§ I now turn to what will be of more immediate interest, the expenditure and 1076 revenue of the coming year. The Committee will see from the papers in their hands that the expenditure of the coming year is estimated at £100,047,000, £4,066,000 over the estimate of last year. If we add the Estimate of £7,310,000 for the Local Taxation Account, we have a total of £107,357,000. Now, that is an enormous amount; nobody can deny it. It is £29,310,000 more than Sir Stafford North cote had to provide for 20 years ago, and it is more than double the sum of £51,709,000 which was the modest Budget Estimate of Mr. Goulburn in 1846–50 years ago. The increase over last year's Budget Estimate is due mainly, of course, to the vast increase of £3,122,000 in the Navy Estimates. Every Chancellor of the Exchequer for the last 10 years has been burdened with the ever-increasing burden of this "old man of the sea."[Laughter and cheers.] I do not complain of it, because, in the first place, I believe the expenditure to be necessary—[cheers]—and, in the second place, if it be necessary, I know that it is far more economical that we should incur it at a time when we have leisure to think out a systematised plan on which it can be made, than to defer works which we ought to do ourselves to be attempted some day by our successors, and then to be provided for by Votes of Credit amounting to enormous sums, much of which would certainly be wasted, and all of which might be too late for the object for which it would be required. ["Hear, hear!"] Therefore, Sir, I do not grudge this increase in the Navy Estimates of the current year. I am sanguine that next year may show a decrease. I need not explain the other heads of the expenditure, because they have been explained by the memoranda which have been circulated with the Estimates, but there is one point to which I ought to call the attention of the Committee. The Consolidated Fund Services would naturally show a decrease of £30,000. Instead of that they show an increase of £35,000, and I have this year, unfortunately for me, to pay for the failures of my predecessors some time ago. I have to ask Parliament to start an annuity of £65,000 in order to make up the deficiency in an old annuity of £150,000, created under the Indian Army Pension 1077 Deficiency Act of 1885. Under the system which prevailed between 1870 and 1884, India discharged her liability for that part of our soldiers' pensions which was earned by service there, by making a capital payment to us when the pension began, calculated on the probability of the pensioners' lives. But owing to delay in the calculations, to their omission to calculate the pensions granted before 1870, to the calculations being based on too high a rate of interest, and to the fund thus formed not having been properly invested, it was discovered in 1884 that a heavy liability had been imposed on the Consolidated Fund. A new system was therefore introduced in 1884, and an annuity of £ 150,000 for 60 years was set up to discharge the liability incurred under the old system. It has been found that in 1884 the liability was so much underestimated that it is now necessary to increase the annuity as I propose. Sir, the total sum I have to provide for is, as I have said, £100,047,000, and now Income to the revenue.