The new Labour Government at Westminster has had a poor start with three own goals.

First, the restriction of the Winter Fuel Allowance to those on benefits only. Once many of those hundreds of thousands of pensioners who could have signed up for benefits but had not previously done so now do so, in order to claim both the benefit and the Winter Fuel Allowance, the result will quite probably be, despite all the trouble it has caused, little or no saving at all.

Second, squandering the opportunity to be a clean Government contrasting with the Conservatives who the voters came to believe were just in it for themselves. How could the Labour top team not have the foresight to realise accepting personal gifts of clothes and accommodation just looks grubby and wrong?

Third, a lack of understanding that the tone the Government sets has implications for the real economy - jobs, investment and activity. The constant moaning about the difficult legacy the Conservatives left is not just self-serving but has created a downbeat feeling in consumers and businesses. We need more confidence not less and Labour’s doom and gloom message may seem like smart politics but it is dumb economics.

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At the end of this month, Rachel Reeves will present a budget which gives the Labour Government the chance to re-set its purpose and sense of mission.

Keir Starmer says he wants the Government to act in the long-term interests of the country rather than the short-term interests of his party. Great words.

He also says he is on the side of “ordinary working people”. Hard to define who these people are - do they for example include any pensioners? - but not a bad sentiment.

To make a real difference the Government needs to stop tinkering, which is a bad habit of most Governments, and think more fundamentally about what it should and should not be doing.

Take for example defence. Private armies tend to be a bad thing. Defence is a state monopoly and should remain so and patently needs more money spent on it now.

Then take health. Health is not quite a monopoly but the NHS is a failing organisation. Poor morale, inadequate investment in new technologies, so large that individuals within it feel powerless, lack of strategic thinking and in particular a failure to focus on preventing rather than curing illness.

Throwing more money at the NHS is not the answer. That was tried by the last Labour Government and it failed. Fundamental reform is needed. The state should set both objectives and standards but does one monolithic organisation really have to deliver everything? Labour, as the creator of the NHS, is the only party the public would trust to reform it.

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Real reform, including new ways of delivering services, objectives that make sense and are pursued consistently as well as an openness to community and privately owned business delivering services, is urgently required.

If the UK Government wants to make large savings it needs to ask itself why on earth it is intervening in certain markets at massive cost to taxpayers.

A classic example of this is the long-term savings market, in particular pensions.

Tax relief on pension contributions costs us - all taxpayers - about £50 billion a year and more than half of this relief goes to those who pay tax at more than the basic rate.

This means that taxpayers as a whole are subsidising the retirement of those who are well off.

Why?

Surely the only valid reason for the Government to intervene in the long-term savings market is to provide assistance to those who, without that assistance, would be unable to afford a decent basic standard of living in their old age and would therefore require Government subsidy. The Government should not be shovelling large subsidies into the pockets of those who frankly can do their own saving.

There is no compelling justification for the state to give tax relief on pension contributions at more than the basic rate of tax. There is some argument to provide relief at 25% or even 30% so that those who pay basic rate tax have an even greater incentive to save but relief at 40% or 45% - No. The country cannot afford it and we simply should not do it.

Such a change would cause howls of anguish - taking away someone’s sweeties always does - but it must be done.

Those who argue against such a change tend to do so on three grounds.

First, that it would introduce complexity. Yes, it would but most things in life are a bit complex and if the change was with sensible notice it could be prepared for.

Second, that it would disincentivise pension savings. For higher rate taxpayers that might be true but they don’t need incentive. For basic rate taxpayers - the people you want to incentivise the most - a rate of relief above 20% would add to their incentive.

Third, it would cause problems in the public sector because higher paid workers would be asked to pay considerably more tax before they retire. This disadvantage is actually an advantage. The cost of final salary pension schemes, now almost exclusively confined to the public sector, is absolutely crippling and grossly unfair to the general taxpayer. If higher tax bills created the impetus to scrap final salary pensions for higher paid workers in the public sector that would be a double win.

Be bold Rachel, be bold.

Guy Stenhouse is a notable figure in the Scottish financial sector. He has held various positions, including being the Managing Director of Noble Grossart, an independent merchant bank based in Edinburgh, until 2017