§ Direct Taxation
§ I come now to the taxation of income, where there will be one change.
§ There is here a dilemma which has to be squarely faced. Any increase in the basic rate of income tax is bound to hit millions of ordinary people who, through absolutely no fault of their own, but entirely as a consequence of the deliberate actions of others, abroad and at home, will soon find themselves with thinner pay packets as a result of the three-day working week. So, with one exception, I do not intend at this time to increase the direct taxation of incomes.
§ Those on higher incomes will in general obviously be better able to cope with the situation we face. I have decided that in respect of the last year of surtax, 1972–73, there will therefore be a 10 per cent. surcharge on total surtax bills. This surcharge will be payable half on July 1, 1974, and half on January 1, 1975.
24§ The surcharge will not apply to any-over over 65 on April 5, 1974. The yield will be £35 million.