Israel: Trade

Earl of Courtown Excerpts

Thursday 8th January 2026 Grand Committee

[The Earl of Courtown (Con)]

My Lords, I thank the noble Lord, Lord Austin, for introducing this really interesting debate. He ranged into a whole lot of different areas and pinpointed some of the great pieces of trade between our two countries.

His Majesty’s loyal Opposition are clear that trade with Israel is a positive thing, as we have all stated, and that we should be consolidating ties with our closest ally in the region and looking to expand them into the future. We should not, as the Government are intent on doing, be closing channels and limiting agreements based on moral posturing rather than the empirical reality.

The last Government understood this. That is why we signed a trade continuity agreement with Israel that commenced upon our exiting of the European Union. We knew that close links contribute to our countries’ prosperity, which is why we relaunched negotiations for a new deal in 2022. As a result, Israel stands as a growing contributor to our economy. In the four quarters leading up to Q2 2025, total trade between the two countries, as mentioned by noble Lords, amounted to £6.2 billion, £3.6 billion of which came from Israel buying British goods and services—up more than 10% on the year.

Israel is a vital trade partner to the United Kingdom. The former Trade Minister in the other place, Douglas Alexander, noted that one in eight of the prescribed drugs available through the NHS is provided by an Israeli company—it was really interesting to hear from the noble Lord, Lord Stevens of Birmingham, a bit more detail on the different drugs being imported to this country. Yet that is despite rather than because of the Government’s best efforts. They have cut trade, amended policy to specifically exclude Israel from arms programmes, and have most recently suspended the free trade agreement negotiations that the Conservatives started.

What is particularly damaging is that these suspended negotiations had the aim of expanding trade to financial services and digital trade—our biggest sectors. Services comprise about 80% of Israel and the United Kingdom’s economies. Telecommunications and IT services trade with Israel surged by over 40% last year, and yet services make up just over a third of the total trade between our two countries. Renewed trade negotiations and a renewed trade deal would galvanise the service sectors of both economies. They would drive competition, promote innovation and stimulate growth. The Government are missing the opportunity, through their adherence to a vindictive and, I am afraid, misguided policy. I hope the Minister will reconsider the position his Government currently hold and I look forward to hearing his response.