Full Breakdown
UK Prime Minister Andy Burnham Announces Crackdown on Non-Compete Clauses
By Drooid · · How we work
Core Announcement
At the Innovation Nation Summit in Manchester, Prime Minister Andy Burnham declared that the government will introduce legislation to prevent non-compete clauses from obstructing hiring for promising start-ups and scaling firms. He framed the practice as a “drag on innovation” and said the new rules will ensure that such clauses are no longer a barrier to talent mobility.
Background & Context
The Labour government under Sir Keir Starmer began reviewing post-termination restrictions in late 2023, considering options ranging from a total ban to salary-based thresholds or time limits. A policy paper released by the Department for Business, Innovation, Science and Trade last year outlined these options, and a public consultation on the paper closed in February 2026. Earlier this month, a group of tech entrepreneurs sent an open letter urging the government to scrap “unfair” restrictions, including non-compete clauses, long notice periods, and garden leave.
Data & Statistics
- Research cited by the government estimates that around 5 million jobs in Britain are covered by non-compete clauses, typically lasting about six months.
- The law firm Nockolds reported a 43 % rise in High Court claims to enforce non-competes during the first nine months of 2025.
- A study by pro-business group Enterprise Britain found that 87 % of scale-up founders view non-compete clauses as a hiring barrier, and three-quarters believe removing them could create at least 10 % more jobs.
- Former DeepMind staff have publicly complained about restrictive clauses, highlighting notice periods of up to 18 months in some tech and finance contracts.
Official Statements & Responses
Sir Keir Starmer’s previous administration had argued that non-compete clauses are unenforceable unless deemed “reasonable” by a court, and expressed concern about their behavioural impact on employment contracts.
Jonathan Reynolds, the Business Secretary, is expected to join Burnham in the Manchester speech, underscoring the government’s focus on labour-market flexibility.
Criticism & Opposition
Shazia Ejaz, director of campaigns for the Recruitment and Employment Confederation (REC), warned that while reforms should improve labour-market flexibility, they must preserve legitimate protections for employers’ confidential information and customer relationships. She cautioned that sweeping changes could create uncertainty and deter investment in talent development.
The Confederation of British Industry (CBI) has also suggested that there is little evidence linking restrictive clauses to reduced innovation, implying that a blanket ban may be unnecessary.
Conflicting Reports & Gaps
Media outlets differ on the likely shape of the forthcoming legislation. Some reports suggest the government may pursue an outright ban on non-compete clauses, while others, citing Burnham’s own remarks, indicate the possibility of a capped duration—potentially a three-month limit with compensation. No definitive details on the final form or implementation timeline have been released, leaving the exact scope of reform uncertain.
What’s Next
The government has signalled that legislation will be introduced in the upcoming Budget, but a detailed timetable for parliamentary debate and enactment has not been published. Stakeholders, including start-ups and established firms, are awaiting further guidance on how the new rules will be applied and what alternative protections employers may need to adopt.