Labour accuses the government of ‘short-changing the North’ over Tier 3 area support

By October 18, 2020NEWS

Labour accuses the government of ‘short-changing the North’ as analysis reveals many businesses in Tier 3 areas will get less than a third of the support offered nationally in March  

  • Labour warns the North is being let down and short-changed, with most businesses receiving just a fraction of the support offered nationally in March
  • Many businesses in Tier 3 areas will get just £500 per week compared with £1,666 per week in the first lockdown
  • Ministers are also forcing businesses in Tier 2 and 3 areas to return nearly half a billion pounds in emergency cash – despite businesses there facing a fight for survival

Ministers are short-changing and letting down the North, Labour is warning today, with many shut-down businesses in Tier 3 areas receiving less than a third of the support offered to businesses nationally during the first lockdown in March.

Analysis by Labour can reveal that a large proportion of businesses shut down in Tier 3 areas – like those in the Liverpool City Region – will receive just £500 per week under the new Local Restrictions Support Grant scheme compared with £1,666 per week available in March. The smallest businesses will receive £334 per week, compared to £666 in March.

Meanwhile businesses in Tier 2 areas across the North and Midlands – including areas in the North East, Greater Manchester, Cheshire, Derbyshire, Yorkshire, and the Tees Valley – will not be eligible for any additional support as they are not legally closed, despite facing tough social distancing measures that will reduce their income.

Labour’s analysis shows that Ministers are ‘short-changing’ areas facing tougher local restrictions:

  • The vast majority of shut-down leisure and hospitality premises will only be able to access either £334 or £500 per week, depending on their size. That’s either half or a third as much as the support available for businesses during the national lockdown.
  • Businesses have warned that this funding will not cover their weekly costs, of rent, utilities and insurance, alongside the cost of having to throw away stock they can no longer use.
  • The Job Support Scheme extension for businesses legally shut by government will only cover 67 per cent of an employee’s salary, compared with 80 per cent in the first national lockdown.

Labour can also reveal that Tier 2 and 3 areas in the North and Midlands are currently being stripped of over £448 million pounds in emergency funding despite restrictions tightening.

This includes £44 million being clawed back by Ministers from Liverpool City Region, £19 million from Manchester, and almost £8 million from Sunderland. Bolton has received £600,000 through the Local Restrictions Support Grant Scheme, but this will be wiped out and then some as the local council is still being forced to hand back £10 million.

Labour is calling on the government to urgently reallocate this funding so local councils can use it flexibly to help businesses survive the crisis.

Lucy Powell MP, Shadow Minister for Business and Consumers, said:

“The Government is short-changing businesses and communities across the North.

“Locking them down but offering just a third of the support given to businesses nationally during the first lockdown is a kick in the teeth that makes a mockery of the levelling up agenda.

“Clawing back hundreds of millions of pounds from areas facing tougher restrictions just adds insult to injury.

“They need to urgently rethink their approach and ensure areas facing the toughest restrictions get a fair deal.”

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