UK's Burnham Proposes Non-Compete Clampdown – Draws Questions, Criticism

Tom Burroughes

13 October 2026

A national UK ban or severe limit on non-competes will damage rather than benefit sectors such as alternative investments and the wider financial industry, a trade group warns.

UK Prime Minister Andy Burnham has said his government will curb the use of NCs as a way of encouraging innovation in sectors such as technology.

In response to Burnham’s speech late last week, which was reported by the BBC and other outlets, the Alternative Investment Management Association deputy CEO and global head of Jiri Krol said the measure could hurt particular sectors.

“The UK government risks throwing the baby out with the bathwater in its efforts to support the tech sector. For alternative investment managers, non-competes play a vital role in protecting highly sensitive investment strategies, intellectual capital, client relationships and market-sensitive information,” Krol said in a statement yesterday.

As reported and discussed here by WealthBriefing earlier in 2026, some policymakers think non-competes curb innovation and labour market flexibility. Defenders say NCs are necessary if firms want to guard intellectual property and the human capital they invest in.

Reports said Burnham believes that the use of non-compete clauses in employment contracts had "gone too far" and was holding innovative UK companies back. The government has cited research saying that as many as five million jobs are covered by NCs.

Burnham referenced a landmark 1995 court ruling that is credited with shaking up Europe’s football transfer market, claiming that limiting NCs will be the equivalent of the "Bosman ruling for the innovation sector."

Reports said that Burnham did not specify details. The prior Conservative government examined NCs and ruled out a total ban.

NCs are familiar in professions such as banking and wealth management.

“A blanket ban risks solving one problem by creating a much bigger one elsewhere. It would replace a framework that allows firms to negotiate proportionate restrictions with a one-size-fits-all approach that fails to reflect the realities of working in financial services,” Krol said.

A government working paper, which was published in November 2025, said: “Despite the UK having one of the most flexible labour markets among advanced economies, persistent low job mobility, weak competition in certain sectors, and low innovation are constraining productivity and economic growth. Non-compete clauses play a part in restricting employee movement, limiting knowledge spillovers, and can undermine incentives for innovation.”

"We surveyed our employer clients on their use of non-competes and their views on reform, and the results suggested this kind of change would be unwelcome for most businesses. The most common preference was for the government to maintain the status quo," Jennifer Millins, partner at employers rely on non-competes. The most popular option among those put forward was a statutory duration cap, with respondents favouring limits of six or 12 months."

"In practical terms, employers that rely on non-competes should start preparing now by reviewing their existing clauses, including duration, scope and the roles to which they apply, to understand their potential exposure once restrictions are introduced; considering whether key protections, such as safeguarding confidential information, client connections and team stability, can be achieved through other means like non-solicitation or non-dealing clauses, garden leave or incentive structures; watching closely for the detailed legislative proposals, since it is hoped any cap or ban will distinguish between existing and future arrangements, meaning the timing of recruitment, promotions and contract renewals may matter; and engaging in any further consultation, directly or through trade bodies, if they have concerns about the impact on their business or sector," Millins added.

The UK’s Competition and Markets Authority has become increasingly interested in non-competes. It has advocated banning NCs below a certain salary threshold and a statutory limit on an NC duration above a salary threshold.

Foreign cases can prompt calls for the UK to follow suit with restrictions. As an example, in 2024 the US Federal Trade Commission issued a final rule banning NCs nationwide, “protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation,” as it put it. (However, the FTC was subsequently overruled.)

"My initial view is that this is now the fourth time in 10 years the Government has looked at non-competes so it seems set to happen, at least on some level – there is still very little detail on what this will look like but I think we can expect some change," Catriona Watt, partner, Fox & Partners, a London law firm, told WealthBriefing. "We will likely know more around the time of the Budget later this month. Historical proposals have included a statutory duration cap, an outright ban and salary-based threshholds to protect lower paid workers who are not in a position to challenge restraints."

"Consultations and proposed reforms have done little to outline the evidence relied on to demonstrate how non-competes impact perceived low job mobility and innovation, which is said to constrain productivity and appear to be a driver behind proposed reforms. Clients in a number of industries, such as financial services, the fintech sector and the insurance sector (which are not known to complain of lack of innovation), use non-competes and are unlikely to favour a ban," she added.