Paul Boateng, Financial Secretary to the Treasury, said: 'Many company car drivers will be paying less tax for the benefit of their company car under the new system. Having a company car with relatively low carbon dioxide emissions would help to ameliorate tax liabilities under the new system for any driver.'
He said the new system was designed to achieve lower levels of harmful emissions from cars, and should be broadly neutral on tax revenues 'so in overall terms there is no loss to employees'. In a letter to Anne McIntosh, MP for the Vale of York, Boateng reiterated the Inland Revenue forecast that 'the reforms will lead to a net increase of around 200,000 company cars in the long term'.
He defended the Government's decision to abolish business mileage discounts, saying these could be 'an incentive to drive unnecessary business miles'.