Money (8)

The introduction of the National Living Wage is expected to cost businesses in the UK an extra £1 billion, government advisers have said.

The Regulatory Policy Committee believes that the National Living Wage, compulsory for over 25s from April, will add an estimated £804.4 million to businesses' wage bill. Plus £234.3m worth of "spillover" will take the overall total above the £1bn mark.

The Institute of Directors (IoD) piled on pressure for the Chancellor George Obsorne to "come good" on his promise of tax cuts.

IoD director Seamus Nevin said: "IoD members supported the introduction of the Chancellor's living wage as part of a deal he made with business - lower taxes for higher wages.

"It is imperative that the government now comes good on its promise of less red tape, fewer regulatory hurdles, and a lower rate of corporation tax to help employers absorb these additional costs and raise pay."

The IoD estimates that businesses will pay the government an extra £12bn over the next five years via the apprenticeship levy, red tape and auto-enrolment.