Nearly a quarter of Hemel Hempstead households to be impacted if benefits only increase with wages

Nearly a quarter of working-age families in Hemel Hempstead are set to lose out if the Government increases benefits at the same rate as wages, rather than inflation, new analysis shows.

On October 31, former Chancellor Kwasi Kwarteng was to set out a plan to fund the tax cuts announced in his controversial September mini-budget.

He has been replaced by former Health Secretary Jeremy Hunt.

The new plan was set to include a decision on whether benefits will be increased by the same rate as wages – which at the current rate of 5.4% would amount to a real-terms cut – or prices, which soared almost 10% in the year to August.

New analysis by the Joseph Rowntree Foundation charity reveals that an estimated 22% of working-age families receiving means-tested support in Hemel Hempstead – 9,630 households – will be impacted if benefits were only to rise in line with wages.

The planned increase would also apply to child benefits, which are claimed on behalf of 18,300 children in the area.

This makes Hemel Hempstead one of 193 Conservative constituencies where a fifth or more of families are set to lose out if benefits only rise by wages, including Prime Minister Liz Truss's seat of South West Norfolk.

The same is true of 180 Labour seats, and 34 held by the Scottish National Party.

JRF says politicians need to "think long and hard" about withholding money from their constituents, saying that the basic rate of benefits is at a historic low in real terms.

Katie Schmuecker, principal policy advisor for the charity, said: “We know millions of families have already gone without the essentials this year, missing meals, not cooking hot food or having hot showers.

"We know people have gone into arrears on their bills or taking on debt to pay for the basics.

"It is unconscionable that the Government should be considering cutting their ability to pay for what they need," she added.

Separate calculations from the Child Poverty Action group estimate around 200,000 children across the country could be pushed into poverty if the move were to go ahead.

The organisation said the UK already faces a "child poverty catastrophe" and that the policy risks "ruining the lives of many more children".

And research by the Resolution Foundation has found that some working parents on Universal Credit could lose out by almost £1,000 if support was only raised at the same rate as wages.

Some Conservatives have come out in favour of a more generous uplift – Penny Mordaunt, a cabinet minister, has said that it "makes sense" to raise benefits by inflation.

A spokesperson for the Department of Work and Pensions said: “The Secretary of State commences her statutory annual review of benefits and State Pensions from late October using the most recent prices and earnings indices available.

“We are committed to looking after the most vulnerable which is why we’ve delivered at least £1,200 of support to families this winter, while also saving households an average of £1,000 a year through our Energy Price Guarantee.

"This support is on top of the annual working-age benefits bill, which is over £87 billion.”