Yet with little cash in the public purse to stimulate growth, Hammond must find some way to persuade the private sector to put money to work. Business investment has slowed over the past 18 months, and the Bank of England expects Brexit uncertainty to hit it further.

This is a problem. About 10% of Britain’s economic output is derived from business investment. Therefore, even a small dip in business spending can wipe out the country’s growth. If companies do not carry on expanding factories and ploughing cash into research, the productivity woes are likely to worsen.

Were there no Brexit uncertainty, it would be a perfect time to invest. Interest rates have only just edged up from record lows, world trade is rebounding and a weak pound means exporters are ideally placed to take advantage.

“Whatever line you take on Brexit, you can’t deny it causes uncertainty. Business will be inclined to sit on its hands,” said Douglas McWilliams, chairman of the Centre for Economics and Business Research. “The government must give companies a reason to spend.”

Here are five ways that the government can encourage investment in Wednesday’s budget and beyond. Some are more practical than others, yet with the government seemingly more interested in fighting among its members than in running the country, even some wild ideas should be welcome.

1 RAISE ALLOWANCES
The most straightforward way to encourage companies to invest is to give them a tax break. At present, firms get tax relief on up to £200,000 of annual spending on new factories or equipment, a figure that was cut from £500,000 in 2015. The Institute of Directors and British Chambers of Commerce are calling for a temporary boost to £1m during the Brexit process.

“We need a big, bold incentive to get more firms investing — particularly ahead of the Brexit transition,” said BCC director general Adam Marshall.

The IoD estimates the upfront cost to the chancellor at £2.7bn a year. If the Treasury sets off an investment boom and allows companies to claim all the tax benefit upfront, it could save money in subsequent years, given tax relief is typically spread over several years.

With borrowing on course to come in slightly below the Office for Budget Responsibility’s target for this year, Hammond can afford a slight dip in tax receipts right now.

2 ‘SINGAPORE-ON-TEES’
Business needs to hear answers on how to deal with the lack of a customs union with the EU. Not everyone is placated by the idea of drifting to World Trade Organisation arrangements for dealing with our biggest trading partner. The idea of a “free port” — an area outside Britain’s customs border — is one solution. One think tank. Policy North, which represents businesses in northeast England, is lobbying to turn Teesport into such a free-trade zone. The idea is to allow firms that set up shop on the quayside to freely import components and export finished products without facing tariffs or customs checks. The idea is modelled on free trade zones around the world, including the huge Jebel Ali in Dubai and similar schemes that have helped boost trade in Singapore.

Policy North thinks the idea could be expanded to cover nine big ports in the north of England, encouraging multinationals to set up shop and potentially creating 612,000 jobs and adding £12bn to the region’s annual output. Stephen Purvis, chairman of Policy North, said: “The northeast has some outstanding manufacturing assets, from the Nissan factory in Sunderland and Hitachi in Co Durham to the precision engineering hub in Gateshead.

“A freeport would open the door to attracting many more Nissans and Hitachis to the region with new international trade partnerships post-Brexit.”

Of course, such a project could fall foul of upcoming trade negotiations with the EU, given that Brussels might not look kindly on a huge free-trade zone on its doorstep.

For now, most businesses continue to urge the government to prioritise as close a trading relationship with the Continent as possible. Even so, it could offer hope for an alternative future.

3 REGIONAL TAX BREAKS
Entrepreneurs outside the capital need a shot in the arm. One way to provide it is the controversial Enterprise Investment Scheme (EIS), which offers generous tax breaks to investors in private companies.

The Treasury is widely expected to launch a crackdown on the EIS this week, following accusations that it has been used by wealthy investors who are avoiding tax by ploughing millions into low-risk investments.

Business groups are urging the chancellor not to hold back genuine innovation — to clamp down on abuse, without killing the scheme. The IoD suggests Hammond could go further, by using EIS’s smaller start-up focused cousin, the Seed Enterprise Investment Scheme (SEIS), to offer even juicier incentives in certain parts of the country.

At present, investors get 50% tax relief on investments of up to £100,000 in companies with fewer than 25 staff that are less than two years old.

The IoD has suggested a scheme to boost this to 60% in northwest England. If that works, it could be introduced in other regions at relatively low cost to the exchequer, spreading investment around the country.

Currently, 60% of investments under the EIS and SEIS are funnelled into companies in London and the southeast. Regional incentives such as this could potentially fall foul of EU rules on state aid. After Brexit, it could get a lot easier.

4 BUILD IN MY BACK YARD
For the chancellor, pressure to invest is perhaps greatest in housing. Figures last week showed that the number of new homes coming on to the market climbed to nearly 220,000 in 2016-17, the highest since the financial crisis, but still some way short of the 250,000 experts say is needed.

The rebound in housebuilding has been driven largely by the big developers. Fewer than one in eight new homes is built by small or medium-sized companies, according to the Home Builders Federation (HBF) — down from nearly 40% in the early 1990s.

Since then, changes in the planning system have made it tough for smaller players to get involved, leaving the market dominated by a handful of big developers frequently accused by politicians of deliberately building slowly to prop up land values.

The housing white paper in February floated plans to force local authorities to allocate 10% of the land earmarked for residential developments to small sites. The government is rumoured to be considering raising this to 20%.

There are other ways to level the playing field, according to the HBF. One is to make it easier for people to sell off their gardens for building. In 2010, domestic gardens were reclassified as greenfield sites amid fears that “garden grabbing” by developers was turning some suburban areas into concrete jungles.

Reversing that decision would free up a lot of land. In the country as a whole, roughly 7% of land has been built on. If you strip out green spaces, including gardens and allotments, however, that figure falls to just above 2%.

5 RELEASE BRITAIN’S SAVINGS
Why are our airports, toll roads and water companies owned by foreign pension funds and infrastructure investors? Part of the reason is the Brussels-created red tape binding our pensions and insurance companies — and the way it is implemented with an extra layer of gold-plating by our ultra-cautious regulators.

An investigation by the Treasury select committee earlier this year gave credence to the industry’s claims that the new Solvency II rules are impinging their ability to put their cash — ie, the nation’s savings — to work in support of building houses, schools and hospitals. It also limits their ability to bankroll the market for equity release mortgages — a tool that could help ease the housing market pain.

The boss of one FTSE 100 insurer told The Sunday Times last week that a tweak to these extremely complex rules could free up “tens of billions of pounds” for investment across the industry. Much of that cash could be invested as equity in infrastructure projects, and then further leveraged to release even more money.