ALMOST 12,000 families in Southampton will be hit by the Chancellor's latest benefit cut - despite being in work.

George Osborne used his conference speech to launch a fresh assault on welfare spending, announcing a two-year freeze to all working age benefits from 2015.

But the real-terms cut - costing an average of £320 a year - will apply to tax credits, as well as jobseeker's allowance, child benefit, housing benefit and employment and support allowance.

Official figures show that one third of the ten million families affected - three million households - have someone in low-paid work, receiving tax credits.

And they included 11,900 in Southampton in 2013, the latest available figures, of which 10,200 are households with children.

Across Hampshire, there are a further 48,000 low-paid workers receiving tax credits - which will now be cut, in real terms, for two years - of which 42,600 have children.

The Children's Society has attacked what it called a “brutal blow” for millions of families already hit hard by other cuts - warning they would lose £1,300 a year, by 2018.

And the Child Poverty Action Group said: “This is bad news for working-age parents struggling on low wages, already coping with rising living costs and previous benefit cuts.”

The Liberal Democrats hinted they would block the freeze - as the party had in the past - while insisting “no proposals” had yet been put forward in the Coalition.

A source said: “It speaks volumes about the priorities of the Conservative Party that they see benefit cuts for the working age poor as a crowd-pleasing punch line for a conference speech.”

But, in Birmingham, the Chancellor told Tory activists that the move would save £3.2bn a year and was necessary to “protect our economic stability and to secure a better future”.

Mr Osborne said: “Benefits have risen more than earnings since Labour's great recession. That is not sustainable for any nation and it is not fair either.”

He insisted the best way to help families was to “make sure those out of work get a job and those in work pay less tax”.

The freeze will exclude only disability and pensioner benefits, plus women on maternity leave.

The Chancellor hopes that freezing future benefits will be less toxic than taking away benefits that claimants already receive - such as the furore over the 'bedroom tax'.

But the speech also confirmed that a further £9bn of benefit cuts remain to be found, to hit targets set for the next parliament.