LONDON — The U.K. government is planning to commit to a full or partial ban on non-compete clauses in workers’ employment contracts, six people with knowledge of the discussions told POLITICO.
All six of the people, who were granted anonymity to discuss government policy, said they believed an announcement is due imminently and could be made as soon as Friday. Three of those people said they believed the announcement was likely to be fronted personally by Prime Minister Andy Burnham, who is expected to give a speech Friday.
The government of Burnham’s predecessor, Keir Starmer, set out options in November 2025 to limit the use of non-compete clauses, which aim to restrict a person’s ability to work for or set up a competing business after they leave their job.
The founders of more than 20 U.K. tech start-ups wrote to the government last month saying the restrictions, along with long notice periods and enforced gardening leave, were and “undermin[ing] the innovation that drives economic growth”.
The options set out 11 months ago ranged from a total ban on non-compete clauses to a partial ban, such as allowing non-compete clauses only for workers earning more than a set salary threshold, or limiting their length.
However, two of the six people quoted above said that the government would stop short of backing a specific option at this stage.
Ministers are expected to set out a broad intention of ensuring that non-compete clauses are no longer a hiring problem for start-ups and innovative firms, but finer details will be worked out further down the line in consultation with industry.
No. 10 declined to comment.
The announcement comes after Chancellor John Healey said he wanted to tackle the costs for businesses in his budget on Oct. 28. One of the six people quoted above said: “They want to sell it as pro growth and freeing up the labour market.”
AI Minister Kanishka Narayan said last week that the government was “working extremely rapidly” on potential changes to the system.
Non-compete clauses are common in the financial services industry. The lobby group TheCityUK opposed a ban earlier this year, arguing that non-compete clauses “promote competition and innovation in high-value industries” as they are often the “only way to pre-emptively protect confidential information and intellectual property.”
The government argued last year that even though non-compete clauses are “unenforceable” as a starting point under current law, ministers were “concerned about the behavioural effect of including a non-compete clause in an employment contract. Even if broadly drafted and unlikely to be enforceable, workers may perceive the clause as binding and comply with it for fear of legal repercussions.”
UK plans to announce ban on workers’ non-compete clauses in push for growth
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