Cutting fuel duty by 2.5 pence per litre could create 180,000 jobs without costing the government any tax revenue.

That is according to new research by the Centre for Economics and Business Research.

Initial findings from their latest report, based on figures from the Office of National Statistics, were presented to Treasury minister Chloe Smith by the Freight Transport Association (FTA) and other organisations supporting the Fair Fuel UK campaign.

The report says that the stimulus a cut in fuel duty would provide the economy would offset the reduction in raw fuel duty take.

James Hookham, the FTA's Managing Director of Policy and Communications, said: "This report is proof positive that cutting fuel duty would be a `win-win' for business and the government.

"A cut in fuel duty of 2.5 pence per litre would save truck operators £300 million a year - a welcome respite from serious commercial pressure - but more than this, it would create 180,000 jobs in the first year in the UK and increase our gross domestic product by 0.3%."

The report also finds that if the Chancellor were to cut fuel duty by five pence per litre an extra 30,000 jobs would be created, and while the Treasury would lose £1bn from fuel duty it would, the FTA says such a loss would be balanced out.

"If the Chancellor went a step further and cut fuel duty by five pence per litre it would create a further 30,000 jobs; the short-term hit to Treasury coffers would be relatively small beer in comparison with the stimulus it would provide the economy in the longer term," said Mr Hookham.

He concluded: "This evidence shows that the power to stimulate the economy, actually creating real growth and jobs, is well within the Chancellor's gift. The parlous state of the UK economy demands bold and decisive action, we now know that being bold with fuel duty cuts supports the government's objective of stimulating growth.

"We urge him to extend the logic he used in last year's Budget and cut fuel tax to bind the economy."