The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I am pleased to respond to this Question for Short Debate. I start by saying that I have visited Israel on many occasions over the years, both for personal and business reasons. Some visits started many years ago, as mentioned by the noble Lord, Lord Livingston. I still have a number of friends who live in the country, and in particular, as someone who has spent decades as an entrepreneur, I am a huge advocate and admirer of its tech sector, which many noble Lords mentioned in the debate.
Israel is without doubt a vibrant, dynamic democracy and a fast-growing economy. While this Government have consistently made our concerns with the conduct of the Israeli Government known, Israel remains a trading partner that plays a significant role in the UK’s economy, with business and personal ties that we continue to value greatly. The UK is committed to our existing trading relationship, and we retain the services of the noble Lord, Lord Austin, our trade envoy, to maintain our relationships with Israeli businesses and attract inward investment in key sectors of the industrial strategy. I express my personal thanks to him for bringing this debate to the Committee today and echo his comments about the British Embassy in Tel Aviv and His Majesty’s Ambassador Simon Walters, who provided me with some helpful advice in our meeting in December.
Israel’s innovative, high-tech economy is well aligned with our own, providing an avenue for critical imports in key sectors mentioned, such as healthcare, medicines for respiratory care, neurology, oncology and pain management to support the treatment of chronic and high-burden diseases. Our economies are highly complementary, with clear parallels in services, technology and advanced manufacturing sectors. We have seen Israeli firms expand in the UK across strategic sectors such as cyber security, climate and energy, fintech and the automotive sector. These all fit neatly into our industrial strategy, as mentioned, and our trade strategy, and as such support our economic growth as a nation. Trade with Israel supports thousands of jobs across the UK. This is especially true across the north and the Midlands, which benefit from Israeli investment, and firms in the advanced manufacturing sectors.
Reflecting our shared heritage as tech-savvy and innovative entrepreneurs, more Israeli tech companies operate in the UK than anywhere else in Europe, as was mentioned by the noble Lord, Lord Austin. Co-operation between our nations is extensive, particularly in the sphere of scientific research and development. British and Israeli scientists collaborate on research and development projects, resulting in new products, industrial processes and services. This has led, for example, to the Leeds-Israel Innovation Healthtech Gateway, a collaborative initiative designed to strengthen ties between the UK and Israel in the health sector.
We continue to build on these relationships, including, as mentioned by the noble Lord, through the recently launched ScaIL UK initiative, a first of its kind programme led by DBT and the British Embassy in Tel Aviv. It is designed to help scale-ups establish a strong UK presence by unlocking opportunities in the aforementioned eight priority sectors of the UK industrial strategy, from advanced manufacturing and clean energy to digital technology and life sciences. As a result, these selected high-growth companies will gain practical insights, strategic guidance and direct connections to drive physical expansion, job creation and impactful commercial activity in the whole UK market.
All this is supported under our current trade agreement with Israel. The UK-Israel Trade and Partnership Agreement rolled over, post Brexit, from the 1995 EU-Israel Association Agreement. Accordingly, in line with our European friends and partners, the UK-Israel TPA does not grant preferences to goods from illegal Israeli settlements. Furthermore, we neither support nor condone commercial or financial activity undertaken by British businesses with entities in these illegal settlements. Government guidance is absolutely clear that trading with these settlements brings significant risk and that businesses should seek legal advice before undertaking such activity.
It remains this Government’s firm belief, as set out in the trade strategy last year, that more trade with dynamic and fast-growing partners will generate economic growth in the UK, supporting British jobs and providing the prosperity we need and everything that is foundational to this Government’s growth mission. However, we have also been clear that an enhanced trading relationship with Israel cannot come at any cost. That is why, as the Committee will be aware, we took the decision to pause negotiations on an enhanced trade free trade agreement in May this year in response to the Israeli Government’s rhetoric and actions in Gaza and the West Bank. Since that announcement, we have been, and continue to be, clear that we would need to see sustained change in the Israeli Government’s position before we could resume trade negotiations—and to answer the question from the noble Lord, Lord Stevens, that extends to the RCDS courses.
However, we welcome the moment of significantly profound relief and hope that the ceasefire agreed early this year, after two years of devastating suffering, has brought to all. This Government will continue to do all we can to support an enduring ceasefire, and the UK will continue to play our part in supporting not just the implementation of phase 1 of the peace initiative but the crucial work going forward now in phase 2. In line with this, we will continue to monitor the situation in Israel and Palestine and work to support long-term peace and stability in the region. The UK clearly believes that a two-state solution is the only path to justice for Palestinians and enduring security for Israelis. A two-state solution, with a safe and secure Israel alongside a viable and sovereign Palestinian state, is the only path to lasting peace for the Israeli and Palestinian peoples.
Before I conclude, I would like to take the opportunity to address some of the outstanding topics raised by noble Lords during the debate that I have not yet referred to. Several noble Lords raised the issue of antisemitism. Let me be really clear on this: the UK Government are absolutely committed to combating antisemitism in the UK and globally. We will not tolerate antisemitism on our streets.
On the issue of BDS, I say to the many noble Lords who raised it today that the UK Government are committed to promoting our trade and business ties with Israel and strongly oppose boycotts.
We will continue to monitor the situation in Israel and Palestine and work to support long-term peace and stability in the region. If it remains the case, in the long term, the UK and Israeli economies are strongly compatible, with plenty of significant opportunities for our businesses. To that end, we will continue to support and encourage the business-to-business and people-to-people connections that underpin any successful trading relationship and maintain our frank and open dialogue with the Israeli Government, which is important between trading partners.
Lord Leigh of Hurley (Con)
Can the Minister say exactly what he wants to see, further than a ceasefire, to restart the trade talks?
Lord Stockwood (Lab)
We are waiting to see phase 2 of the ceasefire put in place. At that point, the dialogue can continue.