastal ferry services to English ports to relieve the freight burden on the roads.
In other words, there would be an absolute transformation of the Scottish economy.
Ah, you say, where is the money going to come from to pay for all the infrastructure that would be required for this to happen in Scotland? Well, in some respects the timing is perfect.
If you look at the money market and at Government bonds, in particular, many nowadays are paying next to zero on longer terms. So if, for example, you buy a hundred thousand pounds of 30-year bonds today, you will receive one hundred thousand pounds back in 30 years time. In other words, the central banks are expecting interest rates to remain very low for the foreseeable future. This is the perfect scenario for governments to borrow money for expensive infrastructure.
In so many respects, this could be Scotland's moment to shine. Brexit will be a disaster for England. It need not be so for Scotland. In fact, it could well turn out to be Scotland's greatest moment since Bannockburn.
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Topic Originator: jake89
Date: Mon 26 Aug 19:17
The "static" part of the debate always amuses me. I'll be clear - I am a fence sitter in terms of Scottish independence. Despite this I always laugh when people attempt to base the future success of Scotland based on current figures. This is nonsense. Scotland could be like Ireland and become a success. Alternatively Scotland could end up like a third world country! You can't tell simply by looking at current figures.
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Topic Originator: Tenruh
Date: Mon 26 Aug 22:23
How many third world countries are there in Europe?
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Topic Originator: wee eck
Date: Mon 26 Aug 23:01
''How many third world countries are there in Europe?''
Certainly none with the natural resources Scotland is blessed with.
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Topic Originator: jake89
Date: Tue 27 Aug 13:20
I was exaggerating by saying third world but that's how the media portrays it. It's almost like a country can only be incredibly successful or a massive failure. There's not a "doing alright" in their eyes.
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Topic Originator: McCaig`s Tower
Date: Fri 13 Sep 16:20
A couple of points on this one.
First it’s good to see that we seem to accept the GERS figures as being legitimate.
With regard to defence spending, that is allocated per capita (and hence the allowance for Trident will be about £200m p.a.). There are other ways of doing it – you might argue that it’s not just people that are being defended so Defence spend could be allocated in proportion to area, or to mile of coastline.
It’s normal (in fact, probably desirable) for parts of any country to “do better” than others (and this may vary over time) Perhaps others would prefer wealth not to be distributed in this way? Maybe it depends if you are a net beneficiary or not.
I’m puzzled by OzPar’s contention that an rUK would suddenly start to export to the EU via Scotland, particularly if there are additional duties to pay (leaving aside whether that would be permissible under EU legislation). Surely if most goods are going East and South, it makes no sense to pay extra to send them North and West?
If you can’t use these figures as a basis for the future, what figures can you use? And how will they be better?
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Topic Originator: OzPar
Date: Sat 14 Sep 05:58
McCaig, my point is that it is as much a matter of culture and convenience as Scotland's geographical position that might determine its future as a member of the EC.
A company located in post-Brexit England that currently sends most of its export product to the EC would almost certainly consider the option of relocating its plant to an independent Scotland in order to circumvent the costs of exporting to the EC. The disruption to staff and operations would be considerably less than if, for example, the company were to move to France or Holland. And in the grand scheme of things, shipping costs transitting the North Sea represent a minuscule proportion of production costs.
Scotland's economy could radically change as a result of this - in much the same way as Ireland's did after it entered the EC. With Brexit, we are entering a period of dynamic change; some will win, some will lose.
Scotland has the potential to win big. That is why it would be utterly naive to think that the economy would remain static in the manner currently shown in economic forecasts.
Of course, this is all predicated on a swift move by Scotland towards independence after Brexit occurs. In the event of prevarication on the Scots' part, the opportunity would almost certainly be lost.
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Topic Originator: Mario
Date: Sat 14 Sep 07:04
Rosyth had Scotland’s only direct ferry link. In the end it was only running a couple of days a week, and despite being subsidised the service was closed down
The idea of mass transportation north by road then south again by slow ferries is pie in the sky
Let’s see how the Irish tackle this. About 80% of their exports to the continent go via daily sailings to Welsh and English ports, then English roads south to the Channel.
Even if they had direct ferry capacity it takes twice as long and far more expensive.
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Topic Originator: Tenruh
Date: Sat 14 Sep 08:48
Quote:
Mario, Sat 14 Sep 07:04
Rosyth had Scotland’s only direct ferry link. In the end it was only running a couple of days a week, and despite being subsidised the service was closed down
The idea of mass transportation north by road then south again by slow ferries is pie in the sky
Let’s see how the Irish tackle this. About 80% of their exports to the continent go via daily sailings to Welsh and English ports, then English roads south to the Channel.
Even if they had direct ferry capacity it takes twice as long and far more expensive.
Wonder how many car manufacturers would consider relocating to Scotland?
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Topic Originator: DBP
Date: Sat 14 Sep 10:31
I'd be interested in service providers... Much easier to move the expertise (business and IT) from London to Edinburgh than London to Paris or Frankfurt
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Topic Originator: Tenruh
Date: Sat 14 Sep 10:37
Quote:
DBP, Sat 14 Sep 10:31
I'd be interested in service providers... Much easier to move the expertise (business and IT) from London to Edinburgh than London to Paris or Frankfurt
Aye agree but they won't need our ferries like car manufacturers.... Only problem is though, we're too wee and too stupid to be an independent country....
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Topic Originator: The One Who Knocks
Date: Sat 14 Sep 10:51
I believe zero car manufacturers would relocate to Scotland. If they were wanting to relocate from England they'd just go the whole hog and set up in continental Europe.
And although my eyes were open
They just might as well be closed
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Topic Originator: OzPar
Date: Sat 14 Sep 12:52
I really think the mindset has to radically change in Scotland. Brexit is now a reality and increasingly, independence is becoming an option that has to seriously be considered.
If you switch to the glass half full scenario, you would be amazed at the opportunities that would present themselves; smart operators are acutely aware that change always produces opportunities.
Yes, the ferry service at Rosyth failed in the past, but that was under entirely different circumstances to what we are discussing here.
Mario said the idea of mass transportation north by road then south again by slow ferries is pie in the sky. Well, actually, if your company is based in Manchester or Leeds or Liverpool, there's not too much difference taking a truck to Leith or Rosyth as opposed to Dover or Felixstowe. As for the additional sea distance, yes for some products it wouldn't be so useful, but outside of perishable foodstuffs, most companies would simply adjust their Just In Time schedules to suit.
As I said earlier, the shipping cost is a tiny component in a product's final price.
No problem is insurmountable.
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Topic Originator: Tenruh
Date: Sat 14 Sep 13:06
Quote:
OzPar, Sat 14 Sep 12:52
I really think the mindset has to radically change in Scotland. Brexit is now a reality and increasingly, independence is becoming an option that has to seriously be considered.
If you switch to the glass half full scenario, you would be amazed at the opportunities that would present themselves; smart operators are acutely aware that change always produces opportunities.
Yes, the ferry service at Rosyth failed in the past, but that was under entirely different circumstances to what we are discussing here.
Mario said the idea of mass transportation north by road then south again by slow ferries is pie in the sky. Well, actually, if your company is based in Manchester or Leeds or Liverpool, there's not too much difference taking a truck to Leith or Rosyth as opposed to Dover or Felixstowe. As for the additional sea distance, yes for some products it wouldn't be so useful, but outside of perishable foodstuffs, most companies would simply adjust their Just In Time schedules to suit.
As I said earlier, the shipping cost is a tiny component in a product's final price.
No problem is insurmountable.
Mario's a Yoon and English to boot so he won't see any positives in Scotland being independent.
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Topic Originator: AdamAntsParsStripe
Date: Sat 14 Sep 13:35
Quote:
OzPar, Sat 14 Sep 12:52
I really think the mindset has to radically change in Scotland. Brexit is now a reality and increasingly, independence is becoming an option that has to seriously be considered.
If you switch to the glass half full scenario, you would be amazed at the opportunities that would present themselves; smart operators are acutely aware that change always produces opportunities.
Yes, the ferry service at Rosyth failed in the past, but that was under entirely different circumstances to what we are discussing here.
Mario said the idea of mass transportation north by road then south again by slow ferries is pie in the sky. Well, actually, if your company is based in Manchester or Leeds or Liverpool, there's not too much difference taking a truck to Leith or Rosyth as opposed to Dover or Felixstowe. As for the additional sea distance, yes for some products it wouldn't be so useful, but outside of perishable foodstuffs, most companies would simply adjust their Just In Time schedules to suit.
As I said earlier, the shipping cost is a tiny component in a product's final price.
No problem is insurmountable.
Indeed. A typical ferry from Rosyth from a truck driver from the north of England counting in driving time would be around 16 hours to the Netherlands.
To go south via Dover plus ferry time and then onto the destination in Europe is really minimal.
In fact in many cases, even longer given that the driver would have to take a 9 hour minimum break after reaching Calais or Dunkirk.
On a ferry from Rosyth, their break time is served on route.
Zwei Pints Bier und ein Päckchen Chips bitte
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