Budget 2026: a quiet day for employers, with non-competes lurking in the small print

What the government has said

The government will legislate so that non-competes “will no longer be a barrier to hiring for our most promising start-ups and scaling firms”, and so that workers in the everyday economy are not prevented from moving jobs. It describes workers bound by non-competes as “often held back and unpaid”.

Although presented as a measure to help start-ups, the government says the reforms “will apply across the whole economy”. Sectors such as financial services should not expect a carve-out.

The government will also “consult shortly to understand the wider use of restrictive practices”, and will set out a detailed position in early 2027 before legislating. Notice periods and garden leave are not named, but they are the obvious candidates.

What was unsaid

Despite the promise that detail would come with the Budget, there is almost none. There is no decision on a ban, a cap or a salary threshold, no requirement to pay during a restriction, no start date and nothing on whether existing clauses will be caught. Nor is there any indication of the direction of travel on these specifics. 

This is also not the first consultation we’ve seen in this area. The government sought views on reform options in a working paper that closed in February 2026, but has not yet responded. It is now consulting again.

What employers should do now

For now, there is very little for employers to do, other than to be clear about the restrictions they use and other protective measures they have in place. Once the consultation is published, we will reach out to our clients to discuss options and strategies.

If you would like to discuss what this means for your business, please reach out to your usual contact at A&O Shearman.

Subscribing to our global Employment blog 

Whether you’re tracking UK Employment Rights Act reforms, preparing for EU pay transparency obligations, or navigating new challenges around AI, workplace monitoring, and industrial relations, our global Employment blog delivers practical, business-focused insights from across our international network. With jurisdictions clearly identified in every title, you can quickly focus on the developments that matter most to your business. Subscribe today for expert analysis of the latest employment law changes and workplace trends worldwide.