Rishi Sunak has confirmed that the furlough scheme will be extended until the end of September.

The Chancellor told MPs the Government will ‘continue doing whatever it takes to support the British people and businesses through this moment of crisis’ as he announced that millions of workers will continue to have 80% of their wages paid through to the autumn.

The Coronavirus Job Retention Scheme has protected more than 11 million jobs since its inception, but under plans to taper the Government’s contribution, employers will be expected to pay 10% towards the hours their staff do not work in July.

Their contribution will increase to 20% in August and September, as the economy reopens, but employees will continue to receive 80% of their salary for hours not worked until the scheme ends.

It is the fourth extension to the programme, which had been due to close at the end of April.

Ahead of today’s Budget, he said: ‘Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

‘There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.’

The Chancellor pledged to use the Government’s full ‘fiscal firepower’ to protect jobs and livelihoods, vowing to do ‘whatever it takes’ to help businesses and people.

He told MPs this afternoon: ‘It is going to take this country, and the whole world, a long time to recover from this extraordinary economic situation.

‘This Budget meets the moment with a three-part plan to protect jobs and livelihoods of the British people.

‘First, we will continue to do whatever it takes to support the British people and businesses through this moment of crisis.

‘Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.

‘And, third, in today’s Budget we begin the work of building our future economy.’

The extension to the furlough scheme was welcomed by business organisations, with the CBI’s chief economist Rain Newton-Smith saying it will keep ‘millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown’.

Economic think tank the Resolution Foundation’s chief executive Torsten Bell said the phased tapering off will avoid a ‘risky cliff-edge’, but warned that the ‘peak of unemployment is ahead rather than behind us’.

However Bridget Phillipson, shadow chief secretary to the Treasury, said the changes to support schemes ‘could have been made months ago’ – accusing Mr Sunak of focusing on ‘getting his moment in the sun rather than protecting jobs and livelihoods’.

And Len McCluskey, general secretary of Unite, said that while the extra months of furlough support offer ‘some stability in the rocky months ahead’, the scheme should be extended until 2022.

The Office for Budget Responsibility (OBR) will publish its latest forecasts alongside the Budget – with Boris Johnson expecting a recovery to be ‘much stronger than many of the pessimists have been saying over the last six months or so’.

In its November forecasts, the OBR indicated the national debt could reach 105% of gross domestic product – a measure of the size of the economy – in 2020/21, with a record peacetime borrowing of £394 billion.

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