Prime Minister Andy Burnham has pledged to introduce new legislation aimed at curbing companies' ability to restrict what their former employees can do after leaving a job. Speaking at a business summit in Manchester, Mr Burnham stated that the use of non-compete clauses in employment contracts had "gone too far" and was impeding innovative UK companies.
Mr Burnham argued that these clauses have forced workers to go without pay after leaving roles and made it more difficult for growing firms to hire new staff. He confirmed his government would press ahead with legislation to ensure these clauses "no longer be a barrier" to hiring and to prevent workers from being stopped from joining other companies or founding their own firms.
While the scope of the planned restrictions was not specified, Mr Burnham suggested they would apply to the "everyday economy" and assist "promising start-ups and scaling firms." The government is expected to unveil details of the proposed restrictions alongside the Budget on 28 October. Research cited by the government suggests approximately 5 million jobs in Britain are covered by such clauses, typically lasting around six months.
The Prime Minister also hinted at further tax measures to encourage promising firms to remain in the UK and signalled plans to use public investment to stimulate private funding across all UK regions, potentially modelled on Greater Manchester's Good Growth Fund.