Ban non-compete clauses to ‘boost Britain’s fastest growing firms’
Rising hiring costs and difficulties recruiting talent are making it harder for Britain’s most promising companies to grow, with three quarters saying they could create at least 10 per cent more jobs if barriers to expansion were removed.
New research from Enterprise Britain found the cost of employing staff has become one of the main constraints on the UK’s fastest-growing businesses, as the group called on the government to reverse the increase in employers’ National Insurance at next month’s Budget.
Enterprise Britain’s survey of 423 leaders of so-called “super scalers” – companies with at least 50 employees and £5m in turnover which have grown employment or sales by at least 20 per cent a year for the past three years – found 93 per cent still aim to increase headcount over the next 12 months.
Brent Hoberman, co-founder of Lastminute.com and co-chair of Enterprise Britain, said the Budget gave the government a chance to ease the burden on firms looking to expand.
“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”.
Companies also said lengthy notice periods and non-compete clauses were making it harder to bring in experienced workers quickly, adding to skills shortages in fast-growing sectors.
Vacancies fell to 702,000 in the three months to August, the lowest level since early 2021, while the number of payrolled employees fell by 101,000 in the year to July.
Employers currently pay National Insurance at 15 per cent on most employee earnings above £5,000 a year, up from 13.8 per cent before April 2025.
But Enterprise Britain argues there is considerable pent-up appetite to hire among companies growing much faster than the wider economy.
Three in four said they would hire at least 10 per cent more employees than currently planned if the barriers holding them back were removed.
Britain’s biggest job creators
The numbers are significant as a relatively small group of businesses are responsible for a large chunk of Britain’s job creation.
Enterprise Britain identified around 10,000 super scalers which together employ more than five million people and accounted for over 30 per cent of all jobs created between 2020 and 2024, despite representing less than one per cent of UK companies.
Their headcount grew by an average of 46 per cent over the period, while 67 per cent of their operations are outside London and the South East.
Yet the survey also points to frustration among the bosses behind them. Four in 10 told Enterprise Britain they would not choose Britain if they were starting their company again, according to figures shared with City AM.
Some 71 per cent said Britain’s aversion to risk was holding back economic growth.
Alongside hiring costs and access to talent, Enterprise Britain identified shortages of domestic investment and the weight of regulation and bureaucracy as obstacles to further growth.
It wants workers to be able to cut notice periods to one month and non-compete clauses banned, arguing that talent needs to move more quickly between companies.
The group has also called for greater incentives for pension funds to invest in British venture capital and the faster introduction of the government’s Scale-up Concierge service to help growing businesses navigate regulation.