Brown also said that the government would create an investment fund to put money into small and medium-sized businesses.
The decision over removing red tape was welcomed by the industry. Graham Watts, the Construction Industry Council chief executive, said: "It's pleasing that the industry has been singled out."
RICS economist Milan Khatri also supported the move, claiming it was necessary to improve productivity. He said: "Productivity has not been improving for the last few years. The government is obviously worried that its attempts to improve it is not coming through."
Watts added that although further investment in small businesses was welcome it was unlikely to have a great impact. He said: "All these small and medium businesses are in for a big shock when they have to make their new National Insurance payments later this month. "Gordon Brown's statement is not really going to help small businesses in their day-to-day operations."
n The Inland Revenue this week pledged to take action against contractors who fail to offer statutory sick and holiday pay.
In a statement accompanying this week's Budget the body said: "The Inland Revenue will take compliance action against contractors who make an intentional false declaration." The statement said that the government intended to reform the Construction Industry Scheme.