The furlough scheme will be extended until March next year, the chancellor said.
Rishi Sunak announced the move following days of wrangling over the future of the scheme, which pays 80% of wages up to £2500 per month while staff can’t work due to coronavirus lockdown.
It had been extended until December 2, while England is in lockdown, but the Scottish Government and other devolved nations argued it should be available to them whenever it was needed.
First Minister Nicola Sturgeon previously warned that Scotland might be pushed into full lockdown if furlough cash was only available for the next month.
She welcomed the extension while answering questions from MSPs at Holyrood, but stressed she hadn’t seen the full detail.
Sunak said the UK Government’s highest priority was “to protect jobs and livelihoods”.
Making an economic statement in the Commons, the Chancellor told MPs: “The Bank of England’s forecasts this morning show economic activity is supported by our substantial fiscal and monetary policy action.
“And the IMF just last week described the UK’s economic plan as aggressive, unprecedented, successful in holding down unemployment and business failures, and one of the best examples of co-ordinated action globally.
“Our highest priority remains the same: to protect jobs and livelihoods.”
The chancellor was criticised in the Commons for the timing of the announcement, with MPs claiming many workers have been made redundant because employers believed furlough was ending.
However, the scheme allows bosses to re-hire anyone laid-off since September 23 and claim their wages.
Sunak also outlined support for the self-employed, with the government paying 80% of average profits between November and January up to 80%.