Israel: Trade

Lord Austin of Dudley Excerpts

Thursday 8th January 2026 Grand Committee

Asked by

[Lord Austin of Dudley]

To ask His Majesty’s Government what assessment they have made of the contribution that trade with Israel makes to the United Kingdom economy.

[Lord Austin of Dudley (Non-Afl)]

My Lords, I draw attention to my role as the UK’s trade envoy to Israel.

I start by welcoming the Minister and thank all noble Lords—especially the noble Baroness—who are here to discuss the contribution that trade with Israel makes to the UK, the businesses it supports, the jobs it creates and how many thousands of people are better off as a result of trade with our closest ally in the Middle East. The argument I want to make is that increasing trade with and attracting investment from Israel will help the Government achieve their most important objectives by improving growth and delivering their industrial strategy.

I pay tribute to the brilliant team at our embassy in Tel Aviv, led by His Majesty’s Ambassador Simon Walters CMG, the Trade Director Debbie Shapiro and all their colleagues, who work so hard to encourage British companies to export to Israel and Israelis to invest here in the UK. I am sure that the Minister will join me in thanking the officials in his department who promote trade with Israel and support my work in the trade envoy team.

Before the conflict, trade between Israel and the UK was at an all-time high—and our relationship stronger than ever before—in trade and investment, technology and innovation, defence and security, and health and education. Over the past five years, more than 300 Israeli companies have expanded into the UK, generating 4,000 jobs and almost £1 billion in investment. Israeli investment created 871 jobs and contributed £173 million to the UK economy in the last year alone, as trade increased again, despite the Gaza war and campaigns to boycott Israel.

Official figures from the Department for Business and Trade showed that total trade amounted to £6.2 billion in the year to June last year. This represented a 3.2%—or £218 million—increase driven by a surge of financial services exports to Israel. Given the overall balance of UK trade around the world, it is particularly important to note that more than half of the trade with Israel is in British exports, which accounted for much of that, increasing by 10.5%. We export clothes and cars, power generators and aircraft engines, medical equipment, scientific instruments and pharmaceutical products—and Scotch whisky exports are up 300%.

I am sure that the Minister will join me in welcoming that increase, and so will he set out the UK’s current trade policy with Israel and what more the Government are doing to encourage exports to and investment from Israel? Does he have any plans to visit Israel to see all this at first hand, to meet UK companies working there, to encourage exports and to encourage Israelis to invest here?

Israel supplies one in seven NHS prescriptions, which save the health service nearly £3 billion every year. It is a global leader in digital health, biotech and medical innovation, delivering cutting-edge breakthroughs in early cancer detection, gene editing, Alzheimer’s research and cardiovascular treatment. The UK-Israel Health-Tech Academy was launched in 2024 by the UK-Israel Tech Hub, which is based in our embassy in Tel Aviv, to bring Israeli health breakthroughs to benefit UK patients. Supported by the Dangoor Education foundation, the academy educates cutting-edge start-ups in Israel on the UK healthcare system and enables medical technology trials with NHS partners. The result of that is Israeli start-ups conducting research and spending R&D capital with the NHS to enable patients in the UK to benefit from ground-breaking Israeli healthcare developments and technologies.

Established by the British Council, our embassy and the Pears Foundation, BIRAX—the Britain Israel Research and Academic Exchange—is the flagship UK-Israel research partnership, which has invested £15 million in 32 collaborative projects to tackle huge challenges such as debilitating diseases, regenerative medicine and healthy ageing. Led by Ravit Capauner, it funds university partnerships to bring academic researchers in Israel and the UK together to strengthen innovation and scientific research. It uses cutting-edge technologies in AI, big data, life sciences and personalised medicine to tackle NHS priorities in dementia, multimorbidity, women’s health and mental health, to help people live longer, healthier and more independent lives. It contributes to economic growth in the UK by creating hundreds of jobs in scientific research and leveraging other funding to generate much greater economic benefits for the UK.

Israel is also a key defence and security partner. It is the third-largest supplier of arms to the UK, and Israeli military equipment has saved the lives of British forces in combat zones. Its technology provides crucial support for the Armed Forces, and Israeli intelligence has helped prevent terror attacks here in Britain.

It is obvious, in the face of Putin’s aggression, that we need to strengthen Britain’s air and cyber defences, and we are using Israel’s expertise in cyber security for that. So, I ask the Minister whether he will welcome Israeli defence investment in the UK, which has seen Israeli firms set up UK subsidiaries and establish joint ventures with UK defence companies, which provide good, highly skilled and well-paid jobs, as well as supporting our Armed Forces and the UK’s defences.

It is absolutely clear that the partnership between our two countries matters across so many sectors already, but there are huge opportunities in areas such as financial services, infrastructure, life sciences, AI and cyber security for the future.

The current trade agreement is 30 years old. It ensures tariff-free trade on 99% of goods but it predates even the invention of the internet, Israel’s emergence as a tech superpower, the growth of financial services here in the UK and the climate crisis. Given that services now count for 80% of both our economies’ activities, there is obviously great potential in digital trade, innovation, services, low-carbon and environmental technologies.

The UK’s new industrial strategy focuses on eight high-potential sectors, including clean energy, advanced manufacturing, defence, financial services, business, digital, technology and so on. These are all fields where Israeli innovation is recognised globally. This means that closer collaboration with Israel can help to meet our industrial strategy goals faster.

Can I draw to the Minister’s attention two initiatives launched by our embassy in Tel Aviv? First, Ambassador Walters and trade director Shapiro have launched ScaIL UK to accelerate the expansion of high-growth Israeli tech companies aligned with our industrial strategy into the United Kingdom.

Secondly, the work of the UK-Israel Tech Hub, which is led by Keren Shurkin, has brokered over 300 high-impact tech partnerships, which boost productivity and deliver sustainable economic growth. These partnerships have led to a growth of Israeli-founded unicorns in Britain and venture capital being invested in UK innovation, and they have improved the quality of life for stroke patients, reduced waste at our supermarkets and saved bank accounts millions in reducing fraud losses. Israel boasts the highest start-up density in the world, and the UK-Israel Tech Hub links this dynamism with our industrial strategy by engaging venture capital, entrepreneurs and accelerators that bring their skills, talent, capital and technology to the UK.

Israel is number three in the world for start-ups. Its economy is not just recovering from 7 October but rising stronger. London is the best city in Europe for start-ups, second only to New York globally. We have more tech unicorns than any city in Europe, so what greater partner could there be for the start-up nation than the UK?

In conclusion, the reason all this works is pretty straightforward: the longstanding partnership between two great countries. We are like-minded partners with shared values, free societies and open democracies. We are liberal countries which value the contribution of every citizen regardless of background or gender. We are two countries focused on trade and innovation, working together to create jobs, boost prosperity, improve defence and security, and tackle the world’s biggest challenges. This is the truth about our relationship with Israel. We should celebrate that success and do all we can to bring our two countries closer together.