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Labour has claimed that the Government is “clawing back” more than £1 billion of funding that had been allocated to support businesses through the coronavirus pandemic.

Local authorities are being told to hand back £1.3 billion of unspent emergency grants to the Government, the Opposition said.

This apparently includes £340 million from areas subject to local restrictions. Labour claims Labour claims

Labour added that it amounted to a “smash-and-grab raid” on struggling businesses, especially as restrictions are being reimposed in some parts of the country.

Shadow ministers repeated their call for remaining grants to be used for a Hospitality and High Street Fightback Fund, to help save jobs and businesses.

Councils are having to return any money they have not used from a fund aimed at supporting small businesses and those in the hospitality, leisure and retail industries, said Labour.

Businesses are in a fight for survival and should still be able to access the funds, it was argued.

Shadow minister for business and consumers Lucy Powell said: “Businesses are in a fight for survival.

“The Business Secretary must stand up to the Treasury and demand they reverse this smash-and-grab raid on business support or risk the decimation of our high streets.

“It makes zero sense to remove economic support while public health restrictions are tightening.

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“Rather than clawing remaining funds back, the Government should redeploy these funds and allow local areas to use them flexibly to support those businesses and town centres hardest hit, before we see waves of redundancies, shuttered high streets and viable businesses going bust.”Richard Watts, who chairs the Resources Board at the Local Government Association, which represents councils across England, said: “Councils gave out billions in cash grants to businesses