Poorer areas receive less business cash in 'betrayal' of voters, claims Labour

Some of the poorest communities in the North and Midlands facing the toughest Covid rules will get less business cash than richer areas, new Labour analysis shows. 

Chancellor Rishi Sunak was accused of betraying voters in the most deprived areas with a Government business grant scheme, which offers more or the same amount of money to affluent and Tier 1 areas, as to some of the poorest communities who are heading into Tier 3.

Labour said the Additional Restrictions Grant (ARG) – which offers a one-off £20 per-head payment to local authorities – failed to consider deprivation levels and how long an area would be under harsher rules.

Swathes of the North and the Midlands will go into Tiers 2 and 3 on Wednesday if the plan is approved by MPs in a crunch vote.

Only Cornwall, the Scilly Isles and the Isle of Wight will be put in the lowest Tier 1 – meaning 99% of England faces restrictions on hospitality and seeing friends and family indoors.

Blackpool, in Tier 3, is ranked as the poorest area but it was due to receive £2.7million – compared to £2.8million for more affluent South Oxfordshire, which is in Tier 2, the analysis found.

Despite being ranked the third most deprived area, Tier 3 Manchester receives £11million, compared to £11.3million for Cornwall, which is in Tier 1.

Tier 3 Blackburn, the 25th most deprived, will receive the same £2.9million as Tier 2 East Herts Council – ranked 457th in the deprivation index.

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Shadow Business Minister Lucy Powell said: “The Tories’ approach betrays some of the most deprived communities under the toughest restrictions and does not recognise the additional pressures that many areas face.

“It can’t be right that richer areas in Tier 1 or Tier 2 receive the same funding as those most in need of extra help.

Latest infection raise huge questions about the tier areas have been placed in

“Rather than widen regional disparities, and level down the country, the Chancellor should review this fund and ensure it works for those with additional needs because they have been in lockdown down for longer.” 

Amid a furious Tory backlash over the new tiers system, the Treasury was understood to be looking at additional support for the struggling hospitality sector, which has been hit hard by the restrictions.

The Prime Minister’s spokesman said all financial support was kept “under review” but pointed to existing grants for hospitality and the continuation of the furlough scheme.

He added: “We are under no doubt of the difficulty that the hospitality industry are facing, especially as we move towards Christmas, which is obviously a very busy time for the hospitality industry.”

The Department for Business, Energy and Industrial spokesperson said: “This analysis is misleading and fails to take into account a host of other support measures that we have made available, including grants of up to £3000 for businesses that are required to close due to Tier 3 restrictions.

“We understand the pressure businesses are currently under and have acted to support them through the pandemic with a £280 billion support package, which is among the most generous in the world.”

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