The UK government is preparing to announce restrictions on non-compete clauses in employment contracts, a move that could make it easier for millions of workers to change jobs, join rival companies or start their own businesses.
Prime Minister Andy Burnham is expected to outline the government’s plans during a speech in Manchester later today, Friday, 9 October, following growing pressure from technology founders and investors who argue that restrictive employment contracts are holding back innovation and business growth.
According to the Financial Times, the proposed reforms could affect approximately five million workers across Great Britain whose contracts contain restrictions preventing them from working for competitors after leaving their jobs.
Non-compete clauses are commonly used by employers to prevent former employees from joining competing businesses or establishing rival companies for a specified period. While these agreements are intended to protect commercially sensitive information, intellectual property and business relationships, critics argue that they can also limit career progression, restrict access to better-paid opportunities and discourage entrepreneurship.
Government research published in November 2025 estimated that approximately 26% of workers in Great Britain are subject to non-compete clauses, with restrictions typically lasting around six months.
The government has been considering several approaches to reform, including introducing statutory limits on the duration of non-compete agreements, banning them entirely or preventing employers from imposing them on workers earning below a specified salary threshold.
The proposals follow calls from more than 20 British technology founders and investors who have urged ministers to make it easier for skilled professionals to move between businesses. According to the Financial Times, founders and investors associated with technology companies including Synthesia and Recursive Superintelligence have raised concerns about the impact of restrictive employment agreements on Britain’s startup ecosystem.
For technology companies, particularly those developing artificial intelligence and other specialist technologies, access to experienced professionals can be critical to growth. Supporters of reform argue that limiting non-compete clauses would allow startups to recruit more easily from established businesses while giving experienced employees greater freedom to launch their own ventures.
The changes could also have implications for international professionals working in Britain’s technology and financial services industries, including immigrants considering moving between employers or establishing businesses after gaining experience in the UK.
For foreign-born entrepreneurs, restrictions imposed by former employers can create additional challenges when launching startups in industries where they have developed specialist knowledge. Reforming these agreements could remove some of those contractual barriers and provide greater flexibility for professionals seeking entrepreneurial opportunities.
However, changes to employment contracts would not alter existing immigration requirements. International workers sponsored under the Skilled Worker visa route would still need to comply with applicable sponsorship rules when changing employers or establishing businesses in Britain.
While technology founders have welcomed the prospect of reform, some business groups maintain that non-compete agreements serve a legitimate purpose in protecting confidential information and commercial interests. The Confederation of British Industry has questioned whether the available evidence demonstrates that such restrictions significantly undermine innovation.
The Competition and Markets Authority has also contributed to the debate, recommending restrictions that would prohibit non-compete clauses below a specified salary threshold while limiting their duration for higher-paid employees. The regulator believes greater labour mobility could support competition, productivity and economic growth.
The government has yet to confirm which approach it intends to adopt or when any changes would take effect. Existing non-compete agreements therefore remain subject to current employment law.
