UK Government Promises Reform of Non-Compete Clauses

The Government has announced that it will legislate to restrict the use of non-compete clauses, as part of its plans to encourage innovation and make it easier for growing businesses to recruit experienced staff.

Speaking at the Innovation Nation Summit on October 9, 2026, Prime Minister Andy Burnham said that some employers had gone “too far” in using restrictions that prevent former employees from joining competitors or establishing businesses of their own. He described non-competes as a “drag on innovation” and promised legislation ensuring that they no longer create a barrier to hiring for promising start-ups and scaling firms. He also indicated that workers in the wider “everyday economy” should not be prevented from changing jobs.

The Budget on October 28, 2026, confirmed this commitment and stated that the reforms to non-compete clauses will apply “across the whole of the economy.” The Budget document notes that the Government will be consulting “shortly” to understand the wider use of restrictive practices, with a view to publishing a detailed Government position in early 2027 in advance of legislating.

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