THE SNP will no longer be able to credibly claim to be an anti-austerity party if it refuses to back an income tax rise to protect public services, Scottish Labour leader Kezia Dugdale has said.

Ms Dugdale issued a direct challenge to Nicola Sturgeon to support her plan for an across the board income tax increase of 1p, which she said would raise £500m and offer an alternative to imposing severe cuts on councils which will have a knock-on impact on schools and nurseries.

However, the SNP has expressed strong opposition to the proposal, arguing it would increase the tax burden on the lower paid with nationalist MSPs poised to oppose it today at a crunch budget vote at Holyrood.

Angela Constance, the education secretary, said that the policy was "not progressive in the slightest" while Derek Mackay, the transport minister, said it would shift the burden of Tory austerity onto working people.

But John Mason, the SNP backbencher, said that while he was not convinced by the Labour plan a rise under existing Holyrood powers would be progressive, with the higher paid set to pay more than the poorest.

Labour has said income tax payers earning less than £20,000 would receive a £100 annual payment that would fully compensate them for increases, with work from independent Holyrood researchers showing that a 1p rise in the Scottish Rate of Income Tax (SRIT) would hit the higher paid harder than the poorest as a proportion of disposable incomes.

Mr Mason said: "I think SRIT is progressive, but it means low earners also paying more. Labour are trying to get around that with the rebate, I fear that’s going to be complex and expensive. Although in principle I’m in favour of raising tax, my reaction is that I’m wary about this and whether it has been fully thought through.

"At the finance committee John Swinney agreed with me that this is a progressive tax, but it’s perhaps not progressive enough. It’s not a clear cut thing. I can see Labour’s argument but my feeling is the uncertainties outweigh the benefits."

With the Liberal Democrats also supporting a 1p rise, the SNP are expected to vote with the Tories to oppose the plan at Holyrood today. Ahead of the showdown, Mr Swinney claimed his budget would deliver a pay rise for up to 51,000 low paid workers by uprating and extending the living wage.

Meanwhile, Scottish Conservative leader Ruth Davidson, in a speech in Edinburgh last night, warned that Labour and LibDem proposals to "hammer family finances" by raising taxes could see people and businesses opt to leave Scotland for other parts of the UK