Communities in the North and Midlands hit with Tier 3 restrictions are set to miss out on millions from key business support grant in the run up to Christmas, new analysis has found. 

Labour’s Shadow Chancellor Anneliese Dodds warns Tier 3 communities will be “stretched to breaking point” after the Government refused to renew a fund which was paid to local areas either when they entered Tier 3 restrictions or the later national lockdown. 

Figures show the weekly value of the crucial Additional Restrictions Grant (ARG) is set to fall by millions between the end of national lockdown and Christmas. 

In Birmingham, the analysis shows the weekly value of support will fall by £2.4 million, while in Leeds it will drop by £1.7m.

In County Durham it is expected to drop by £1.3m and in Manchester by £678,000.

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

The Government has extended the Contain Outbreak Management Fund, which gives councils extra cash to pay for contact tracing and other public health costs, but not the ARG, which supports businesses hit by the restrictions.

Ms Dodds said: “It is completely irresponsible for the government to leave Tier 3 areas in the lurch like this again.

“The run-up to Christmas is a critical period, and local authorities are going to be stretched to breaking point trying to help.

“The government’s approach is fundamentally unfair and risks a gulf in support opening up across the country. 

“The Chancellor must make the responsible choice and come forward with a clear system of business support for the hardest-hit areas.”

Coronavirus lockdown rules explained

Nearly all of England will be plunged into the top two tiers of restrictions on Wednesday, with 55 million people facing bans on seeing friends and family indoors.

Only Cornwall, the Scilly Isles and the Isle of Wight will be classified as Tier 1 - the lowest level - which accounts for around 1% of the population.

The move has sparked a ferocious backlash from Tory MPs, many of whom objected to the broad brush decisions to plunge whole areas into tough restrictions.

The Treasury has been contacted for comment.