Non-compete clauses are restraining Britain’s talent market
In the US, you can hire someone for a senior role and have them at their desk in a matter of weeks. Britain should ban non-compete clauses to enable the same, writes Eva Barboni
Why Britain should ban non-compete clauses
In his first major policy speech since his return to Parliament, Andy Burnham set a bold goal: making Britain the “world’s leading innovation nation”. He rightly recognised that this is the key to delivering economic growth and shared prosperity, and he provided some early signals that he will back British start-ups and scale-ups to succeed here.
Since the speech, I’ve had conversations with some of the entrepreneurs, business leaders and investors in Enterprise Britain’s growing community to get their views. The tone has been one of cautious optimism. He passed the ‘vibes’ test, but now we need the details.
One of Burnham’s litmus tests for any policy proposal should be whether it encourages and rewards risk. After all, innovation has never come from playing it safe.
Taking the leap and leaving a salaried job to start your own business is something many people would find terrifying. I know, because I’ve done it myself. It takes courage, optimism, and a willingness to put everything on the line to build something you believe in.
By becoming an entrepreneur, you’re signing up for sleepless nights, lower pay and a higher dose of stress. That should be recognised and rewarded, because our economic future depends on people being willing to make enormous sacrifices in the hope of building great businesses.
That means a tax policy that incentivises risk-taking from both entrepreneurs and investors, a culture that celebrates success and doesn’t unduly punish failure, and a labour market that enables our top talent to move seamlessly between roles.
I started my career in America, and I’m often asked what Britain could learn from the US. One lesson is the speed at which talent can move. In the US, you can hire someone for a senior role and have them at their desk in a matter of weeks. Here, it can take six months to a year. In some cases, even more.
We’ve called for the UK to ban non-competes and give employees the power to reduce their notice periods to one month. Bold changes like these would help innovative companies grow as quickly here as they can in the Valley.
As Burnham sets out his economic agenda, he has an opportunity to be as bold and innovative as the entrepreneurs he wants to support. It is critical that he seizes the moment and makes a compelling case to the nation about why supporting innovative companies to succeed in Britain can benefit us all.
Small item: The pitfalls of avoiding a party leadership contest
Having worked on a gruelling party leadership contest, I have no doubt that Andy Burnham’s camp is delighted that they seem likely to avoid one.
But one of the things that they – and the country – miss out on is an opportunity to stress test and sharpen policy ideas.
Assuming that Burnham doesn’t face a contest, it’d be like England turning up to the World Cup final having skipped the group stage. It might sound like a dream, but it could result in a painful reality check at the starting whistle.
A cynic’s guide to optimism
I’ve spent my career working in and around politics, so it’s safe to say I’m a bit of a cynic. But spending time with our incredible community always leaves me feeling genuinely hopeful about Britain’s future.
As a nation, we spend a lot of time talking about what Britain can’t do, what isn’t working, and why success is getting harder. I know I’m guilty of it myself.
But we should take every opportunity we can to celebrate what makes the UK a fantastic place to start and scale a business.
Quote of the week:
“The UK must be a place where entrepreneurs want to live.”
This quote from Bob Wigley’s ‘recipe for growth’ for Andy Burnham stuck with me.
Podcast/film/book/restaurant/anything recommendation:
I’ve recently started listening to Ed Conway’s “Stuff Matters” podcast.
In each episode, Ed (best known as the economics editor of Sky News) takes an everyday object – LEDs, car seats, AirPods – breaks it open, and discusses the hidden geopolitical forces at play within each component.
What stands out is the storytelling. Complicated topics are anchored in an object you can hold in your hand, conveying complex issues in an accessible and entertaining way.
It has given me inspiration for some of our work at Enterprise Britain, as we think about how to engage the public on often complicated economic policy issues.