Chancellor Rishi Sunak has hailed the furlough scheme a success and said millions of jobs could have been lost during the coronavirus pandemic without it.
It comes after latest figures showed more than half of the workers on the furlough scheme had returned to full time work.
The data revealed that the number of people furloughed fell by half by mid-August – and will likely have fallen further since.
Mr Sunak said: “As today’s official employment figures today show, the furlough scheme has done what it was designed to do – save jobs and help people back to work, where they want to be.
“We were clear at the start of the pandemic that we couldn’t save every job, but the furlough scheme has supported millions of workers and we want to help employers keep people on.
“Our Job Retention Bonus will do exactly that, supporting businesses to do the right thing.”
At the scheme’s peak in May, 30 per cent of the workforce across the UK was furloughed. The share of the workforce now on furlough is around 11 per cent.
The scheme will have been open for eight months when it closes at the end of October.
But Mr Sunak has come under heavy criticism for not extending the coronavirus scheme further.
Job losses and redundancies have mounted in recent months and there are fears among economists that the worst is yet to come.
The Office for National Statistics also revealed today that the number of workers on payrolls has plunged by almost 700,000 between March and August .
Redundancies in the three months to July rose at the fastest pace since 2009, climbing 48,000 on the quarter, with younger and older workers bearing the brunt of the pain .
Businesses in industries such as retail, aerospace, tourism, aviation and media have been among those to lay off a huge proportion of their workforce.
Labour leader Sir Keir Starmer has called on the government to replace the furlough scheme and outlaw “firing and re-hiring” methods to avoid the “scarring effect” of “mass unemployment”.
Starmer made an “open offer” to work on a plan with the PM including targeted support for badly-hit sectors.
Sir Keir also wants an expansion of part-time working, rewarding employers who give people hours rather than cut jobs, and the provision of training and support for those unable to return to work full-time.