Labour have got to attack the SNP's anti-austerity position as much as possible. While austerity-lite seems horrible Labour has got to give it their best shot for this election. The economy isn't doing great, but it's doing better than it was in 2010 and the deficit has to be cut for long-term interests. How do we cut the deficit? By reducing government spending and increasing government revenue. We probably can't just do it with high taxes since that could scare away the rich and actually reduce revenue (although this is unlikely ('The New Palgrave Dictionary of Economics reports that estimates of revenue-maximizing tax rates have varied widely, with a mid-range of around 70%.'), but this is what some (especially in the UK) think).
They could probably raise the top rate of tax up to about 65%
with the pretence of cutting the deficit with the additional revenue but
that's just not electorally viable. How could Labour get many of
England's seats if they went for such a promise? They would be instantly
branded as Old Labour, old socialist and stupid. There are far more
seats in England than in Scotland - no matter how important Scotland is.
The SNP have no plans on how they're going to fund their promises (stopping
austerity). It's highly likely that they wouldn't bother trying to fund it and they would just increase borrowing. This CAN'T work in the long-term -
they're just going for votes in the present. It is Labour that is actually
thinking about the long-term future for Scotland, not the SNP, and,
sadly, it involves austerity. Although Labour will put much more of it
on the rich's shoulders than the Tories will and won't make silly
promises like a surplus by 2018 and then more spending which will
require massive cuts.
Note: This argument also applies to Plaid Cymru in Wales as well as other anti-austerity parties such as the Green Party of England and Wales, Left Unity and the Scottish Greens. Austerity-lite will help the UK in the long-term while doing minimal damage in the short-term.