The public purse is looted for over £3 billion a year by greedy bosses who force wages down to keep profits high, economist Howard Reed has calculated.

His study for the TUC revealed yesterday the Treasury could pocket over £2bn more in taxes and shave another £1bn off the Benefits Bill if employers paid a living wage.

The calculations are based on last year's living wage - the level needed to cover basic living costs - of £8.55 an hour in London and £7.45 across the rest of Britain which around 4.8 million people are denied.