Labour income tax plans will raise £900m a year more than SNP's, think tank reveals

By contrast, the SNP's more cautious proposal to limit tax cuts for the better off would raise an additional £300million, compared with sticking with George Osborne's strategy for the rest of the UK.

The study has sparked a furious row between the SNP and Labour with Finance Secretary John Swinney describing Kezia Dugdale's plans as "a tax grab on some of the least well off in our society".

Labour's Jackie Baillie hit back, accusing the SNP of passing on Tory austerity and calling on Mr Swinney to spell out where the cuts would fall.

They clashed as a YouGov poll showed Labour clawing its way back into second place in the fight for Holyrood seats, despite voters rating Ruth Davidson, the Scots Tory leader, more highly than Kezia Dugdale.

With Holyrood gaining almost full control over income tax from April next year, the issue of tax has dominated the election debate.

In a new analysis, IPPR Scotland compared the main Holyrood parties' plans with the 'status quo' option of sticking with the Chancellor's proposals.

The think tank's figures show how much more, or less, the Scottish government would raise annually by 2020/21, under the Holyrood parties' plans.

It found Labour's plans to put 1p on the basic and higher rates of income tax, and 5p on the additional rate paid on earnings over £150,000 would generate between £1.1billion and £1.2billion.

The SNP would raise an extra £300million as a result of raising the higher rate threshold in line with inflation, rather than copying Mr Osborne's Budget increase to £45,000 next year and £50,000 by 2021.

Looking at the other parties' plans, the think tank said the Scottish Liberal Democrats, who want a 1p increase to all three rates, would raise an extra £750million.

The Scottish Greens' proposal for a lower basic rate and increased additional rate of 60p would between £600million and £950million more.

The Scottish Conservatives have pledged to stick with the UK Government's tax regime, arguing Scots should not face higher taxes than people south of the Border.

Under Labour's plans the least well off tenth of households would pay no more than at present.

However the second poorest 10th would be £20 per year worse off.

The tax burden would then rise through the income scale with the richest 10th paying an extra £2850 in income tax.

By contrast, the SNP's plan would leave all but the richest fifth of households untouched or better off.

The richest 10th would be £200 worse off.

The analysis also shows just how hard the Greens would hit the richest 10 per cent, adding £4270 to their bills.

Mr Swinney stressed the importance of "protecting household budgets" and said his party's plans were "reasonable and fair".

In an outspoken attack on Labour, he added: "This independent report shows Labour’s plans are a tax grab on some of the least well off in our society.

"Labour have been found out making false promises on tax to people who simply cannot afford to pay more. "This is an absolute betrayal of Labour values."

Ms Bailie, Labour's public services spokeswoman, said: "No voter can be left in any doubt that there is now a clear choice on May 5.

"The SNP’s refusal to tax the richest will see the poorest lose out.

"After a career of calling for more powers to stop austerity Nicola Sturgeon has bottled it, and the price of that means hundreds of millions of pounds of cuts to schools and local services."

Russell Gunson, the director of IPPR Scotland, said: "With billions of pounds of spending cuts and benefits coming to Scotland over the next few years, the balance of tax rises and spending cuts proposed by the parties needs to be front and centre of the plans they will take to the country to vote on next month.

"The parties need to be clear with voters as to how much, if any, tax they hope to raise and what scale of public spending cuts and reform of our public services they're proposing."