The Chancellor said the multi-billion pound subsidy, which had been due to end next month, will stay in place for four more months, and it will still cover 80 per cent of wages up to a ceiling of £2,500 a month.
The scheme which paying £14billion a month – roughly equivalent to the NHS budget – Mr Sunak also told the Commons that from August workers on it will be able to go back part-time.
Firms will have to cover a proportion of wages if they take advantage of the ‘flexibility’, he said.
‘Nobody who is on the furlough scheme wants to be on this scheme. 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,’ Mr Sunak said.
The announcement came despite mounting speculation that the proportion of pay would be cut to 60 per cent from July, as ministers urge people to return to work and loosen the lockdown strangling the economy.
Mr Sunak told MPs that the job retention scheme had protected 7.5million workers and almost a million businesses.
‘Until the end of July there will be no changes whatsoever,’ he said.
‘Then from August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.
‘Employers currently using the scheme will be able to bring furloughed employees back part-time.
‘And we we will ask employers to start sharing with the Government the cost of paying people’s salaries.
‘Full details will follow by the end of May.’
The Treasury has been looking at ways to cut back the scheme that is paying up to 80 per cent of wages, up to a maximum of £2,500 per month.
But Mr Sunak previously vowed there will be no ‘cliff edge’ to the support, but admitted the scale of the bailouts are not ‘sustainable’.