UK Prime Minister Andy Burnham has committed to restricting non-compete clauses in employment contracts, saying their current use "has gone too far" and constrains innovation and worker mobility.
Speaking at a business summit in Manchester, Burnham said the clauses prevent workers from joining rival firms or starting their own businesses after leaving a role, and force some staff to work without pay during restriction periods. He framed the move as essential to helping growing firms hire talent and to keep innovative UK companies from relocating abroad.
Government research cited by Burnham estimates around 5 million British jobs fall under non-compete clauses, which typically last about six months. The restrictions are most common in financial services and technology sectors. The Burnham government has been exploring reform options since late last year, ranging from a total ban to salary thresholds or time limits.
Burnham did not detail the scope of forthcoming legislation but indicated it would cover both the "everyday economy" and support early-stage and scaling firms. He referenced the 1995 Bosman ruling, which transformed European football transfers, as a model for how limiting non-competes could reshape the innovation sector. The government plans to announce specific restrictions alongside the Budget on 28 October.
The Recruitment and Employment Confederation pushed back, warning that sweeping changes could harm business by removing protections for commercially sensitive information and client relationships. The previous Conservative administration had ruled out a total ban, citing employer concerns that such action could dent investor confidence or force companies to restrict internal information sharing.
Burnham used the announcement to broaden his pitch on economic growth, saying too many UK companies scale overseas and take jobs and investment with them. He signalled the government would announce further tax measures in the Budget to retain high-growth firms and indicated plans for regional investment funds modelled on Greater Manchester's Good Growth Fund, which operated during his tenure as mayor of the city-region.