Tory MPs have rejected a call for more support to communities plunged into economic chaos by ending up in Tier 3 lockdowns.
It came in the wake of a Government decision to punish the Greater Manchester authority for failing to accept a deal from ministers that it would leave the most vulnerable exposed to coronavirus.
Labour's motion called for greater support for the areas affected included commitments to match support for people out of work with a package worth 80% of their wages.
MPs voted against it by 261 to 340, majority 79.
At PMQs, Boris Johnson told MPs he would now bypass Greater Manchester’s mayor Andy Burnham and offer £60 million to local councils.
Keir Starmer called for a clear framework setting out the support on offer to regions in Tier 2 and Tier 3 of the coronavirus measures rather than “grubby, take-it-or-leave it” deals.
Earlier in the day, it was confirmed that South Yorkshire would join Liverpool, Lancashire and Greater Manchester in the top level of restrictions.
Sheffield Heeley MP and shadow cabinet minister Louise Haigh claimed “Tory ministers are treating the North with contempt”.
Sheffield City Region’s Labour mayor Dan Jarvis said: “The number of people with Covid in our hospitals has doubled over the last 10 days, with no signs this will relent over the coming weeks.
“Inaction was not an option.”
The financial package agreed by Sheffield City Region with the Government includes £30 million to support the region’s businesses and £11 million for councils for measures such as test and trace.
7.3 million people, or 13% of England’s population, will now be living under Tier 3 restrictions which include a ban on households mixing and the closure of pubs and bars which do not serve meals.
During the debate on more support for those areas, Labour's deputy leader Angela Rayner called the Government’s financial support package for Greater Manchester “an insult”.
She also told the Commons her aunt died last week frpm Covid-19 at Stepping Hill Hospital in Stockport.
During a Commons debate on financial support for areas under tighter Covid-19 restrictions, she said: “So I speak today not just as a member of this House, nor as a Mancunian, but as someone who, like many others across our city and our country, who in the last few weeks has lost loved ones to this terrible virus.
“We were offered £8 per head or, to put it another way, 30 seconds work for a consultant working on the collapsed Test and Trace system.
“Let me say this: £8 per person is an insult and now they are attempting to play us off against each other across GM.
“Well let me tell the Prime Minister, our mayor stood up for Greater Manchester but he spoke for Great Britain.”
Ms Rayner said the debate was not just about Greater Manchester because “this is coming to a town near you”.
She told the Commons: “I absolutely hope the Prime Minister does the right thing because this is not just about Greater Manchester.
“This is coming to a town near you. In so many areas now the R number is increasing. So many areas are in Tier 2. So many areas are going to go into Tier 3.
“So this is a marker to ensure that our economy survives through these problems."
Chief Secretary to the Treasury Steve Barclay said there was a difference in approach between Andy Burnham and other local leaders.
He told MPs: “The mayor of Manchester in his discussions with Government expressly said Manchester should be treated differently to the other areas.
“Well I think that is a disservice to other local leaders who have also spoken for their areas, that have worked constructively with Government. I don’t think it is the case that the mayor of Manchester, unlike the mayor of Liverpool, speaks for Great Britain in the way that (she) suggested.
“Indeed it is also a point of record that the mayor of Manchester’s position is both not deliverable operationally, because local authorities do not have access to welfare payments for the dynamic aspect of joint job support… but also it was at odds with the tiering approach that we set out.
“So there is a difference, I am sorry to say, between the approach taken by the mayor of Manchester and the constructive approach taken by other local leaders.
“It is important not just to talk about local authority support in terms of £8 per head, that is just one component of a much wider package of support that the PM has announced.”
The debate was briefly sidetracked as MS Rayner was accused of calling a Tory MP “scum” during the debate
Conservative MP Chris Clarkson said the insult was hurled at him after he insinuated that members of the shadow front bench believe the pandemic is a “good crisis” to exploit.
Ms Rayner denied she had made the comment.