Burnham pledges legislation to curb non-compete clauses on 5 million jobs

Prime Minister Andy Burnham promised on 9 October to curb companies' ability to restrict what workers do after leaving their job, saying non-compete clauses in employment contracts had "gone too far". Speaking at the Innovation Nation Summit in Manchester, he confirmed the government would legislate so the clauses can "no longer be a barrier" to hiring new staff.politico.eu

The pledge matters because research cited by the government estimates around 5 million jobs in Britain are covered by the clauses, typically lasting around six months. Burnham said the clauses had forced workers to go without pay after leaving a role and made it harder for growing firms to hire. He called their use "a drag on innovation".business-live.co.uk

What the pledge commits to

Burnham set out the mechanism plainly: non-compete clauses stop workers from joining a rival organisation or setting up their own after leaving, and those workers are "often held back and unpaid during the time they have to sit out on the sidelines". He said this stunts innovation and traps workers, and confirmed the rules would also cover workers in the "everyday economy".

The scope of the restrictions remains unspecified. Burnham suggested they would apply to the "everyday economy" as well as helping "promising start-ups and scaling firms", but did not set out how far the curbs would go. The government plans to unveil details of the proposed restrictions alongside the Budget on 28 October, ahead of legislation.

Proposals to change non-compete clauses began in 2025 under Burnham's predecessor, Keir Starmer. The options ranged from a total ban on non-compete clauses to a partial ban, such as allowing them only for workers earning more than a set salary threshold, or limiting how long they can last. The previous Conservative government had ruled out a total ban.

Where the numbers came from

The 5 million jobs figure comes from research cited by the government, which estimates the clauses typically last around six months. Although commonly associated with financial services and technology, the coverage extends across Britain's workforce. Burnham said he hoped reining in the clauses could prove the "Bosman ruling for the innovation sector", referencing the 1995 European Court of Justice decision that changed how star players transfer between football clubs.

The pledge arrives ahead of the Budget on 28 October, where Burnham signalled more action on tax. He told the summit that too many companies had gone abroad in search of investment, saying: "One of our biggest challenges is breaking through our own ceiling. Too often, our best ideas are developed and scaled overseas." He added there was "more to do" on tax to encourage firms to stay.

Lobbying has run both ways. The previous Conservative government ruled out a total ban after hearing from employers that it could reduce investor confidence in the UK or prompt companies to tighten how they share information internally. Burnham said the clauses had forced workers to go without pay after leaving a role.

Who is lobbying on each side

Burnham framed the announcement within a wider push for innovation, setting an ambition for the UK to make a major scientific breakthrough within the next decade, highlighting tackling cancer, dementia and nuclear fusion. He also said he wanted all UK regions to have a dedicated fund to encourage private funding, modelled on the Good Growth Fund launched in Greater Manchester last year.

The next step is the Budget on 28 October, when the government is expected to publish details of the proposed restrictions on non-compete clauses, before legislation follows. Burnham said the government would "say more" at the Budget about using public investment to encourage private funding, and hinted at tax changes to help high-growth companies stay in the UK.