What The Prime Minister Committed To
Prime minister Andy Burnham told the Innovation Nation Summit in Manchester on 9 October: "I can confirm that we will legislate to make sure that non-compete clauses will no longer be a barrier to hiring" at the most promising startups and scaling firms.
Tech.eu reports that the plan to ease restrictive non-competes could include banning them, and it corrected an earlier version that said the government was banning them outright. It also cites a video of the speech, reported by Politics UK, in which Burnham says non-competes "stunt innovation" and calls the change the "Bosman ruling for the innovation sector".
What Is Settled And What Is Not
Most of the detail that decides how a UK employer is affected is still undecided after the speech.
| Question | Status after the speech |
|---|---|
| Will non-competes be limited for startups and scaling firms? | Promised: the government says it will legislate |
| Does the rule reach beyond startups and scaling firms? | Not specified, and Tech.eu says the scope is expected to be laid out over time |
| Will non-competes be banned outright? | Possible but not confirmed |
| Are notice periods of up to 18 months covered? | Not in the reported quote, though campaigners wanted them limited |
| When will a bill appear? | Neither report gives a date |
City A.M. previewed the speech as a crackdown on both non-competes and notice periods of up to 18 months, citing terms that can leave staff on gardening leave for months. Tech.eu's account of the speech reports a commitment on non-competes only.
The Evidence Each Side Uses
Supporters point to a study by the lobby group Enterprise Britain finding that 87 percent of scale-up bosses list non-compete clauses as a barrier to their hiring plans, and that three quarters say they could create at least 10 percent more jobs if barriers to expansion were removed.
Dozens of fast-growing startups, including Synthesia, Fuse Energy and ElevenLabs, wrote to Burnham and business secretary Jonathan Reynolds calling the terms unfair and labour immobility a classic collective action problem. They said the terms lower wages, reduce competition and undermine the innovation that drives economic growth. The CBI has argued there is little evidence that these conditions weigh on innovation, and City A.M. expects pushback from established businesses.
What A UK Employer Does Before A Bill Appears
A promise to legislate does not change a signed contract, and the reports describe no law that has passed.
Map every contract that carries a non-compete or a notice period longer than three months, with the end date and the role it protects. Do the same for the people you hire from competitors as well as the people you employ.
Before you sign a new long restriction, take legal advice on whether you need it, since the rule may change inside its term. If you are the hire, ask what restrictions apply before you resign. This is not legal advice.
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