Last reviewed 12 May 2020

In a statement to the House of Commons that will have come as a huge relief to thousands of businesses across the country, Chancellor Rishi Sunak has confirmed that he will extend the coronavirus furlough scheme to the end of October.

While employees will continue to receive 80% of their monthly wages up to £2500, however, he warned that measures will be put in place from the end of July to ensure that the cost of the job retention scheme is shared more with employers.

The scheme will continue for all sectors and UK regions but with employers able to bring furloughed employees back part-time while sharing the cost.

Although the scheme is now costing taxpayers nearly as much as the NHS, Mr Sunak said: “Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.”

With 7.5 million workers now covered by the scheme, up from 6.3 million in the previous week, business groups had been waiting anxiously for the Chancellor’s statement.

The date is rapidly approaching when they would have had to begin consultations on making workers redundant – assuming the support had been withdrawn.

British Chambers of Commerce (BCC) Director General Adam Marshall applauded the move, pointing out that more than 70% of firms surveyed were furloughing a portion of their staff.

“The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme,” he said.

Dame Carolyn Fairbairn, the CBI Director-General, was equally warm in her praise of Mr Sunak, suggesting that he is “deftly confronting a challenging balancing act”.

Firms will want more detail on how they will contribute to the scheme in the future, she continued, but would welcome the much-needed flexibility that the Chancellor was introducing.

“Extending the furlough to avoid a June cliff-edge continues the significant efforts made already and will protect millions of jobs,” Dame Carolyn said.