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Government to review rules that 'stifle' entrepreneurship

25 Apr 2016

The Government has announced plans to investigate red tape that it claims may be ‘stifling’ small businesses and entrepreneurship.

Business Secretary Sajid Javid is due to launch a call for evidence on the rules surrounding so-called ‘non-complete clauses’, which prevent individuals from competing against their former employer.

The clauses can currently be written into an employee’s contract for a set period of time, sometimes up to nine months. The clause may then be enforced by a court of law if it is found to protect a ‘legitimate interest’ and is ‘reasonable’.

However, the Government said it believes these rules could be hampering innovation by preventing employees from starting up their own business. Some critics have also warned that the clauses could hinder businesses from hiring the best people.

Commenting, Mr 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.’

Businesses are also being invited to take part in an ‘Innovation Survey’ to share their views on how the UK can improve its innovation framework. Further information can be found here.

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