SCOTTISH Labour will reverse George Osborne's controversial tax credit cuts if it defies the odds and wins next year's Holyrood election, Kezia Dugdale will pledge today.

The Scottish Labour leader will unveil plans to use new tax powers coming to Holyrood to offset tax credit cuts amounting to £355million in Scotland next year.

In a move that signals the party's determination to challenge the SNP from the left, Labour will promise to reverse a planned rise in income tax threshholds.

The move - effectively blocking a tax cut for the better off - means higher earning Scots would be worse off than those in England.

Scots earning £50,000 would lose approximately £1280 compared with similar workers in England.

Labour also intend to scrap SNP plans to abolish Air Passenger Duty (APD), the tax on flights, to help maintain tax credits for the less well off.

The Nationalists plan to halve, then scrap, the levy, at a cost of up to £250million per year.

Ms Dugdale will announce the plan, which will form a key part of her party's election manifesto, in her speech to the Scottish Labour conference.

It comes after delegates voted overwhelmingly to debate Trident renewal tomorrow.

A motion has been worded to guarantee the support of the powerful Unite union, The Herald understands, making it almost certain Scottish Labour will vote to oppose a new generation of nuclear weapons.

The decision would put the Scottish party at odds with UK Labour but it could help staunchly anti-Trident Jeremy Corbyn in his bid to end its support for renewing the Clyde-based missile system.

In a warmly-received speech yesterday, the UK leader sought to reassure trade unions concerned about the impact on jobs of scrapping Trident.

"No-one should even consider allocating a penny saved on not renewing Trident until skills and jobs are protected through a proper programme of diversification," he said.

Under the Chancellor's plans, low income families stand to lose £1300, on average, as a result of cuts to tax credits, though he has promised to review the policy following this week's embarrassing House of Lords defeat.

Scottish Labour will offset the cuts using Holyrood's control over income tax and other levies, including APD, which comes into force in 2017/18.

The Conservatives have already pledged to raise the threshhold for the higher, 40p income tax rate from £42,385 to £50,000 by 2021, reducing revenues by an estimated £440million.

The SNP has said it will halve APD as soon as it has the power, cutting a further £125million from Holyrood's coffers, before scrapping the levy altogether.

In her first conference speech as leader, Ms Dugdale will say: "Scottish Labour will stand for the elections with a promise to restore the money Scottish families will lose from this Tory tax rise on working families.

"We will act as soon as the new powers make it possible.

"We don’t need to tax ordinary Scots more to make this change.

"We just need to make different choices from the Tories and the SNP."

In a swipe at the Nationalists she will accuse Nicola Sturgeon of "posing as a socialist" and add: "Simplistic claims to be doing the best for Scotland are meaningless if the power to change things for those who need our help goes unused.

"The SNP are obsessed with powers but too scared to use them."

SNP deputy leader Stewart Hosie said: "Labour in Scotland is beset by infighting and confusion, so whatever their rhetoric – on Trident, tax credits or any other issue – the fact is they are a party who are barely fit for opposition, let alone government."