CALLS have been made for employers to pay their Oxford staff higher wages because of its "unaffordable" housing costs.

Green party Oxford City Councillor Sam Hollick said people should be entitled to at least £8.93 an hour in Oxford – or £17,645 a year on a 38-hour week – because of the high costs of living.

He compared the city to London, where a "London Living Wage" is set at £9.40 per hour and some organisations such as the Civil Service and schools pay more because of above-average accommodation costs.

It comes after the so-called "national living wage" was introduced by the Government across the country, replacing the legal minimum wage for people aged 25 or older.

This means firms must now pay their staff at least £7.20 an hour, prompting business groups to warn some would struggle to shoulder the extra cost.

But Mr Hollick said the new wage was not enough for people in Oxford. He added: "The cost of rent in Oxford is one of the biggest factors, which can make living here unaffordable.

"The government's new 'living wage' needs to be a lot higher for it to be considered a real living wage."

According to the Living Wage Foundation, an organisation independent of the Government, employees and their families need to earn at least £8.25 an hour to live without poverty outside of London.

This is more than the Government's national living wage, however Labour-run Oxford City Council has separately pledged to pay what it calls the "Oxford Living Wage", at £8.93 per hour.

It pays this to staff and agency workers and also requires contractors with fees over £100,000 to pay it as well.

Labour city councillor Tom Hayes said: "At the moment, I am not convinced by the government's rate and neither is the Living Wage Foundation, which is evidence they have not got this right."

But Graham Jones, joint-chairman of Oxford business group ROX, warned that the higher wage requirement could force some firms into reducing the number of employees or hours offered.

He added: "Higher wages are good for employees, but although some businesses will be able to absorb the costs through efficiency savings there will be those who need to increase prices, or the reality could be a loss of jobs."

The minimum wage for those aged 18 to 20 is £5.30 per hour and £6.70 per hour for those aged 21 to 24.