A HUGE north-south divide in Tory government funding for new businesses was exposed by Labour today.

In England, the Tories have allocated five times more start-up cash to London and the south-east than they have to Yorkshire, the north-west, north-east, and the Midlands, Labour’s analysis revealed.

New businesses in the south-east and London received more than £700 million in funding, while firms in the north and Midlands received just £140m.

Labour looked at funding allocations from the government’s so-called Future Fund between its launch last April and December 17, when the most recent data was released.

Awards for businesses in the north-east, north-west, west Midlands and Yorkshire were in some cases hundreds of thousands of pounds less than to businesses in London and the south-east.

In Scotland, the average award was just a third of the national average and in Wales it was half the national average. 

Labour’s shadow business secretary Ed Miliband said: “While the government talks about backing the north and Midlands, the reality is starkly different.

“By investing much more heavily in start-ups in the south of England and squeezing out other parts of the country, they will be simply reinforcing economic imbalances in our country.”

TUC North West secretary Lynn Collins said: “This is yet another example of a government policy that widens the divide between the north and south rather than closes it. 

“The direct impact on workers in the north of fewer businesses being supported is few jobs and more insecure work.

“If the government was serious about ‘levelling up,’ they would make sure that funding criteria tackles regional disparities and doesn’t reinforce them, and that businesses in the north are given a fair chance to succeed.”

Beth Farhat, secretary of Newcastle-based Northern TUC, said: “This is a really tough outcome for the northern economy. The government must urgently investigate how it happened and look for ways to redress it.

“Levelling up must include better targeted support for innovation and start-ups in northern towns and cities. With a fair share of national support, we can create innovation hubs where our universities, businesses and unions work in partnership to create new industries and good jobs.”

Bill Adams, secretary of Yorkshire and the Humber TUC, said: “It’s bad news again for the Yorkshire and the Humber economy and the North in general.

“The disparity in allocating funding from the Future Fund for business start-ups compared to the South East goes against the governments levelling up promises to voters in the North at the last election.

“Economic and social inequalities will only get worse rather than better unless the government commits to a fairer level of funding right across the country.

“People put their trust in this promise, they will not forgive more betrayal easily.”