LABOUR is calling for more support for workers and businesses in areas with local restrictions in a bid to safeguard thousands of jobs.

The party warned last night that high streets could turn to “ghost towns” in areas with new local lockdowns because of Covid-19.

Labour said there was a £170 million underspend in the government’s Covid-19 grants programme for businesses in areas with local restrictions, arguing that ministers are clawing this sum back rather than using it to safeguard jobs and livelihoods.

The party has estimated that this funding could support an extra 15,000 businesses in areas with local restrictions.

Shadow minister for business and consumers Lucy Powell said: “It’s a week since local restrictions were put in place in Greater Manchester and West Yorkshire, yet there has been zero extra support for struggling businesses caught up in this public health crisis.

“We’re seeing a wave of redundancies across the high street threatening jobs and livelihoods, which could lead to ghost towns as businesses are forced to shut up shop.

“Unless ministers take action to provide extra help to firms, that wave will turn into a tsunami, leading to lasting damage and the loss of many thousands of jobs, weakening our economy and our ability to recover from the crisis.”

Labour called for a hospitality and high-streets fightback fund to protect jobs and help struggling firms, adding that if local areas were able to use the underspend in the coronavirus business-grants schemes, it would unlock significant funds for local areas to target help.

Funds should be better focused on struggling businesses and their supply chains, including bed and breakfasts, hotels and cafes in coastal communities, conference centres and music venues, Labour said.