Government confirms it will legislate to restrict non-compete clauses

Author: Alice Dunn

The Prime Minister Andy Burnham announced on Friday morning that the government will legislate to restrict the use of non-compete clauses, likening the move to “the Bosman ruling for the innovation sector”. What this legislative change will look like in practice remains to be seen.

Speaking from the Innovation Nation Summit in Manchester on Friday 9 October 2026, the Prime Minister confirmed the government’s clear intention to legislate in relation to the use of non-compete clauses, describing some businesses as having “gone too far” in their use of restrictive practices. The Prime Minister expressed concerns about the perceived impact of non-compete clauses preventing workers joining a rival organisation or setting up on their own, which he characterised as a “drag on innovation” and impacting dynamism within the economy.

While the clear focus of the announcement was on the perceived impact of non-compete clauses on start-up and scaling businesses in the UK, it confirmed that the changes would also apply to workers in what the Prime Minister referred to as “the foundational economy, the everyday economy”.

In his announcement, the Prime Minister also confirmed that the government proposed to address the wider use of what he referred to as “restrictive practices”, indicating that reform may not be limited to non-compete clauses alone and could extend to other post-termination restrictions, such as non-solicitation and non-dealing covenants or other business protections such as notice periods and the use of garden leave.