LABOUR accused the government last night of a “smash-and-grab raid” on struggling businesses over its rule that councils must hand back £1.3 billion of unspent emergency coronavirus grants.

At the start of the nationwide lockdown in March, funding was made available to local authorities to support small hospitality, leisure and retail businesses .

Of the £12.3bn allocated, £11bn has been distributed – but the fund operated on the basis that money not used by August 30 would need to be returned.