Government announces investigation into “stifling” employment rules

Sajid Javid has pledged to make UK the best place in Europe to innovate and start a business "by breaking down barriers to entrepreneurship"

Business secretary Sajid Javid has announced that the government will be investigating current employment rules that could be “stifling” innovation and preventing budding entrepreneurs from starting up their own business after leaving a job.

As part of its investigation, Javid has said the first step will be asking businesses and entrepreneurs for their views on ‘non-compete clauses’- legislation which can stop someone from setting up a business that competes with their former employer or stop them working for a rival for up to nine months after leaving.

While such clauses are enforceable in a court of law, some critics have suggested that they can act as a barrier to innovation and employment by preventing start-ups from recruiting top talent.

The second step will be to introduce an innovation plan that will establish how the government can make the UK the best place in Europe to start a business. This will involve looking into how better regulation can drive innovation, how to direct spending to support new business, and canvasing companies’ opinions on how the government can work with them to create new opportunities in an online survey.

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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