Member Article

Government looks to break down barriers curbing British innovation and entrepreneurship

Are employees prevented from starting up their own businesses after leaving a job? The government is set to readdress rules of employment following increased reports suggesting British entrepreneurship is being stifled.

In a move designed to back small businesses and entrepreneurs across the country,Business Secretary Sajid Javid is launching a call for evidence asking for views on what are known as ‘non-compete clauses’.

Such clauses can be written into employment contracts and can prevent individuals from competing against their former employer or working for a competitor for a set period of time, sometimes up to 9 months after leaving a firm. The clauses are only enforceable in a court of law if it protects a legitimate interest and is reasonable.

However, there have been suggestions that they can hinder start-ups from hiring the best and brightest talent, so the government is asking for views from individuals and employers on whether this type of practice is acting as a barrier to innovation and employment.

Action to prevent red tape from stifling entrepreneurship

The government is asking businesses and entrepreneurs to give their views on whether clauses that prevent an individual from competing against their former employer are stifling opportunities to innovate and grow.

Known as non-compete clauses, these are provisions in a contract that prevent an individual from competing against their former employer and can include restrictions on individuals approaching former clients or working for a competitor for a set period of time, sometimes up to 9 months, after leaving a company.

Due to be launched shortly, the call for evidence will look for views from individuals and employers on whether this type of restrictive practice is acting as a barrier to innovation and employment and preventing British start-ups from prospering.

Innovation Survey

With some of Europe’s leading innovative sectors, including biopharmaceuticals, aerospace and automotive sectors based here in the UK, the Business Secretary wants firms up and down the country to contribute views on how government can work with them to create new opportunities from big ideas to improve services, drive growth and create jobs.

The results of the survey will feed into the government’s Innovation Plan, which will set out how we can lead the fourth industrial revolution in innovation and new technologies by creating opportunities for British businesses to tap into lucrative new markets.

Sajid Javid said: “Home to some of the most innovative companies in Europe, Britain is already ahead of the curve in many ways when it comes to driving forward new ideas.

“But I am clear that I want to see more enterprising start-ups and greater productivity in a free and fair marketplace, by making sure we take action to break down any barriers that are curbing innovation and entrepreneurship.”

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