UK plans to announce ban on workers’ non-compete clauses in push for growth
The government believes the clauses, common in tech and financial firms, undermine innovation.
The U.K. government is set to announce a potential ban on non-compete clauses in workers' employment contracts, aiming to foster economic growth, according to six sources familiar with the discussions. Prime Minister Andy Burnham is expected to make the announcement personally, possibly as early as Friday. This follows recommendations from Keir Starmer's government in November 2025, which explored various options, ranging from a complete ban to partial measures such as limiting clauses to higher earners or restricting their duration.
The move comes in response to concerns from over 20 U.K. tech start-ups, which argue that non-compete clauses stifle innovation and create hiring obstacles for innovative firms. The government is expected to outline a broad commitment to removing non-compete clauses as a hiring hurdle for start-ups, with further details to be determined in future consultations.
Chancellor John Healey has emphasized the need to address business costs in the upcoming budget on October 28. While non-compete clauses are prevalent in the financial services sector, the industry lobby group TheCityUK had previously opposed any ban, arguing that they protect confidential information and intellectual property, promoting competition and innovation in high-value industries.
However, the government maintains that while non-compete clauses are currently unenforceable, they are concerned about the perceived restrictions on workers' ability to change jobs due to the presence of such clauses in employment contracts.
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