IN 1999, John Swinney’s SNP manifesto promised to use the tax varying powers to raise “a penny for Scotland”. I said it was nuts but was told “no, the polls show it’s a very popular policy”. “Yes” I replied, “people will support it in a survey but when the opposition campaign screams Scotland is the highest taxed part of the UK it will morph into a policy no-one would vote for”.

In the run up to the Scottish Budget, those surveys were back, so I guess if the SNP has learned anything, it’s not to put a commitment to tax rises in a manifesto. It’s not that I am against rising taxes when it’s required, but the SNP have just walked into a trap. One I highlighted when I wrote in this column that the SNP should reject the Smith Commission findings and the political and fiscal traps within it.

In the next Scottish elections the Conservatives will repeat the highest taxed in Britain mantra and Labour will say they are not doing enough, squeezing the SNP from both sides. If a new independence referendum is called before the 2021 Scottish elections the Conservatives will predict massive SNP tax rises post-independence. Also by conceding ground to Labour and moving to the left, the SNP sent a message to Labour types that we don’t need independence, you can just vote for Corbyn. You cannot win an independence referendum from the left – there are just not enough people there and they don’t tend to vote. The people who need to be convinced of independence are the ones who worry about higher taxes, and the psychological and political damage done by raising taxes isn’t worth it for an extra £164 million. It sounds like a lot but that’s a rounding error amount in our national accounts.

According to the Tax Justice Network there is £119 billion of corporate tax avoidance a year in the UK. If the UK government collected that money then roughly £10bn of extra spending could be made available to Scotland. Even if they only collected 10 per cent of it, a billion or so extra a year would make a huge difference to protecting frontline services.

I am not talking about tax fraud. The UK government actually encourages offshoring and actively approves schemes that reduce the taxes paid by large corporations. Simply by closing the most drastic of the loopholes that allow large corporations to transfer profits out of the UK and thus avoid contributing their rightful amount to government revenues, austerity could be ended. The UK government boasts about not raising income tax bands and raising the threshold but by encouraging corporate tax avoidance at the same time. It creates a mechanism that ensures that individuals and not large corporations share a higher percentage of the tax burden whilst overall spending falls.

Given it is legal to avoid tax in certain ways, companies are required in their duties to shareholders to lower their tax obligations. So if two property developers are bidding for the same land, one is offshoring their profits and the other paying fair taxes, then the tax avoider wins every bid and the profits of the tax paying company fall, thus lowering revenues further. To end austerity the UK government simply needs to move the goalposts on what is acceptable and what is not. It isn’t within the power of the Scottish Finance Minister to change this, but he should at every opportunity set out the background to austerity and point out to Murdo Fraser that any tax rises were as a result of UK government incompetence and its unnecessary austerity.

The £600m to provide super-fast broadband across Scotland by 2021 is a welcome move, as is the public sector pay rises that are cleverly structured at three per cent for lower earners and two per cent for higher earners capped at £1,600.

However, if the Finance Minister wanted to budget for growth then one key policy is missing – late payment. The SNP 2015 manifesto promised action on late payment but other than the welcomed 10 days payment commitment of the Scottish Government little else has changed.

SMEs make up 99.4 per cent of Scotland’s businesses. They are the backbone of Scotland’s economy, our growth engine, the creators of most new jobs, and most added value jobs in the private sector. 33 per cent of those tax paying businesses claim late payment is the single largest driver of cash flow problems, slowing investment and growth, and that means less jobs, so less people paying whatever tax you levy on their salaries.

67 per cent of SME business owners claimed that if late payment wasn’t a problem, then their businesses would grow faster, with 46 per cent predicting between five to10 per cent annual growth. Larger companies in particular thought they would grow on average 22 per cent faster. So legislating against late payment could lead to more than 10 per cent growth in the SME sector, increasing GDP, lowering benefit payments due to job creation, and increasing the overall income tax take that would significantly dwarf the £168m announced by todays tax band tinkering.

Sure, it’s tricky to legislate but my research has identified that councils and the NHS are amongst the slowest payers and they are directly under the influence of the Scottish government. As are the procurement contracts the government gives out to larger businesses and although the government can specify what safety boots your workers wear, what your equal opportunities policy can be can be and compels you to carry out environmental audits (all good things) but they are reticent to compel those big companies to actually pay their suppliers on time before accessing public contracts.

So it was a budget that doesn’t help the independence cause, makes it harder to establish a pro-independence majority in the next Scottish elections, doesn’t help grow the economy enough, gives all the government’s political opponents ammunition to fire at them and only raises a paltry £168m extra with its tax changes.

It was an ok budget overall, I guess, and it could have been worse. A Murdo Fraser budget would do immense damage to society and a Richard Leonard one (is he their finance spokesperson?) would put the economy in reverse.