However, no tax is currently charged on cars with zero emissions, while those with emissions of less than 75g/km are taxed at a low rate of five per cent.

Under the changes announced by George Osborne, even cars with zero emissions will be taxed at nine per cent from 2015.

Speaking to the Committee, Graham Smith Managing Director of Toyota Motor Europe, which has major plants in Derbyshire and North Wales, said: "There is an opportunity to reverse what is a fairly negative signal towards the auto sector in the UK, were those changes to be reconsidered.

"There have been one or two budget announcements that have been reconsidered, we would would very much wish to see this added to the list."

The Government could not hope to raise much money from the tax changes because the number of zero amd very low emission vehicles on the roads was so small, he said.

"It is such a fledging market. It is such early days in the market place. The volumes and expensive to the treasury is presently tiny.

"It just seems perverse that the opportunity was taken to make a change in the outlook for benefit in kind . . . at such an inauspicious moment in the development of the market place."

Ian Allen, Manager of Environmental Strategy, General Motors, which owns the Vauxhall plant in Merseyside, said: "I would certainly agree with Graham on that particular point because any positive or negative decisions or announcements have a positive or negative effect on the industry.

"So the negative effect the announcement in the budget had could be reversed by a positive announcement that they were being reintroduced or other incentives are coming in to take their place."

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