Andy Burnham is poised to unveil a government crackdown on non-compete clauses in employment contracts, commonly used by technology and financial services companies. The prime minister is expected to announce in a speech on Friday that the government is determined to tackle these restrictions, which limit employees' ability to work for rivals after leaving a business. The measures could also affect restrictive notice periods.
A senior Whitehall figure described the announcement as a "big win for pro-business forces in the government". Burnham will confirm the crackdown in Manchester alongside business secretary Jonathan Reynolds and former prime minister Gordon Brown. This follows a letter from over 20 UK tech founders and executives, including those from Recursive Superintelligence, Synthesia and Fuse Energy, urging ministers to limit non-competes.
They argue such practices hamper British businesses' ability to compete with Silicon Valley and undermine innovation. The issue gained prominence after Google DeepMind employees left to launch rival AI businesses. About 5 million employees in Britain work under contracts containing non-compete clauses, typically lasting six months.
A review was launched last year under Sir Keir Starmer, who set out options ranging from an outright ban to a three-month time limit. Burnham is expected to set the "direction of travel" rather than outline fine details. Enterprise Britain found 87 per cent of scale-up leaders regard non-competes as a hurdle when hiring.
Brent Hoberman co-chair of Enterprise Britain said banning them helped make Silicon Valley what it is today. However, the CBI business lobby group has said it has not seen evidence they are a significant drag on innovation.
Source: Financial Times Companies · Summarized by HeadlinesBriefing