CUTTING taxes for the better off would erode health and education services, MSPs were told as they await the publication of the Scottish Budget today.

Ruth Davidson’s opposition wants to increase the level at which the 40p higher rate is paid in line with the Chancellor’s proposals at Westminster, effectively giving a saving to people on higher incomes.

But Nicola Sturgeon’s Government wants to keep the existing threshold which she says would generate an extra £1.2 billion over the next four years for investment in vital services.

It is the first budget where the Scottish Government will use new powers devolved under the Scotland Act 2016, including powers over income tax.

Yesterday, in the wake of warnings that spending cuts were impacting on the quality of services including on education, the Tories found themselves under attack during a Holyrood debate from the SNP, Labour, the Greens and the Liberal Democrats.

“We aspire to protect low and middle-income tax payers and given the choice between raising revenues or handing out tax cuts to the richest in Scotland, we choose public services,” said Finance Secretary Derek Mackay.

“Taxes are part of the social contract and it’s through raising revenue that we can provide a quality NHS, free education, delivery of the living wage, free prescriptions and free personal care.”

After the debate, Mackay said his first Budget would support the economy, tackle inequality and provide high-quality public services for everyone in Scotland.

“This is a historic budget, delivered in challenging economic and political times. The UK Government’s Autumn Statement was a missed opportunity to end austerity. It did not go far enough to get the economy back on track and lacked much needed investment in public services,” he said.

“Despite these challenges, the proposals I will publish will be a budget for our economy and public services, our environment and communities. It will support stability and growth, help tackle climate change and promote fairness in our society.”

During the Holyrood debate LibDem leader Willie Rennie hit out at the Tory proposals which seek to raise the 40p higher rate threshold from £43,000 to £50,000, saying they would be the “road to ruin” for public services.

“The Scottish Conservatives are proposing that we blindly follow the Chancellor in Westminster and don’t use any powers we have to make sure we build a fairer and more progressive Scotland,” he added.

“Not using the powers that Scotland has to improve services would be an abdication of responsibility and would be a backwards step from devolution.”

While the Tories argue the SNP should bring in tax cuts for the better off, which they believe would lead to more people moving to Scotland, increasing the overall tax take, the LibDems, the Scottish Greens and Labour are arguing for greater tax rises.

Patrick Harvie, finance spokesman for the Scottish Greens, urged ministers to use powers over income tax to tackle poverty and protect local services such as education and social care.

In the Holyrood election in May, he proposed creating new income tax rates and thresholds in a way he says people on modest wages would pay less while those on higher ones would pay more. The Greens’ reform, he says, would generate an additional £331m for public services.

“The SNP must remember that they are a minority government once again, and that they must work together with others to pass their budget. If they’re willing to use that opportunity to tackle poverty and protect public services, we’ll respond constructively,” he said.

“This is a test for Scottish ministers. If their Budget is timid it will go nowhere; if it’s bold it will signal that they want to work constructively to make a real difference to people’s lives.” Scottish Labour, meanwhile, are in favour of introducing a 50p top rate of tax for those earning more than £150,000.

After the debate MSPs voted 29 to 92 against a Conservative motion that families and businesses in Scotland should not be taxed more than those elsewhere in the UK.

Amendments by all the opposition parties also fell. The SNP amendment, which fell by 60 votes to 61, said the “purpose of devolution of powers over income tax is to allow Scotland to make its own decisions on tax rates”.

The Labour amendment calling for a 50p top tax rate was voted down by 29 to 91. MSPs voted 6 to 115 against the Green amendment calling for high earners to pay more and the Liberal Democrat amendment asking for a penny increase on income tax fell by 88 votes to 27, with six abstentions.