BUSINESSES and trade unions have broadly welcomed Chancellor Rishi Sunak's move to extend the UK Government's furlough scheme for another month to the end of June.

Mr Sunak intervened, saying that on the back of the three-week extension to the lockdown, it was right to “provide clarity” to businesses and stressed he would keep the Job Retention Scheme under review.

Experts warned that without an extension, then next week millions of workers could have been threatened with redundancy as struggling companies considered their futures beyond the help offered by the Government scheme.

Unions said there would now be "no reason" for redundancies but also called on UK ministers to ensure workers were protected longer-term during a recovery.

Under employment law, businesses that want to make 100 or more people redundant need to consult on the layoff at least 45 days in advance; those trying to lay off between 20 and 100 people need to give 30 days' notice.

The Government scheme allows firms to furlough employees with the Treasury paying cash grants of 80 per cent of their wages up to a maximum of £2,500 a month. It was originally open for three months and backdated from the March 1 to May 31.

Dame Carolyn Fairbairn, Director General of the CBI, said the Government deserved credit for the decision, which she said would "help protect the economy and prevent unnecessary job losses through this new lockdown phase".

She added: "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."

Len McCluskey, General Secretary of Unite, said he was hugely relieved to hear the decision and thanked the Government.

"Yes, there have been gaps and teething troubles but the fact that employers were told that the state would stand behind their employment costs if they stand behind their workers has helped stave off mass unemployment.

"With this clear statement from the Chancellor that the furlough scheme will not be withdrawn in the coming weeks, our appeal now is to employers to do the right thing by your workers. Turn to this scheme, keep people safe and keep workers in their jobs until they can return to work," he added.

But Susan Harris, legal director at the GMB union, said while the news was welcome for workers, the Government must ensure they were supported longer term during any recovery.

"We can't have a situation where workers face an economic cliff edge as the economy readjusts after the worst of Covid-19.

"The Government needs to set out its plan for what coming out of lockdown looks like for workers; in every job, in every workplace," she added.