Business leaders have welcomed the four month furlough extension but warn that details are needed to stop job losses.

Rishi Sunak announced today that he would be extending the government's job retention scheme until the end of October, with part-time working also included from August.

For the next two months the government will continue to subsidise 80% of wages for those staff who have been placed on furlough, however from August employers will be expected to contribute towards the 80%.

It is unclear now how much companies will be asked to put towards salaries but the Treasury has vowed to publish the full details by the end of this month.

The Federation of Small Businesses (FSB) Scotland said the allowances for flexible working will be of most help to small businesses, and could allow them to re-open more smoothly.

The body's policy chairman Andrew McRae said: “Today’s shrewd decisions from the Chancellor will give thousands of large and small Scottish employers the right sort of flexibility. The move to allow operators to partially furlough their staff while they consider how to get back up to speed should mean more businesses have the right tools at their disposal.

“In the coming weeks, smaller firms will want to understand the next steps for the scheme. Policymakers will need to carefully consider how to co-ordinate financial support for businesses with advice to firms about how and when to reopen safely.”

The Scottish Chambers of Commerce has also welcomed the four month extension, with their chief executive saying that any contributions expected to be made by employers should be based on how quickly they are able to recover from the economic downturn.

SCC boss Dr Liz Cameron, said firms would be "extremely relieved" by the extension, adding: "This direct employee financial support has been a lifeline which has enabled many jobs to be retained rather than businesses having to face making massive redundancies. As we begin to consider a ‘return to workplace’ plan to restart the economy, flexibility in these schemes will be paramount to protecting jobs until businesses are able to trade normally once more.

“We look forward to seeing further detail on the proposed employers’ contribution. We would ask that this takes into consideration, particularly for SMEs, their ability to pay contributions depending on how quickly their income recovers as lock down eases. Trading conditions will differ depending on location and sector and the flexibility of the furlough scheme must take these factors on board."

The tourism industry, however, may not be helped by the measures according to the Scottish Tourism Alliance (STA).

According to the industry body many firms will have missed their prime trading period over the summer, and won't get a chance to reopen their companies again until Spring, therefore missing out on a chunk of their annual income.

Marc Crothall, Chief Executive of the STA said: “The Chancellor’s announcement of the extension of the current Job Retention Scheme until the end of October will offer comfort to many within the tourism industry and is very much welcomed.

"As always, the devil will be in the detail. Given the dependence of Scotland's tourism industry in terms of seasonality; assurance will not be felt by all. There are a great many businesses that will not survive beyond October as it will simply not be viable for them to start trading again until the Spring.

"Sadly, the extension to furlough alone will not be sufficient to stop many businesses from making redundancies, however, we look forward to learning more detail over the coming weeks."

Meanwhile Labour's shadow chancellor Anneliese Dodds said that Mr Sunak was "right" not to remove the "lifeline" scheme, but has warned about the risk of redundancies should employers not be prepared for contributing to the furloughed wages.

She said: "It is welcome that the Chancellor has heeded the call by Labour, trade unions, and businesses for more flexibility in the scheme, to support employees to go back to work part-time.

“The government must clarify today when employers will be required to start making contributions, and how much they’ll be asked to pay. If every business is suddenly required to make a substantial contribution from the 1st August onwards, there is a very real risk that we will see mass redundancies.”

Scottish Conservatives leader Jackson Carlaw said Scottish employers have been given an "enormous safety net" from the Chancellor.

He said: "Introducing part-time flexibility into the scheme in July is something that businesses have been asking for and is very welcome.

“The simplicity and clarity of the Chancellor’s message today is striking.

“This crisis is not over, there is still a long road ahead, but Scottish employees and employers have been given an enormous safety net."

The SNP's shadow chancellor Alison Thewliss asked Mr Sunak in the House of Commons whether he would guarantee that the scheme would still apply in Scotland, Wales and Northern Ireland if their lockdown measures were different to those in England.

The Glasgow Central MP said: "The Scottish Government have been clear that the 'stay at home' advice has not changed. So will he commit today to ensuring that the job retention scheme will remain in a place in Scotland, Wales and Northern Ireland if our lockdowns continue longer than England?"

Mr Sunak responded: "This is now an extension for four months to the end of October, which will provide eight months of support in total of all regions and all sectors of the United Kingdom, and provides, I think, a very good and generous runway for businesses in terms of planning, and indeed to start getting back to work when the time is right as per the Prime Minister's plan that was outlined on Sunday and Monday."