The Transport Committee has criticised the Treasury’s decision to change the financial incentives for low-carbon vehicles in its ‘Plug-in vehicles, plug in policy’ report that looks into the effectiveness of the Government’s efforts to promote low-emissions vehicles.

In the report, the committee heard from witnesses, including General Motors and Toyota, who complained that the changes announced in chancellor George Osborne’s Budget earlier this year risk creating “instability” in the market, with company car driver’s benefit-in-kind rates jumping from 5% to 13% in April 2015.

“We regret the Treasury’s decision to change the financial incentives framework for low-carbon vehicles without prior consultation,” said the report.

“Such unexpected changes to these incentives risk creating instability in the market for plug-in vehicles,” the report continued, accusing the Treasury and DfT of lacking a consistent approach.

GM’s evidence to the committee said the Budget changes to the tax on low-emissions vehicles have “made purchasing a plug-in electric vehicle less attractive to the corporate consumer with little overall economic benefit to the Exchequer.”

It called for the Government to draw a line at 50g/km to distinguish ultra-low emission vehicles for taxation purposes.

The Transport Committee is tasked with scrutinising the Department for Transport, examining its expenditure, administration and policy.

The report, issued late last month, was designed to examine the Government’s approach to promoting electric and plug-in hybrid vehicles through the incentive programme of up to £5000 for cars and £8000 for light commercial vehicles, as well as the investment in a charging infrastructure through the Plugged In Places scheme.

The report concluded that the financial incentives for purchasing vehicles are necessary to kick-start the market that the Government hopes will have “tens of thousands of vehicles on the road” by 2015.

At the end of 2011, 1052 grant-eligible vehicles were registered, and despite assurances from the minister for sustainable travel, Norman Baker, that this is on-target, other expert witnesses claimed demand is “lagging behind”, and take-up on grants is currently underspent by £30m.

The National Chargepoint Register also came in for severe criticism, with only 500 chargepoints listed despite the DfT estimating that more than 3000 are live.

“It’s hard to understand why the DfT’s database does not contain at least those chargepoints to have been installed using public funds,” said the report, calling for a comprehensive registry to be made available within six months.

The Transport Committee also questioned whether public charging points actually encourage take-up of electric and plug-in hybrid models, as it found no correlation between areas that have used public money to install charging points and registrations of vehicles eligible for the low-emission vehicle grants.

Follow BusinessCar on TWITTER.