Autumn Budget 2026 – Non-competes: change is coming but detail pending

On Wednesday, the Government used the Autumn Budget to confirm that it will legislate on non-compete clauses so that they “will no longer be a barrier to hiring for our most promising startups and scaling firms”. The announcement follows weeks of speculation sparked by Prime Minister Andy Burnham’s speech at the Innovation Nation Summit. 

Detail is still scarce, but three points are clear: 

• the reforms “will apply across the whole of the economy”;
• the Government will consult shortly on “wider restrictive practices” (which we understand to mean the use of notice periods and garden leave to restrict employee movement); and
• the Government will set out its detailed position on these matters in early 2027, before legislation is finalised. 

The previous Government, under Keir Starmer, consulted on potential reform to use of non-compete clauses by employers in November 2025. Its policy objectives were similar to those now cited by the Burnham Government, which appears keen to finish the job. The 2025 working paper set out five options for reform:

• a statutory limit on the length of non-compete clauses;  
• a statutory limit that varies with company size;
• an outright ban on non-compete clauses;
• a ban on non-compete clauses below a salary threshold such as the additional rate tax threshold; and
• a ban below a salary threshold combined with a statutory three-month limit. 

For now, employers must wait for the detail. 

If you would like to discuss any aspect of your business protection strategies in the meantime, please get in touch with your usual CMS Employment team contact.

Tabitha Glover, Graduate Solicitor Apprentice, contributed to the preparation of this legal update.