Tier 3 communities in the North and Midlands will be ‘stretched to breaking point’ once the grant aimed at supporting local business is cut at the end of the national lockdown, according to Labour.

According to an analysis by Labour, the weekly value of the Additional Restrictions Grant (ARG) is set to fall by millions between the end of national lockdown and Christmas.

The ARG provides councils with funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which are impacted by the pandemic.

Labour’s analysis found that local authorities in Tier 3, which are predominantly in the North and Midlands, are going to be hit hard.

In Birmingham, for example, the weekly value of support will fall by £2.4m. In Leeds and County Durham it will fall by £1.7m and £1.3m respectively. In Manchester it will decrease by £678,000.

‘It is completely irresponsible for the government to leave Tier 3 areas in the lurch like this again,’ said the shadow chancellor Anneliese Dodds.

‘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.’

The Treasury has been approached for a comment.