New legislation will be introduced to prevent non-compete clauses from hindering start-up firms seeking to recruit talent, Andy Burnham has announced, in a move he says could drive UK innovation forward.
PM says firms have gone 'too far'
The Prime Minister said some companies have gone "too far" in their use of restrictive practices, such as non-compete clauses, with workers caught in a "trap".
Addressing the Innovation Nation Summit in Manchester on Friday, he likened the move to the "Bosman ruling for the innovation sector".
Mr Burnham said: "I believe some businesses have gone too far in their use of restrictive practices such as non-compete clauses, a view I know shared by many in this room and across the sector.
"Non-compete clauses stop workers from joining a rival organisation, or indeed, setting up one of their own after they have left their role, and I think that's a drag on innovation and prevents the best really being energised and bringing that dynamism to the economy."
Legislation to remove barriers
"So we are looking at changing this. They are often held back and unpaid during the time they have to sit out on the sidelines, and it does, as I say, stunt innovation and traps workers.
"So I can confirm today we will legislate to make sure that non-compete clauses will no longer be a barrier to hiring for our most promising start-ups and scaling firms."
"Call it, if you like, the Bosman ruling for the innovation sector, but I think it's needed and long overdue."
"And we will ensure, by the way, that workers in the foundational economy, the everyday economy, are not prevented from moving jobs too."
Three key measures for innovation
Mr Burnham had previously outlined his ambitions to position the UK as a globally leading "innovation nation".
He put forward three key measures, encompassing the devolution of innovation funding, pinpointing clusters across the UK with the capacity to become truly world-leading, and pushing for greater collaboration between those clusters.
Mr Burnham suggested these initiatives could set the UK on course to begin to "punch above its weight".
