What We Know About Burnham's Plan to Curb Non-Compete Clauses

Prime Minister Andy Burnham said Oct. 9 that his government will introduce legislation curbing non-compete clauses in employment contracts, telling a business summit in Manchester the restrictions have "gone too far" and are holding back innovative UK companies, according to the BBC.

Burnham did not specify the exact scope of the restrictions but said they would apply to the "everyday economy" as well as to "promising start-ups and scaling firms." Details are expected alongside the Budget on Oct. 28, the BBC reported, citing earlier reporting by Politico and the Financial Times.

What did Burnham actually say?

Speaking at the summit, Burnham argued that non-compete clauses have forced workers to go without pay after leaving a job and have made it harder for growing firms to hire staff. He said the clauses discourage employees from joining rival companies or founding their own businesses, calling that "a drag on innovation," per the BBC.

He invoked the 1995 Bosman ruling — the European Court of Justice decision that let footballers move clubs freely once their contracts expired, reshaping the transfer market — and said he hopes reining in non-compete clauses could be "the Bosman ruling for the innovation sector."

How widespread are non-compete clauses in the UK?

Research cited by the government and reported by the BBC estimates roughly 5 million jobs in Britain are covered by non-compete clauses, which typically last around six months. The clauses are commonly associated with financial services and technology but, per that estimate, extend well beyond those sectors.

By the numbers

• ~5 million UK jobs are covered by non-compete clauses, according to government-cited research.
• ~6 months is the typical duration of those clauses.
• Oct. 28 is the date the government is expected to unveil restriction details, alongside the Budget.

Why is this coming up now?

The Starmer government had been exploring restrictions on non-compete clauses since late last year, considering options including a total ban, a ban above a certain salary threshold, or limits on how long clauses can run, the BBC reported. Burnham's comments confirm the policy is moving forward under his premiership, timed to a broader pitch on boosting innovation-driven sectors ahead of the Budget.

Burnham also said there is "more to do" on tax policy to encourage promising firms to stay in the UK rather than seek investment abroad, and signaled more detail at the Budget on using public investment to draw in private funding — including a plan for every UK region to have a dedicated fund modeled on Greater Manchester's Good Growth Fund, launched during his time as the city-region's mayor.

Who is pushing back?

The Recruitment and Employment Confederation warned against "sweeping" changes, saying non-compete clauses play a "vital role" in protecting commercially sensitive information and client relationships, according to the BBC.

The previous Conservative government had ruled out a total ban after employers warned it could reduce investor confidence in the UK or push companies to tighten internal information-sharing, the BBC reported. Burnham's government has not yet said whether it will pursue a full ban, a salary-threshold approach, or duration limits.

What terms do readers need to know?

Non-compete clause: A contract provision restricting an employee from working for a competitor, or starting a competing business, for a set period after leaving a job.

Bosman ruling: The 1995 European Court of Justice decision allowing footballers to move clubs without a transfer fee once their contracts expired, which reshaped player mobility across European football — the comparison Burnham used for his innovation-sector goal.

What to watch

• Whether the Oct. 28 Budget specifies a total ban, a salary threshold, or a time limit on non-compete clauses.
• How the Recruitment and Employment Confederation and other employer groups respond once legislative text is published.
• Whether the policy covers all sectors or is targeted at "promising start-ups and scaling firms," as Burnham suggested.
• Any related tax measures aimed at keeping high-growth companies in the UK, which Burnham flagged without detail.
• Regional investment fund plans modeled on Greater Manchester's Good Growth Fund, expected to get further detail at the Budget.

The full scope of the legislation, including which workers and salary bands it covers, remains undefined until the government publishes details alongside the Budget later this month.

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