Kenny Farquharson: Time to rediscover old-fashioned thrift

OLD music hall comedians such as Will Fyfe and Harry Lauder gave the world the notion that we Scots are thrifty, sometimes to the point of parsimony.

They told tales of how Scots restaurants heated the knives so customers couldn't use too much butter. They said a Scotsman's cure for seasickness was to lean over the side of the boat with a sixpence held tight between his teeth.

These stereotypes could, of course, cause offence. The story goes than an Aberdonian once wrote to the editor of his local newspaper saying: "If you print any more jokes about mean Scotsmen I shall stop borrowing your paper."

Well, we're about to find out just how thrifty Scots can really be. Last week's Budget means the routine increases in public spending we've become accustomed to over the past decade are now just a fond memory. Depending on which accounting protocol you favour, next year will bring either a real-terms cut of 0.1% or a rise of 0.5% in the cash the Scottish Government can spend in the coming year. Either way, it's not good.

So, what is First Minister Alex Salmond going to do about this? Complain, of course. Since the start of the economic troubles the SNP's position has been consistent – we shouldn't stint in our efforts to spend our way out of the recession, stimulating the economy in every which way we can. In Salmond's world, John Maynard Keynes is king. Spend, spend, spend is the mantra. And that requires more money, not less.

This makes sense for the SNP – albeit for a morally dubious reason. The Scottish Government has absolutely no responsibility for keeping the national debt in check. The black hole at the heart of Britain's finances could get bigger and bigger and it wouldn't trouble the First Minister one little bit – not until an independent Scotland had to pick up its share, and that's not happening any time soon. Free from the moral, political and economic restraint that the Labour Government and putative Tory Government have to exercise on the national debt, the SNP can simply say: "We want more."

The politics of all this must be a bit baffling to the average voter. The SNP says the country should brace itself for 'Labour cuts'. But when they arrive Labour will call them 'SNP cuts' because it's Salmond who will be doing the actual cutting. Which of these versions of events will the voter find hardest to swallow? A close-run thing, I expect. But perhaps it is Salmond who faces the trickier task. The actual cuts will reflect his own priorities, not Labour's. He faces a perfect example of the famous nostrum coined by the Duc de Lévis two centuries ago: "To govern is to choose."

Of course, as my colleague Tom Peterkin explores today on page 11, one option would be to top up Scotland's finances by using the Tartan Tax powers available under the Scotland Act. The SNP suggested this once before, in its 'penny for Scotland' tactic during the 1999 Holyrood election, when the public finances were in a far less perilous state than they are now. Such a move would provide £350m for frontline services. It would be bold – and highly risky. Are Scots so altruistic that they would be happy paying more income tax than their English neighbours to shore up public services north of the border? Perhaps. They'd certainly want to be convinced, first of all, there was no other way to make government more efficient, and that every spare 5p piece had been fished from the back of every government settee. And here's where Salmond has some soul-searching to do.

The Scottish Government has been challenged by the Treasury to shoulder its share of a £6 billion efficiency drive to help pay for the bank bailouts. At a time like this the question the SNP government has to ask itself is this: can it afford to hold fast to the party's ideological nostrums, even if the consequence is a cut in frontline services in health, education, policing or social care?

In this newspaper today, Scottish Labour leader Iain Gray indulges in some predictable point-scoring, calling on Salmond to save tens of millions of pounds by scrapping the independence referendum and the Scottish Futures Trust. But there are other, more lucrative money-making projects that neither the SNP nor Labour seems willing to contemplate.

At a time of national emergency – that is surely not an overstatement of where we are today – is it really unthinkable to mutualise Scottish Water? Such a move would free up £182m of taxpayers' cash a year, as well as give the industry the ability to borrow money on the open markets to fund some much-needed modernisation of infrastructure.

And what about the leasing of 25% of Scotland's forest estate – a plan unveiled by the SNP's Mike Russell when he was environment minister and swiftly ditched when he was replaced by the more left-wing Roseanna Cunningham? Russell reckoned it could bring in a whopping £200m. As long as the management of the forests was carefully monitored and access preserved for walkers and mountain bikers, can we really afford to rule this out? When the alternative is a degradation of frontline services that educate our young and care for our sick, the SNP needs to reacquaint itself with the concept of hard-headed, old-fashioned Scots thrift. Start heating up the butter knives.