The Prime Minister has defended his call for businesses to give their staff a pay rise, saying it is time for workers to see the benefits of an improving economy.

Speaking on a visit to Chatham today, he said it was important that companies consider improving wages as the economic conditions were the best they had been for a long time.

He also said he would be in favour of an earlier date for a referendum on the UK’s membership of the EU 2016 and said he had no regrets over the “kitchen sink strategy” the party used to try and win the Rochester and Strood by-election.

Mr Cameron, visiting the area for the first time since the Rochester and Strood by-election, said his appeal to businesses to improve salaries for staff did not mean he accepted Labour claims that people were continuing to suffer from a cost of living crisis.

“What it recognises is that we have got the conditions in place now for the economic success to be felt by everybody. Inflation is low and wages are growing ahead of inflation and we want that to continue.”

“What it recognises is that we have got the conditions in place now for the economic success to be felt by everybody. Inflation is low and wages are growing ahead of inflation and we want that to continue”- David Cameron

Asked if he believed pay increases should be extended to those in the public sector, he said:

“In the very difficult years that we have had, you have had occasions when people in the private sector have had a pay cut, whereas we have been able to protect people in the public sector from cash cuts. But obviously public sector pay has grown ahead of inflation so people are seeing some real wage increases.”

He did not want to dictate to businesses what they should do, saying he understood that for small and medium sized firms, margins were small.

“I am not dictating to businesses that they should pay ‘x’ or ‘y’ - all I am saying is that we have created an economy that is growing; inflation is low and businesses are succeeding.”

Mr Cameron was visiting Medway after announcing a scheme to boost finance for 500 fast-growing firms, called Help to Grow, should the Conservatives win the general election.

A pilot scheme will be launched at the Budget before the election using £100m from the British Investment Bank, Mr Cameron told the BCC conference.

Asked about the by-election “kitchen sink” strategy adopted by the party last November, he said: “I do not regret personally throwing the team and machine into it because it was very important to fight a strong campaign and not say ‘well, it is hopeless, it is a by-election and all the rest of it. But it was a by-election and that is not the same.”

Mr Cameron visited the Chatham-based Dovetail Games, a world leader with its Train Simulator video games, which now employs 100 people.

He said it was the kind of business that was reaping the benefits of the improving economy. “This is a business that six years ago employed eight people; now it is 98, is looking to expand and is staying right here in Medway and continue its expansion and success.”