WORCESTER'S MP has called for more city employers to increase wages - admitting his Conservative Party "made the mistake" of wrongly believing it would destroy jobs in the 1990s.

Robin Walker had called for more firms to follow the likes of Worcester City Council, Costa Coffee and Lidl who have become accredited Living Wage employers in recent years.

The Living Wage is currently £7.85-an-hour outside of London, is a voluntary pay rate set by independent experts and differs from the minimum wage, which is a legal requirement.

The minimum wage has just gone up three per cent to £6.70, the biggest real-terms rise in seven years.

Chancellor George Osborne announced in July's Budget how all over-25s will be entitled to a new National Living Wage from April, starting at £7.20 and rising to £9-an-hour by 2020.

Mr Walker has now acknowledged that the conventional Tory position of the 1990s, which included opposing the 1999 launch of the legal minimum wage, was short-sighted.

At the time many Conservative MPs and ministers suggested direct Government control of the lowest pay grades would wreck businesses and cause havoc with job creation.

Mr Walker said: "It used to be argued that a higher minimum wage would simply destroy jobs, and in the past my own party made the mistake of subscribing to that view.

"Having fostered the most successful economic recovery of major Western nations and seen more jobs created in this country than in the rest of western Europe combined, we now have a remarkable opportunity to show we can increase jobs and pay at the same time."

He also said he now believes more employers are recognising the value of paying people extra money.

The city council's old Labour leadership made the authority an accredited Living Wage employer in 2014, something the current Conservative administration has continued with.

"These changes may seem small but they're a big step in the right direction," he said.

"Many businesses are already recognising the benefits of higher pay and I pay tribute to those such as the city council, Costa coffee and Lidl who have already embraced this approach by becoming accredited living wage employers.

"I hope we'll see even more in the future."

Back in the 1990s there was fear launching the minimum wage would cost two million jobs, but it proved unfounded.

When David Cameron contested the Midlands parliamentary seat of Stafford at the 1997 General Election as an outsider, he strongly argued against the minimum wage - but is now a strong supporter of it.

Yesterday Tory big beast Ken Clarke urged George Osborne to hold firm on cuts to tax credits despite fears of a backlash from voters.

The former Cabinet minister admitted the changes - part of the package including the new £7.20 living wage from the spring - would be "unpopular" and have unpredictable effects.

But he insisted the current system is "subsidising low pay" and reform is "essential".

The comments, on the BBC's Andrew Marr show, come amid growing pressure on the Government to lessen the impact of the welfare cuts on working "strivers".

Mr Clarke said: "My advice to George is put your tin hat on, get on with it.

"Don't put it off because in the short term it is going to be unpopular."