The government will legislate to reform non-compete clauses in employment contracts so that they do not prevent startups and scaling firms from hiring, or stop workers in the everyday economy from moving jobs. Chancellor John Healey announced the reform in the Autumn Budget on 28 October 2026, saying the changes would help fast-growing firms attract talent and let people who helped build one successful company move easily to the next. The Budget states that the reforms will apply across the whole economy, not only to high-growth sectors.

Consultation before legislation

The government has not yet published the detailed rules. It says it will consult shortly to understand the wider use of restrictive practices, so that its action is proportionate, evidence-based and supportive of both business dynamism and the protection of intellectual property. A detailed position will follow in early 2027, ahead of legislation. That timetable matters for employers and employees alike: until the consultation concludes and the law is set out, existing non-compete clauses remain governed by current contract law, and workers who are unsure about a clause in their own contract should take advice rather than assume it will no longer apply.

Why the change matters for growth firms

Non-compete clauses have long been a friction point for growing companies, particularly in technology and other fast-moving sectors, where the ability to hire experienced staff quickly can decide whether a business scales or stalls. Supporters of reform argue that loosening the clauses will spread skills more widely and give workers more bargaining power, while critics will want safeguards for genuine trade secrets and client relationships. The consultation will test where that balance should fall, and its outcome will shape how freely talent can move between British firms in the years ahead.

Sources: GOV.UK Budget 2026, Workplace Journal.