§ But the great pain in direct taxation is due to the income-tax, which exceeded my Estimate by £1,250,000, yielding £31,250,000 in the course of the year. So much attention has been called to the increased yield of the income-tax and so much misconception appears to be abroad in regard to the matter that I hope I shall have an early opportunity of going fully into the question. For the present I think I shall best consult the wishes and the not unnatural impatience of the Committee if I pass briefly over the subject. I have to admit at once two errors in the estimate which I made. In the first place I undoubtedly overrated the decline which was to be expected from the inclusion in the averages, by which a large portion of the tax is collected, of what was on the whole a bad year in place of what had been a very good one; and, in the second place, I made no allowance at all for the increased efficiency of collection which has been going on for some years, but which was undoubtedly largely stimulated by the new instructions issued by the Board of Inland Revenue to the collectors in the month of September last. As I say, I do not doubt that I shall have an opportunity of giving the House full information on the subject, and of making the explanation which I wish to do, before very long. For the present I confine myself to the statement that those instructions were issued by the Board of Inland Revenue in the exercise of their ordinary discretion, without any regard to the circumstances of this particular year, and without any hint or suggestion from me. I am, of course, absolutely responsible for them I take the whole responsibility. But I think, having regard to what has been said and suggested outside, that the Committee ought to know that these instructions were not the result of the pressure of a needy Chancellor of the Exchequer, but were the ordinary action of the Commissioners of Inland Revenue in pursuit of a policy which they had long been following. I estimate that owing to the steps which were taken the receipt for the past year has been increased by £800,000, and the arrears left over for collection in the 1056 present year have been correspondingly diminished. I may add, and I think it will interest the Committee to know it, that since 1901 there has been a steady diminution in the amount of arrears per penny of tax left over for collection in the next financial year. Thus, in 1901, they were £567,000 per penny of tax; in 1902 they fell by £28,000 to £539,000; in 1903 they fell by no less than £89,000 to £450,000; in 1904 they fell by £34,000 to £416,000; while this year I estimate, on the best calculation that I can make at the present, time that they have further fallen by £66,000, and will stand for the current year at £350,000 per penny of tax. The Committee will therefore see that this has been a movement of steady progress for some years past and that it is no sudden or new departure, but the natural development and consequence of a policy which we have for sometime been pursuing. That concludes my review of the revenue of the past year, I am afraid an unusually long one, but there were some features in it which I thought might be of exceptional interest to the Committee.