Haulage firms have united in backing the Chancellor's opinion that a cut in fuel duty has a positive effect on the UK economy.

The Road Haulage Association (RHA) and Freight Transport Association (FTA) welcomed a new report from the Treasury, which showed the costs of implementing a reduction in the levy could be offset by the economic boost it will provide.

According to the study, by not putting up the tax, the government could raise an extra £7.5 billion for the country's finances over the next 20 years. The FTA claimed it had been telling ministers about the potential benefits of freezing and reducing fuel duty for years and was pleased the government had finally caught up with its findings.

Jack Semple, director of policy at the RHA, commented: "The important thing to ensure now is that this economic and tax reality becomes embedded as a core Treasury and political thinking as we look ahead to the next Parliament."

Despite the announcement, British rates of fuel duty are still the highest in Europe. The FTA estimated the tax costs commercial vehicle companies £116 million each year and claimed a three pence per litre cut would save the transport industry around £350 million every 12 months.