Chancellor Rishi Sunak has announced that the Government will pay firms £1,000 bonus for every staff member they keep on for three months after the furlough scheme ends in October.

But the chancellor warned that “hardship lies ahead”, while vowing no-one will be left “without hope”, in an address to MPs.

Mr Sunak rejected calls to extend the furlough scheme beyond October, saying it would give people “false hope” that they will have a job to return to.

He admitted that job losses will remain a reality for many, but contested that he would “never accept unemployment as an inevitable outcome of the pandemic”.

Details of how the initiatives will be paid for – expected to be through borrowing and possible tax rises – will likely be unveiled in the Autumn Budget.

The Chancellor said: “Over the medium-term, we must, and we will, put our public finances back on a sustainable footing.”

He went on to explain: “If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee.

“It’s vital people aren’t just returning for the sake of it – they need to be doing decent work.

“So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in National Insurance.”

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