Yesterday was a chance for George Osborne to signal he would act to get the economy moving again in order to get the deficit down and begin to turn around his failing ship. Instead he stuck dogmatically to the course which led Britain to the longest double-dip recession since the war and the slowest recovery of any in the last century.

He was forced to break his promises to balance the books and get the debt down by 2015. We now face a shrinking economy this year and an extension of the era of austerity to 2018.

And it is millions of working people on modest and middle incomes, who have already seen the costs of food and fuel continue to rise while wages are squeezed, who will pay the price for this failure.

George Osborne claims he is targeting the work-shy, yet a one-earner family on £20,000 with two children will lose £279 a year from all the changes happening in April - on top of the cost of higher VAT.

And at the same time the Tories and Lib Dems are giving a £3 billion tax cut to the richest people in the country - worth over £100,000 for 8,000 people earning more than £1 million and disproving the government myth that we are "all in it together".

Despite all of George Osborne's rhetoric today about Britain being on "the right track" the hard journey ahead has just got even longer. The Chancellor has broken his promises on borrowing - the main measure on which he has staked his credibility countless times.

The government is set to borrow £212 billion more than they expected - and more than the plans it inherited and condemned at the time for not going far enough.

It meant George Osborne was finally forced to admit the Government would not meet his fiscal rule to get the national debt falling as a proportion of GDP by 2015.

This marked a moment of humiliation for a man who put his faith in the doctrine of "expansionary fiscal contraction".

There are several reasons for this, but central to the problem is the fact that after 31 months in office the coalition still has no plan for how to create jobs and stimulate growth.

In fact the economy is due to shrink again this year, George Osborne admitted yesterday, and growth forecasts have been downgraded again for next year and every year up to 2016.

Ministers fail to realise that by making deep spending cuts and tax rises and failing to increase demand in the private sector they drag down growth and risk setting Britain's economy on the road to international irrelevance.

Over the last two years Britain has grown by just 0.6% compared to the 4.6% the government promised, 3.6% in Germany and 4.1% in America.

It makes for a stark contrast to October 2010, when a brash Osborne told the world: "What you see today, in an uncertain global economic environment, is Britain growing, growing strongly." We are falling behind in the global race.

Of course what matters is not just Britain's place in the world, or on a league table, but the cost in homes and on high streets around the nation. A weak growth rate is the manifestation of lower consumer spending and falling sales for Britain's small businesses, which employ around 14million people.

And it was only last week that ministers were forced to admit their much-hyped Welfare to Work programme was proving worse than doing nothing at all, with only one in 28 of unemployed people referred being able to find a job for six months or more.

Over the last two and a half years we have become used to George Osborne's spin and attacks on his critics but Labour has been clear about what it wants - a plan for growth based on bringing forward infrastructure investment, a temporary VAT cut and a bank bonus tax to fund a jobs guarantee for young people.

This is what a One Nation approach to the economy would look like, rather than a tax cut for millionaires.

Yesterday was a missed opportunity for George Osborne. He showed the world he isn't on the side of hard-working Britons, he doesn't have a plan for growth and he can't control borrowing. It is a terrible indictment of his time running the economy.