Sure, here are the phrases placed in the correct spaces in the passage:

**Passage:**

Pam: Hi, Sue. Am I late? The traffic was terrible.
Sue: No, you're not late. It's exactly six o'clock. You're exactly (1) **on time**. What's the matter?
Pam: Firemen and fire-engines are everywhere. There's a house (2) **on fire** near the cinema. I couldn't get a bus. I had to come (3) **on foot**.
Sue: Well anyway, you're here. Liz can't come. She's in Italy.
Pam: Oh, is she (4) **on holiday**? Italy's lovely at this time of the year.
Sue: No, she had to go there (5) **on business**. She's gone to a meeting for her firm.
Pam: Well, where shall we go for our holiday? Spain? I don't know. (6) **On the one hand** Spain's always sunny in summer, but (7) **on the other hand** it's a bit crowded.
Sue: Yes, I thought of Spain too, but (8) **on second thoughts** I think I'd prefer Holland.

**Sentences:**

1. You can't make a reservation by phone or post. You must do it **in person**.
2. She rang the police and they arrived just **in time** to catch the burglar.
3. He spent six years **in prison** for the crime.
4. Please tidy up your room. It looks awful. It's really **in a mess**.
5. He's very difficult to control. He's always **in trouble** at school.
6. Andrew's been very quiet recently. I think he's **in love** with the new girl at the office.
7. The children were very shocked and upset by the sad news. Many of them were **in tears**.
8. Sorry I can't stop and talk now. I'm **in a hurry**.