Burnham promises to curb non-compete rules in job contracts
The prime minister says restrictions on what workers can do after leaving roles have "gone too far".
Burnham vows to rein in non-compete clauses in employment contracts
Andy Burnham has pledged to limit companies’ power to restrict what employees can do after they leave a job.
In a speech, the prime minister said the use of non-compete clauses in employment contracts had "gone too far" and was holding back innovative UK firms.
He said the clauses had left workers without pay after leaving a role, while also making it more difficult for expanding businesses to recruit new staff.
Before the Budget later this month, he also said there was "more to do" on tax to help promising companies remain in the UK.
Sir Keir Starmer's government had been considering possible limits on non-compete clauses since late last year, including a complete ban, a ban above a certain salary threshold, or restrictions on how long they can last.
While often linked to the financial services and technology sectors, research cited by the government has estimated that around 5 million jobs in Britain are covered by the clauses, which typically last about six months.
Speaking at a business summit in Manchester, Burnham confirmed his government would move ahead with new legislation to ensure the clauses can "no longer be a barrier" to hiring new staff.
He said their use had prevented workers from leaving to join other companies, or from starting their own firms instead, adding: "I think that's a drag on innovation."
Referring to a landmark 1995 court ruling credited with transforming the football transfer market in Europe, he said he hoped curbing non-compete clauses could become the "Bosman ruling for the innovation sector".
Burnham did not set out the exact scope of the restrictions he is planning, but indicated they would cover the "everyday economy" as well as support "promising start-ups and scaling firms".
The previous Conservative government had ruled out a total ban
The prime minister tried to present the announcement on non-compete clauses as part of a broader government effort to strengthen innovative parts of the economy.
He told the summit that although the UK was home to outstanding research and start-ups, too many companies had gone overseas in search of investment.
He also indicated that the government would "say more" at the Budget about plans to use public investment to help attract private funding into the economy.
He added that he wanted every UK region to have a dedicated fund for this purpose, based on the Good Growth Fund launched in Greater Manchester last year, during his time as mayor of the city-region.
He also suggested the government was examining ways to ensure the tax system helps the UK keep high-growth companies.
He said: "One of our biggest challenges is breaking through our own ceiling. Too often, our best ideas are developed and scaled overseas, and with it the jobs, technology and investment that goes with them."
"So I know there is more to do to fix that, specifically on tax, to encourage people to stay and scale."