THE exciting thing this morning is the quad.

Back when the production of this newspaper involved proximity to actual metal and you could (as long as you didn't touch anything) go down to see the letters you'd written being placed, back to front, into the chase, a quad was a piece of metal which provided the spaces between the words, or filled out a blank line. I gather quad is also an abbreviation for Quaaludes, or methaqualone, a hypnotic sedative which produces similar blankness in its devotees.

I mention these instances of vacancy in the hope that they are not shared by the "quad" of David Cameron, George Osborne, Nick Clegg and Danny Alexander, which meets this morning to finalise the details of Wednesday's Budget. Not a very well-founded hope, I'm afraid, because the Government's economic policy so far has been characterised by an absence of purpose.

There are some aims, of course, but they are petty compared with what needs to be done. To have managed the top two priorities – holding the Coalition together and not scaring the markets – is not a negligible achievement, and it is true that the economic prospects and public finances are in better shape than we might have expected a few months ago. But avoiding catastrophe is not improvement; growth is too sluggish, and unemployment too high.

Worst of all, the relationship between the Conservatives and the Liberal Democrats has not produced what many hoped for – a government simultaneously socially liberal and, in economic terms, classically liberal. Instead both parties, obsessed by the appearance of their policies rather than their content, are in danger of alienating the majority of their core support.

The issue on which pre-Budget speculation has focused most intensely – the 50% tax rate – is an outstanding example. The LibDems are said to have accepted that it may not be doing any good. It certainly doesn't bring in the £2.6 billion which was anticipated; the most optimistic figures suggest not more than a couple of hundred million (and the Institute of Fiscal Studies thinks it actually costs more than it brings in).

Obviously, if abolishing a tax would increase revenue, it should be abolished. But that looks terrible, because it looks like the Tories rewarding the rich. For most of Mrs Thatcher's years in office, in fact, the top rate was 60%. But the lesson of those years is not to take Geoffrey Howe as your model, as Mr Osborne appears to, but to remember what happened when Nigel Lawson slashed the rate to 40p. The income from those taxpayers doubled at once, from 11% of total receipts to 22%.

Nor should the Tories be worried about the Liberal Democrats claiming the credit if Mr Osborne meets, or even improves upon, the commitment to raise the tax threshold – a cut for everyone, but a particular benefit for the worst-paid workers. It ought to have been a Conservative priority in any case.

While agonising over the horse-trading on these questions, and wondering how to row back from the planned cuts in child benefit while retaining the general principle that the very well-off should not get it, the Chancellor is missing the point at which the tax system is most damaging to his own party's supporters, and those whom it hopes to woo.

That is not the 50% band, but the 40% band which, until a few years ago, was meant to hit only the very highest earners. It's worth noting that that percentage makes it the fourth-highest income tax rate in the developed world; much higher than Germany, France or the USA.

A staggering 3.5 million people now fall into this bracket, and many of those just over the £43,000 salary threshold are the people most squeezed by the current cuts. These are not bankers at Goldman Sachs but pharmacists, social workers, rail depot managers, heads of department at comprehensive schools, police sergeants who do a bit of overtime, small retailers, tradesmen, and the like. If they are the sole breadwinner in a household, and especially if they live in the South-east of England, they do not feel at all rich. To remove child benefit from them while continuing to give it to households with a combined income of £84,000 is manifestly unfair.

This group and an equally, perhaps more, important one – those who do not earn as much as that, but aspire to – ought to be the core support of the Conservative party. More to the point, it is the group that determines elections, because it is also the section of the electorate which deserted the Tories for Tony Blair.

Most important of all, the private-sector workers in this group are the very people upon whom all hopes of recovery depend. Crowd-pleasing attempts to demonise the Fred Goodwins and Stephen Hesters of the City are actually stifling the ability of much more modestly-rewarded workers to create wealth or build their businesses. And unless they do so, there is no chance of reducing unemployment or stimulating growth.

Whether you approve of them or not, many of the things this Government has prioritised – the AV referendum, same-sex marriage, reform of the House of Lords, subsidising wind farms – would be a long way down the list of things needing doing as a matter of urgency. That goes double for most Tory voters.

Meanwhile, the Government has been too hesitant about the things which do need doing – cutting tax on business, removing regulatory costs on enterprise, speeding up planning, simplifying employment law, halting the accelerator on fuel duty, slashing bureaucracy in the public sector. Yet these are all the things that Conservative voters want, and probably quite a few Liberal Democrat and Labour voters, too, for that matter.

The Chancellor's focus on his uneasy alliance with the Liberal Democrats, and the political signals sent by wheezes like the mansion tax, the tycoon tax, or schemes for the avoidance of stamp duty is in danger of obscuring what matters, which is accepting that recovery cannot be created by the Government. It can only create conditions in which private individuals and firms bring it about. And you do that by getting out of their way. Or, in other words, acting like a Tory.