Andy Burnham has pledged to reform legislation concerning non-compete clauses, a proposal that has generated differing views within the City. Those in the tech and startup sectors have reportedly welcomed the news, while executives from banks and hedge funds are less pleased.
Eva Barboni, executive director of Enterprise Britain, argues that banning non-competes could lead to higher pay and more opportunities for advancement for workers. She cites a survey of 400 leaders of Britain’s fastest-growing companies, where 87 per cent identified non-competes as a barrier to hiring, and 79 per cent said the same about long notice periods.
Conversely, John Godfrey, managing director of public affairs at TheCityUK, believes banning non-compete clauses would be unnecessary and counterproductive. He states that the existing law already balances labour mobility with the protection of intellectual property. Godfrey also highlights that in sectors making up approximately 80 per cent of the UK economy, such as financial and professional services, non-competes are crucial for protecting intellectual property not covered by patents or licences.