UNIONS and the Labour Party  have warned that the government’s extension of its coronavirus furlough scheme should not come at the price of bosses cutting jobs.

Chancellor Rishi Sunak announced today that the scheme will continue until October, with the government continuing to fund furloughed employees’ salaries until the end of July.

The furlough scheme, which pays 80 per cent of a workers’ salary up to a £2,500 monthly cap, currently supports 7.5 million jobs and has cost £10 billion so far.

Mr Sunak told MPs that there would then be a gradual phasing-out from August as employees are able to return to work part-time and still receive 80 per cent of their salary.

Unite the union welcomed the move, but general secretary Len McCluskey warned that there “should be no rush to redundancies.”

Labour’s shadow chancellor Anneliese Dodds urged the government to clarify when bosses will be required to start making contributions and how much they’ll be asked to pay.

She said: “If every business is suddenly required to make a substantial contribution from the August 1 onwards, there is a very real risk that we will see mass redundancies.”

There are fears over the impact of having to make contributions from August on some severely affected sectors, such as hospitality.

UK Hospitality chief executive Kate Nicholls warned that the government may need to extend the full 80 per cent for some firms in the sector past July.

TUC general secretary Frances O’Grady said: “We are pleased ministers have listened to unions and extended the job-retention scheme to the autumn. This will be a big relief for millions. 

“As the economic consequences of Covid-19 become clear, unions will keep pushing for a job-guarantee scheme to make sure everyone has a decent job.”   

Unison general secretary Dave Prentis said that the furlough extension offers some certainty for workers and is “the right thing” for the Tory chancellor to have done, and “shows the chancellor has been listening to unions.”

He said: “Supporting a part-time return to work from August is a sensible move which gives employers time to ensure workplaces are safe.”

Mr Sunak’s furlough scheme announcement came as new analysis of Office for National Statistics data puts the coronavirus death toll at just over 40,000, following new figures on care-home deaths.

The data shows that care-home deaths accounted for 40 per cent of coronavirus-linked deaths in England and Wales in the week ending May 1.