Chancellor Rishi Sunak has confirmed that he will extend the furlough scheme across the UK until the end of March.
Mr Sunak said the scheme will pay up to 80% of a person’s wage up to £2,500 a month. He told the Commons that the government will review the policy in January.
The chancellor said his intention was “to give businesses security through the winter”.
“The security we are providing will protect millions of jobs,” he added.
He said the scheme would apply throughout the UK, saying the country had “a Treasury for the whole of the United Kingdom”.
As part of the revised scheme, anyone made redundant after 23 September can be rehired and put back on furlough.
Mr Sunak also announced billions of pounds of other support for the economy, including more money for self-employed people.
Support through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
At the same time, the chancellor raised guaranteed funding for the UK’s devolved administrations by £2bn to £16bn.
Shadow chancellor Anneliese Dodds accused him of ignoring objections to the government’s measures “until the last possible moment”.
She pointed out that he had previously “ridiculed” a furlough extension as “a blunt instrument”.
But Mr Sunak defended his rapid change of policy, saying: “It is not a weakness to be fast-moving in a crisis, but rather a strength.”