Non-Compete Clauses: Burnham Promises Law to Stop Clauses Blocking Startup Hiring

What happened: the non-compete clauses promise in plain English

A non-compete clause is a contract term that can stop someone who leaves a job from joining a rival firm, or setting up a competing firm of their own, for a set period. Speaking in Manchester on Friday 9 October 2026, Prime Minister Andy Burnham said some employers have taken these clauses too far, that they can leave workers sitting on the sidelines without pay, and that in his view they hold back innovation and trap staff.

He confirmed the government will legislate so these clauses are no longer a barrier when startups and scaling firms are hiring. He used a football comparison, calling the idea a Bosman style change for the innovation sector. He added two wider points: workers in what he called the foundational, everyday economy should not be prevented from moving jobs either, and the government will bring forward options on the wider use of restrictive practices.

What the speech did not contain matters as much as what it did. There was no bill text, no start date, no pay threshold, no maximum clause length and no list of the firms or sectors the law will cover first. So this is a firm promise to legislate, made on the record in an official speech, but the detail that decides how much it helps any individual worker has not been published yet.

Key facts from the speech

Source: GOV.UK, PM speech at the Innovation Nation Summit, 9 October 2026.

What a sit-out can cost: a worked example

The Prime Minister noted that workers held back by these clauses are often unpaid while they wait. The table below is our own simple example, not a figure from the speech. It assumes a worker on £36,000 a year, which is £3,000 a month before tax, who cannot take a similar job during the restriction and is not paid during it. It shows gross pay forgone, before tax and before any other income.

Real contracts vary. Some restrictions are shorter, some jobs can be taken in a different field, and your own contract decides what applies to you today. The example simply shows why the length of a clause, and whether it is paid, can matter more to a household budget than the clause’s legal label.

What it means for your money

If you want to change jobs: nothing in your current contract changes today. The promise is to legislate, and until a law is passed and brought into force, the contract you signed is still the starting point. Before you hand in your notice, find your contract, check for any non-compete or wider restrictive clauses, note how long they run and what work they cover, and take advice if a move could breach them. Do not rely on this speech as permission to ignore a clause.

If you work for a startup or a growing firm: the stated aim is aimed at your employers first. If the law delivers what the speech promised, small fast growing firms should find it easier to hire experienced staff from bigger rivals, which over time can mean more vacancies and stronger pay offers for in demand skills. None of that is dated yet, so treat it as direction of travel, not a pay rise you can plan around today.

If you work in an everyday, foundational job: the Prime Minister said you should not be prevented from moving jobs either, and that options on wider restrictive practices will follow. That wording is broader and vaguer than the startup promise, so watch for the actual options when they are published. They, not the speech, will say whether clauses in sectors such as care, hospitality, retail or trades are limited, and how.

If you run a small firm: easier hiring cuts both ways. The same change that lets you recruit from rivals would let rivals recruit from you. The speech gives no detail on what protection, if any, firms will keep for trade secrets or client lists, so that detail is worth checking when the proposals appear.

For practical ways to earn more and move work in your favour now, see our guide to making money in the UK.

Non-compete clauses: your questions answered

Has the law on non-compete clauses changed today? No. The Prime Minister confirmed the government will legislate. A speech is not a law, and no bill, timetable or start date was published with it.

Will all non-compete clauses be banned? That is not what the speech said. The firm promise covers hiring at the most promising startups and scaling firms. A wider aim for everyday economy workers was stated, and options on wider restrictive practices are to follow, but a blanket ban was not announced.

Can I ignore a clause in my contract now? No. Until the law changes and applies to your situation, your signed contract remains the starting point. Check the exact wording and get advice before acting on it.

When will the change happen? No date was given in the speech. The next things to watch are the promised options on wider restrictive practices and the first published bill or consultation setting out scope and timing.

Source: GOV.UK, PM speech at the Innovation Nation Summit, 9 October 2026. The worked example was calculated by UK Markets Today and is illustrative only.