Ban Non Compete Clauses to Boost UK Super Scalers, Enterprise Britain Urges

Ban non compete clauses to support Britain's fastest growing businesses, Enterprise Britain urges

Rising employment costs and recruitment hurdles are restricting growth among the most promising businesses in the UK, with three quarters stating they could expand their workforce by at least 10 per cent if operational obstacles were lifted.

Research from Enterprise Britain indicates that the cost of hiring has emerged as a major barrier for rapidly expanding companies. The advocacy group is urging the government to reverse the increase in employers National Insurance at the upcoming Budget.

A survey of 423 leaders at super scalers, defined as businesses with at least 50 staff and 5 million pounds in turnover that have expanded headcount or revenue by 20 per cent annually for three consecutive years, revealed that 93 per cent still plan to recruit over the next year.

Brent Hoberman, co founder of Lastminute.com and co chair of Enterprise Britain, said the Budget offers ministers a clear chance to relieve pressure on growing firms.

"The Autumn Budget provides Andy Burnham’s government with a golden opportunity to back Britain’s super scalers, accelerate job creation, and spread prosperity more widely", he said. "It is critical that we don’t miss this moment".

Executives highlighted extended notice periods and non compete clauses as key impediments to hiring experienced staff promptly, compounding skills shortages across high growth sectors.

Official figures show overall job vacancies fell to 702,000 in the three months to August, reaching the lowest point since early 2021, while payrolled employee numbers dropped by 101,000 in the year to July.

Employers currently pay National Insurance contributions at 15 per cent on most earnings above 5,000 pounds per year, following an increase from 13.8 per cent prior to April 2025.

Enterprise Britain maintains that high growth businesses retain substantial hiring intent despite broader economic headwinds. Three out of four surveyed businesses indicated they would increase their planned hiring by 10 per cent or more if growth constraints were removed.

Essential contributors to national employment

The economic contribution of these businesses remains substantial relative to their numbers. Enterprise Britain identified roughly 10,000 super scalers across the UK. Together they employ more than five million people and accounted for over 30 per cent of all new jobs generated between 2020 and 2024, despite representing under one per cent of total UK companies.

Average headcount across these firms expanded by 46 per cent during that timeframe, with 67 per cent of their operations located outside London and the South East.

However, survey findings reveal growing dissatisfaction among business leaders. Four in ten founders informed Enterprise Britain that they would not choose the UK as their starting location if they were launching their business today, according to data shared with City AM.

In addition, 71 per cent felt that a prevailing risk aversion across the UK economy continues to restrain growth.

Beside employment costs and recruitment difficulties, Enterprise Britain cited limited domestic investment capital alongside regulatory burdens as ongoing growth barriers.

To address these challenges, the group advocates restricting notice periods to a maximum of one month and outlawing non compete agreements to enable smoother talent movement between firms.

Additional recommendations include implementing stronger incentives for domestic pension funds to invest in British venture capital, alongside accelerating the rollout of the government Scale up Concierge service to help expanding businesses manage regulatory requirements.

Source: City A.M.