The scheme to support workers who remain in employment but have stopped working due to the lockdown, has been extended.
Over nine million employees are anticipated to be put on the scheme in which the state will cover the cost of putting workers on paid leave.
Rishi Sunak, the Chancellor of the Exchequer, announced on Friday that the subsidy scheme for wages will be extended by a further month until the end of June.
Many business groups had previously warned that a failure to extend the scheme would result in the loss of more jobs.
Sunak also added that the scheme would be extended yet again ‘if necessary’.
"With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity," Sunak said.
"It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery”.
The government will now cover 80% of an employee's wages for the months of March, April, May and June if their employer puts them on leave.
As part of the Coronavirus Job Retention Scheme, workers will be paid by their employers, who will then have to reclaim the money from HMRC at the end of the month.
British Chambers of Commerce (BCC) figures show that almost 50% of companies will take advantage of the scheme.
The extension of the salary subsidy was welcomed by the Confederation for British Industry (CBI) who had previously warned that many jobs would be lost without the extension.
"This extension means that firms will no longer be forced to issue redundancy notices over the next few to days to comply with 45-day consultation requirements, and can instead return to focusing on protecting jobs and their businesses," said Dame Carolyn Fairbairn, CBI Director-General.
"It's absolutely clear that these vital support systems must stay in place until it's safe for people to return to work and we can begin to restart and revive our economy”.
Karen Dee, chief executive of the Airport Operators Association, said: "Airports are making significant use of the job retention scheme, which has helped to address some of the challenges they are currently facing, so it is good news that the Chancellor has decided to extend it".
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