Burnham promises law to curb non-compete clauses, with the detail still open
Announced at a Manchester business summit, the pledge leaves open whether the clauses will be banned or only shortened, with details expected at the 28 October Budget.
By
Callum Fairbairn
Prime Minister Andy Burnham has promised legislation to stop non-compete clauses from holding back hiring at start-ups and scaling firms. He made the pledge on 9 October in a speech to a business summit in Manchester, according to ICLG and the BBC. What the law will actually say has not been settled.
In brief
- He made the pledge on 9 October in a speech to a business summit in Manchester, according to ICLG and the BBC .
- Both figures come from research cited by the government, as reported by the BBC.
- Lawyers quoted by ICLG are asking for clarity on whether the clauses will be banned or simply shortened, possibly with pay during any restriction.
A Bosman comparison without a blueprint
Burnham told the audience that some companies had “gone too far” with restrictive practices, non-compete clauses among them. The BBC reports that he linked the clauses to workers going without pay after leaving a job, and to difficulties for growing firms trying to recruit. He also argued that they stop people moving to another company or launching their own, which he described as a “drag on innovation”.
He compared the planned change with the Bosman ruling, the landmark 1995 court decision credited with transforming the football transfer market in Europe. Burnham hopes reform could prove a “Bosman ruling for the innovation sector”. ICLG explains that the original case let footballers whose contracts had expired change clubs freely.
On the substance, the speech offered little. Neither source says whether the government will ban the clauses outright, limit how long they can last or restrict them for particular groups of workers. Burnham did indicate that the measures would reach what he called the “everyday economy” as well as start-ups, and said ministers would put forward options on other restrictive practices.
What a non-compete clause does
A non-compete clause is a contract term that prevents someone from working for a competitor, or setting up a rival business, for a fixed period after they leave an employer. ICLG notes that a former employee may therefore be shut out of their own sector long after leaving.
Both figures come from research cited by the government, as reported by the BBC. Under current law, ICLG says, these clauses cannot be enforced unless the employer shows they are reasonable. The government has nonetheless observed that some workers obey terms that would struggle to survive in court because they are worried about the legal risk of ignoring them.
Corinne Aldridge, who leads the employment practice at the law firm Kingsley Napley, told ICLG that long restrictions are especially hard on senior staff. In her words, notice of half a year combined with a further six to twelve months of non-compete is common at executive level, and many people think the balance favours the employer over the employee.
The options already on the table
The pledge follows a working paper from the Department for Business and Trade, dated 26 November 2025, issued while Sir Keir Starmer was prime minister, which took responses until 18 February 2026. The Competition and Markets Authority replied on 25 February.
| Option in the working paper | What it would mean |
|---|---|
| Outright ban | No non-compete clauses in contracts |
| Statutory time limit | A legal cap on how long a restriction can last |
| Ban below a salary threshold | Lower earners protected from non-competes |
| Salary protection plus duration limits | A threshold, with a time cap for higher earners |
According to ICLG, the Competition and Markets Authority backed the last of these: a ban below a pay threshold, with a limit set in law on duration for people earning more.
Employers urge caution
The Recruitment and Employment Confederation cautioned against “sweeping” changes, according to the BBC, arguing that the clauses help shield confidential commercial information and customer relationships. The BBC adds that the previous Conservative government ruled out a total ban after employers said it could weaken investor confidence in the UK or lead firms to tighten how information circulates internally.
Dan Pollard, a partner at Fisher Phillips, called the speech short on detail. He told ICLG that, used properly, non-competes safeguard know-how, particularly early in a company’s life when no patent or comparable protection exists yet. Aldridge took a more upbeat view, saying reform would give a big lift to talent mobility and would probably push employers to find more inventive ways of protecting their business.
Budget timing and related measures
- The government is understood to plan to publish the details alongside the Budget on 28 October, the BBC says. Politico and the Financial Times were the first to report the proposals.
- Burnham acknowledged that further tax measures are needed to keep promising firms in the UK as they grow, and signalled that the Budget would say more about using public investment to draw in private funding. He also said he wants every region to have its own dedicated fund, using the Greater Manchester Good Growth Fund, set up last year while he was mayor, as the template.
- ICLG reports that the government’s timetable lifts the ceiling on compensation for unfair dismissal from January 2027 and shortens the length of service needed to claim, from two years down to six months. Pollard argued that these changes would discourage innovators from hiring in the UK and that non-compete reform would not make up for that.
Until the Budget, employers and workers are left with a political commitment rather than a draft law. Lawyers quoted by ICLG are asking for clarity on whether the clauses will be banned or simply shortened, possibly with pay during any restriction.
Featured image. Source: Wikimedia Commons. Credit: Julius (User:Juliux). License: CC BY-SA 3.0.
