It is rarely an encouraging sign when the Chancellor promises a "Budget for growth". One is reminded of the reply of an old Teamsters union leader who, asked if his outfit held much power in the transport industry, said: "Look, senator. Being powerful is like being ladylike. If you have to say you are, then you probably ain't." The more George Osborne insists that the coalition's measures will revive growth, the less persuasive he seems. And he is under pressure from his own right flank to cut taxes to stimulate demand, as Tim Montgomerie, editor of ConservativeHome, writes on page 14. The politics, and the economics, of austerity are becoming uncomfortable for the coalition.

The Budget is likely to worsen, rather than improve, the economic prospects of most of the population. Of no group is this more true than the "squeezed middle" - those too poor to thrive in a market economy, but too rich to rely on state benefits. As the Institute for Fiscal Studies reported on 31 January, roughly 750,000 people will become higher-rate taxpayers as a result of the coalition's decision to reduce the starting threshold for the 40 per cent band from £37,401 to £35,001.

The effect of this move is not only that the marginal tax rate for those affected will double, but also that they will fall victim to the Chancellor's raid on child benefit. The plan to abolish the benefit for all higher-rate taxpayers means a loss of £1,055 a year for one-child families and almost £2,500 for those with three children. As Gavin Kelly, the chief executive of the Resolution Foundation, wrote in the New Statesman on 10 January, this measure, combined with the VAT increase and cuts to tax credits, will result in "the biggest squeeze on living standards since the 1970s".

The increased revenue from the 40p rate will be used to fund the coalition's laudable pledge to take all those earning less than £10,000 out of income tax. But the measure could have been paid for by increasing, rather than reducing, taxes on Britain's bloated and subsidised banking sector. The government's bank levy is expected to raise just £1.25bn this year, £2.25bn less than Alistair Darling's bonus tax. The coalition's neglect of the middle classes offers Labour a chance to win back some of the 2.8 million votes that it lost from the ranks of C1 and C2 voters.

Since he became leader, Ed Miliband has made an astute pitch for this section of the electorate. He is right to oppose the coalition's VAT increase and its cuts to child benefit. And he is right to call for the 50p tax rate to be made permanent. Polling data suggests that, in the post-crisis world, higher income taxes for high earners are no longer electorally toxic. A YouGov survey published on 30 January found that 49 per cent of voters support a permanent 50p rate, and 33 per cent oppose it. If, as seems likely, the coalition eventually scraps the 50p rate while retaining the VAT rise, it will find itself on the wrong side of public opinion.

If Mr Miliband wants to prove that Labour can act as a constructive opposition, he should praise the decision to raise capital gains tax to 28 per cent on non-business assets while pushing for the introduction of the original Lib Dem pledge to make capital gains tax and income-tax rates equal. The stalled recovery has created the space for an alternative. It is now up to Labour to provide it.