REGIONAL inequalities will widen and the poorest parts of England will be “levelled down” as a result of one of Chancellor Rishi Sunak’s coronavirus business grants schemes, Labour warned last night.

Some of Britain’s hardest-pressed areas will receive the same financial support as the richest, despite many facing the prospect of remaining under strict Covid-19 rules for longer.

Shadow business minister Lucy Powell accused Mr Sunak and Prime Minister Boris Johnson of “betraying” voters in such areas.

When England went into lockdown in November, additional restrictions grant (ARG) funding – a one-off payment equating to £20 for every person living in a given local authority area – was provided to every council.

The payment applies when an eligible local authority is under Tier 3 or national lockdown restrictions in order to support affected businesses.

From tomorrow, the England-wide lockdown is expected to be replaced with a second round of tiered restrictions, of which Tier 3 will be highest with bars, pubs and restaurants remaining closed.

Labour’s analysis shows that, despite being ranked as the most deprived area, Blackpool in Tier 3 will receive less than affluent South Oxfordshire in Tier 2, which is in 450th place for deprivation.

Manchester in Tier 3, despite being the third most deprived area, will receive the same amount as Tier 1 Cornwall, which is ranked 142nd for deprivation. Blackburn (25th) in Tier 3 will receive the same as Tier 2 East Hertfordshire council (457th).

In Nottinghamshire, the Ashfield (111th) and Bassetlaw (182nd) areas in Tier 3 will receive less than Elmbridge in Surrey (460^th).

Labour based its warning on analysis of ARG funding and data on deprivation revised by the House of Commons library.

Ms 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.

“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 for longer.” 

A BEIS 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.”