FINANCE Secretary John Swinney has given the clearest signal so far that a future SNP government would use Holyrood's new powers to make higher earners pay more income tax.

The Deputy First Minister said George Osborne's plan to raise the starting thresh-hold at which workers pay the higher 40p income tax rate was "an issue to be addressed" and questioned whether it was the right thing to do.

He said, on principle, the SNP believed "people on higher earnings should pay their fair share of taxation" and cited his reform of Stamp Duty, which shifted the burden of taxation away from the less well off, as an example of the party's approach.

Mr Swinney is under growing pressure to set out his plans for income tax when rates and bands are set at Holyrood from April 2017.

In England and Wales, Chancellor George Osborne will raise the starting point for the 40p rate from £42,385 to £43,600 in 2017 and plans to increase the thresh-hold to £50,000 by 2020, effectively cutting tax for higher earners.

If Mr Swinney does not

follow suit, Scots earning £50,000 will be about £1300 worse off than those on the same salary in England by the end of the decade.

Asked about his approach on the BBC's Sunday Politics, he said: "We believe that people on higher earnings should pay their fair share of taxation."

Pressed on income tax changes, he added: "Where they are going to receive a substantial tax cut, as George Osborne has set out, there is an issue to be addressed there as to whether that's the right thing to do."

He said his new Land and Buildings Transaction Tax "put into practice the principles of the SNP".

The Stamp Duty replacement increased the levy for purchasing luxury homes while removing it altogether for the 50 per cent of transactions at the lower end of the market.

Mr Swinney has come under pressure to set out his position since Scottish Labour pledged to restore in full the UK Government's proposed cuts to tax credits.

To fund the move, Labour has said it would not implement Mr Osborne's income tax cuts or an SNP proposal to cut air passenger duty, the tax on flights.

Mr Swinney again refused to commit to reversing the tax credit cuts, which are set to cost 250,000 Scots families more than £1000 on average, but told the BBC: "We'll look at the scale of the challenge that faces us.

"It is our intention to support and protect people in low income households."

He warned, however, it was "inconceivable" the Scottish Government would find the funds to mitigate the UK Government's full programme of welfare cuts.

He put the cost of reversing the tax credit cuts at £400million next year, rising to between £650million and £750million by 2020.

His estimates are much higher than Labour's, whose policy is based on the cut costing £355million to reverse next year, rising to £440million by 2020.

In a newspaper article, Mr Swinney defended the SNP's plan to halve, then abolish, air passenger duty, saying the £250million levy was a barrier to investment, exports and tourism.

A Scottish Labour spokesman said: "John Swinney again had the opportunity to make clear whether or not the SNP will restore in full the money people have lost in tax credit cuts and he has refused to do it.

"Labour is absolutely clear - we will prioritise restoring the money lost from tax credits above a cut in plane ticket prices and tax breaks for high earners."

Scottish Conservative finance spokesman Murdo Fraser said:

"In a desperate bid to out Left each other, Labour and the SNP would make no attempts to ease the tax burden.

"That will not only mean people right across Scotland paying more, but risks putting Scotland at a competitive disadvantage to England."