THE Federation of Small Businesses has given a mixed reaction to Bills announced in the Queen's Speech at the State opening of Parliament.

The FSB expressed concern at the introduction of a Tax Credit Bill aimed at introducing a new tax credit system.

The FSB has objected to the operation of the Working Families Tax Credit, which currently poses immense problems for small employers as the credit is operated through the pay packet.

Members were, however, pleased with the announcement of a Competition and Enterprise Bill to promote enterprise and improve competition laws.

They have welcomed a number of items that form the basis of this Bill including a new flat rate of VAT for smaller businesses and the removal of automatic VAT fines. The FSB is hopeful that this Bill will include clauses to remove the Crown's preferential right to recover unpaid taxes ahead of other creditors. The FSB has for some time been calling for such a measure

Commenting on the Government's proposals in the Queen's Speech, Steve Collie, FSB West Midlands Policy Chairman said the body was "gravely concerned" that it may decide to operate tax credits through the pay packet.

"We will be voicing our opinion as loudly as possible," he said.

"It is an invasion of employee privacy and a distraction and expense for businesses.

"The FSB is however, immensely pleased that a long-held policy of the FSB is at last being implemented, namely, removing the Crown's preferential right to recover unpaid taxes ahead of other creditors".