UK's Burnham pledges to loosen non-compete rules for startups
What's the deal? British Prime Minister Andy Burnham confirmed Friday he will legislate to ease restrictive non-compete clause rules for workers. Speaking at a government-backed innovation summit in Manchester, he said he wants to ensure such clauses "will no longer be a barrier to hiring for our most promising start-ups and scaling firms."
The catch: Burnham stopped short of committing to a full ban and has not set out how far the rules will go. The scope will come later, ahead of legislation.
Why now? Work on changing non-compete clauses began in 2025 under Burnham's predecessor, Keir Starmer. Proposals ranged from a total ban to partial limits, such as allowing clauses only for workers above a set salary threshold or capping their length.
What's the endgame? Burnham called the action the "Bosman ruling for the innovation sector" — a reference to the 1995 European Court of Justice decision that reshaped how footballers transfer between clubs. He argued the clauses "stunt innovation."
What could go wrong? The pledge follows intense lobbying on both sides. UK tech startups, including ElevenLabs and Synthesia, say the curbs undermine economic growth, while City firms and trade bodies such as TheCityUKDealroom has a profile for this one. Try Dealroom → and the Managed Funds AssociationDealroom has a profile for this one. Try Dealroom → oppose any changes.
The signal: By leaving the scope open, Burnham sets up a fight over where to draw the line between protecting employers and freeing workers to move. How far the rules reach will decide whether startups or the City come out ahead.
Read more: Politico Europe
