The Chancellor pledged to reduce the burdens on business but industry groups remained to be convinced that a red tape bonfire would be lit.
Gordon Brown said the Government would cut back on the flow of regulations and accept recommendations in a report from an official task force today which urged that administrative costs imposed on business should be slashed.
MPs heard that the number of business inspection bodies will be reduced from 35 to nine, while the number of public sector inspectorates will be cut from 11 to four.
A single body will take over the responsibilities of four consumer and trading standards inspection bodies.
The Chancellor said there will be a million fewer business inspections a year, a reduction of a third, but he promised tougher penalties for firms which broke rules.
VAT will be simplified for 600,000 firms, and the Inland Revenue and Customs will consult on a single tax account for small businesses so there will be a single point of contact for VAT and corporation tax.
"It is right to lessen the burden of regulation and enhance our flexibility while still ensuring high standards," said Mr Brown.
There would be a "light and limited touch" on inspections where there was less risk to consumers and employees.
Federation of Small Businesses chairwoman Carol Undy said: "Businesses have been promised bonfires of red tape in the past and they have never been ignited.
"Whether or not the report will result in 'fundamental change' and 'a red tape revolution' awaits to be seen. Businesses are cynical because of past broken promises - 30 reports, seven white papers and two acts of parliament during the last 20 years alone."
Colin Stanbridge of the London Chamber of Commerce said: "This Budget is notable in that it gives no medium-term assurances about the future trajectory of business taxes.
"In order to maintain our international competitiveness there is an urgent need for business taxes to be cut - and a real fear that after the election they will in fact rise to pay for borrowing."