The government scheme which is supporting 7.5 million workers during the coronavirus pandemic will be extended until the end of October, the chancellor has announced.

Rishi Sunak said the furlough scheme, which pays 80% of an employee’s salary up to £2,500 a month, will remain unchanged until the end of July as the COVID-19 lockdown continues.

From that point it will continue, but employers will be expected to begin footing some of the multi-billion pound bill.

Staff will still receive the current level of support, through a combination of state and employer contributions.

Addressing MPs in the Commons, the chancellor said that from August there would be greater flexibility to allow furloughed staff to start going back to work.

“Employers currently using the scheme will be able to bring furloughed employees back part-time,” Mr Sunak said.

“And we will ask employers to start sharing with the government the cost of paying people’s salaries.”

The chancellor said further details would be set out at the end of the month.

“I’m extending the scheme because I won’t give up on the people who rely on it,” Mr Sunak told MPs.

“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.”

The announcement came in response to an urgent question from Labour’s shadow chancellor, Anneliese Dodds.

She said she had only heard about the chancellor’s changes “in the last few seconds” and will look at them “very, very carefully”.

The shadow chancellor also raised comments attributed to government officials in media reports suggesting that people had to be “weaned off an addiction” to the scheme.

Ms Dodds said people do not want to be furloughed, adding: “It’s critically important they are not penalised for that choice.

“We welcome the flexibility mentioned, we’ve asked for this repeatedly.”

The chancellor said in response that he had never used the phrase in connection with the furlough scheme and it was “not one I agree with”.

“Nobody who is on the furlough scheme wants to be on this scheme,” Mr Sunak continued.

“People up and down this country believe in the dignity of their work, going to work, providing for their families, it’s not their fault their business has been asked to close or asked to stay at home.

“That is why I established this scheme to support these people and their livelihoods at this critical time.”

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