Prime Minister Andy Burnham said on 9 October 2026 that the UK government would legislate so non-compete clauses no longer prevent promising startups and scaling firms from hiring. This is an announced plan, not a ban already in force: the reporting does not give draft legislation, its detailed rules or a commencement date.
What did Burnham announce?
Speaking at the Innovation Nation Summit in Manchester on Friday, 9 October 2026, Burnham said the government would legislate to stop non-compete clauses from being a barrier to hiring for promising startups and scaling firms. He argued that the restrictions hold workers back and slow innovation. The Independent reported that he likened the proposed change to a “Bosman ruling for the innovation sector,” referring to the European Court of Justice case associated with out-of-contract footballers moving between clubs.
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Burnham also said workers in the “foundational economy” should not be prevented from moving jobs. The announcement sat within a broader innovation agenda that included devolving innovation funding, identifying high-potential clusters around the UK and encouraging collaboration between clusters. Those are stated measures and ambitions; the announcement does not establish that they have produced results.
What are non-compete clauses?
A non-compete clause is a contractual restriction intended to stop a worker, after leaving a job, from joining a rival organisation or setting up a competing business. Such clauses can affect a worker’s next job or business plans, while employers may view restrictions as a way to protect legitimate interests. The policy question is how to balance those interests with workers’ ability to move and firms’ ability to hire.
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Is the UK ban in force, and what is still unknown?
No. Burnham announced an intention to legislate; the available report does not say that Parliament has enacted a law. It also does not provide bill text or settle who would be covered, which sectors or workers might be included, what exceptions would apply, how compliance would be enforced, whether existing agreements would be affected, or when any rules would begin.
Those details matter because a policy could be a complete ban, a restriction limited to some workers, or a set of limits that depend on salary or duration. The announcement’s emphasis on hiring by startups and scaling firms should not be treated as proof that the eventual law will apply only to them—or that it will cover every worker in the same way.
How does the CMA proposal compare with the announcement?
In its 25 February 2026 response to a Department for Business and Trade working paper, the Competition and Markets Authority supported reform of the existing framework, emphasizing the link between labour mobility and economic growth. Its preferred balance was a ban on non-competes below a salary threshold and a statutory cap on their duration above that threshold. The CMA’s response is an earlier recommendation, not confirmation of the government’s final design.
| Policy question | CMA’s February recommendation | What Burnham confirmed on 9 October |
|---|---|---|
| Ban or threshold | Ban non-competes below a salary threshold. | No threshold or blanket-ban design was specified in the reported announcement. |
| Duration | Set a statutory duration limit above the threshold. | No maximum duration was specified. |
| Workers and sectors covered | Not stated in the cited summary of the CMA’s recommendation. | The stated hiring aim concerned promising startups and scaling firms; Burnham separately referred to workers in the foundational economy. Exact legal coverage was not stated. |
| Other employment restrictions | Not stated in the cited summary of the CMA’s recommendation. | The announcement did not specify whether rules would address notice periods or gardening leave. |
| Start date, exceptions and enforcement | Not stated in the cited summary of the CMA’s recommendation. | Not stated in the reported announcement. |
What was the startup-sector outcry?
A 29 September secondary summary of a Financial Times report said more than 20 founders, executives and investors had signed a joint letter calling for limits on non-competes, long notice periods and gardening leave. The summary said the signatories argued those practices obstruct entrepreneurship and competition. It named ElevenLabs, Synthesia, Ineffable Intelligence, Recursive Superintelligence, Fuse Energy, Olix and Fractile among companies associated with the letter. Because this account is a secondary summary rather than the original Financial Times article, it should not be read as a fully verified account of every signatory’s position. The summary also reported that City UK’s Miles Celic and the CBI’s Matthew Percival opposed changes, calling them unnecessary and unsupported by evidence.
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Was this the government’s first signal on non-competes?
No. A statement in Parliament on 18 March 2026 had already said the government was backing workers who wanted to move firms by placing limits on non-compete clauses it said stifled innovation and dynamism. That statement placed the measure among wider plans for the UK AI sector, indicating that the October announcement followed an existing policy direction. The parliamentary statement did not establish the detailed design or start date of a law.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should workers and employers do now?
Until legislation and its commencement arrangements are published, the announcement does not itself change the terms of an existing contract. Workers considering a move should check the wording and scope of their agreement rather than assume the proposed policy has already released them from a restriction. Employers should likewise avoid treating the announcement as a settled rulebook: the final approach could differ from both Burnham’s stated aim and the CMA’s earlier recommendation.
For anyone assessing a future proposal, the decisive details will be whether a ban is broad or salary-threshold-based, what duration limits apply, which workers and sectors are covered, and whether the rules address only non-competes or also notice periods and gardening leave. The balance between employers’ legitimate interests and workers’ freedom to move will depend on those provisions.
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