I had a similar situation not that long ago. I'm not very knowledgable about employment law but looked into it to see if I could be caught. It's harder to see I think if personal circusmtances as you don't always see the situation quote so logically.
It does depend on the circumstances and whether the ex employer has any interest in forcing the clause (restrictive covenant/restraint of trade clause) and it would be worth their while. It can't be unreasonably wide but that can differ with the context of the industry - I'd say totally open ended "similar business" might be pushing it!
An example I've heard quoted is of it being more reasonable for restricting a rural hairdresser for a certain mile radius in the locality than say a city lawyer or accountant in a city centre.
Clauses have to be reasonable (again, depends on the circumstances).
Enforcing a covenant can be expensive so it would have to be worth the ex employer trying. How much risk is there of you being any kind of threat of competition or you current firm losing work to you?
Does it say anything about advising the former company/new company?
As you were made redundant, did you have any kind of compromise agreement - negotiated terms of your redundancy? If so did you get any advice and was anything dealt with about this term? At least (in terms of argument) they let you go so it's not like you left them intending to take a load of business with you.