To ask the Secretary of State for Business and Trade, what assessment he has made of the impact of employment contract non-compete clauses on (a) entrepreneurship and (b) economic growth.
Answered on
25 March 2025
This answer is a correction from the original answer.
A dynamic and entrepreneurial workforce is good for economic growth. There is evidence to suggest that non-compete clauses can act as a barrier to this innovation-driven growth, as they can prevent individuals from working for a competing business, or from applying their entrepreneurial spirit to establish a competing business.
Original answer
A dynamic and entrepreneurial workforce is good for economic growth. There is evidence to suggest that non-compete clauses can act as a barrier to this innovation-driven growth, as they can prevent individuals from working for a competing business, or from applying their entrepreneurial spirit to establish a competing business.
The previous government conducted a consultation on non-compete clauses in employment contracts, including on their economic effects. It found evidence that non-compete clauses restrict job mobility, put downward pressure on wages and impede innovation.