Businesses have welcomed news the Government's furlough scheme will be extended until October.

Chancellor of the Exchequer Rishi Sunak announced the extension of the Job Retention Scheme yesterday.

Under the scheme the Government covers 80 per cent of the wages of staff who cannot work because of the coronavirus shutdown, up to £2500 a month.

There will be no changes to the scheme until the end of July, Mr Sunak said.

Dianne Irving, who runs a chain of four pubs and currently has around 50 staff on furlough said she was very pleased with the news.

Dianne is managing director of Drouth Limited, which runs the Howard Arms, in Carlisle city centre, as well as the Crown Inn at Stanwix and the White Mare hotel and restaurant in Beckermet.

As the coronavirus shutdown hit, she was also preparing to open the Milbourne Arms, in Carlisle’s Shaddongate.

"We were thinking that once we got to the middle or end of July then we would be really struggling," she said.

"But the extending of the furlough means our staff are safe and going to be looked after."

The chancellor said from August to October the scheme will continue 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.

The Government will also ask employers to start sharing the costs of paying people’s salaries with it, he said.

"The flexibility is interesting because that will allow us in principle to begin looking at takeaway services and opening as and when things start to move," said Dianne.

"It builds in that flexibility to bring people back.

"We would find it difficult to bring back our chefs on a full time basis because I don't think the custom would be there for takeaway on a seven day a week basis.

"It gives us time to be able to start thinking about it and also to gauge the lie of the land and how society is coping with it all."

Sara Young, director of CBA Events, based in Keswick, said it brought some security for the future.

However, she said the business still faced a lot of uncertainty as it organised conferences and events at hotels and other venues.

"While it is a relief and brings some continued security I need to look into a little bit further," she said.

"I understand there will be some shared responsibility with the employer, but unless we are able to be operational and have some money coming in it is still going to be a challenge.

"The part time option is quite attractive because that can ease people back to work although there may not be full time hours yet."

Dave Farrell, chair of the Cleator Moor Chamber of Trade, said the news would come as a relief for many businesses.

"I think it's good that it has been extended and I am pleasantly surprised," he said.

"I thought it would probably be until the end of June and we would see it finish but it's going to go beyond that for four months with something for part-time working as well.

"That's sensible as it gives a bit of breathing space and perhaps it's an incentive for employers to get people back."

Cumbria Chamber of Commerce said the extension would protect thousands of jobs in the county.

Chief executive Rob Johnston said: “This scheme has been hugely beneficial in Cumbria where we have a large number of hospitality and tourism businesses that have been forced to close entirely.

“They employ 65,000 people. Without the job retention scheme, many of them would have been made redundant.

“We lobbied hard through the British Chambers of Commerce for the scheme to be extended and we’re delighted that the chancellor has acted on what we said.

“He’s also agreed to our proposal to change the scheme rules to allow employers to partially furlough staff so businesses can employ individuals part-time with furlough payments covering the days they don’t work.

“That added flexibility will benefit many businesses here, including manufacturers and construction firms that are operating at a reduced level because of supply chain issues.”

Cumbria Chamber of Commerce’s coronavirus survey suggests that as many as 60 per cent of businesses in the county have furloughed at least some of their employees.

Rob added: “The chancellor plans to reduce the level of support offered beyond July and he’s going to consult chambers and other organisations on how to do that.

“He could reduce the percentage of salaries covered, lower the £2,500 monthly cap or a combination of the two.

“The point we will make forcibly to him is that, even when businesses reopen, social distancing rules mean that many will operate at a reduced level.

“They will need continued financial support from Government if we’re to avoid a catastrophic spike in business insolvencies and redundancies in the months ahead."

The chamber has put together a toolkit to help businesses through the crisis, which is available here: www.cumbriachamber.co.uk/news/27976-coronavirus-what-businesses-need-to-know and businesses can complete the Chamber’s Coronavirus survey at https://www.cumbriachamber.co.uk/news/28108-complete-our-coronavirus-survey

The chamber’s Cumbria Business Growth Hub is also helping businesses apply for payments under the job retention scheme and can be contacted at info@cumbriagrowthhub.co.uk