Israel: E1 Zone Expansion

Lindsay Hoyle Excerpts

Wednesday 1st July 2026 Commons Chamber

[Mr Falconer]

I thank my hon. Friend for his attention to these issues, and I know that he recently travelled to the Occupied Palestinian Territories to see it with his own eyes. As I have said many times, I will not comment on sanctions from this Dispatch Box, but I have been clear, and the Prime Minister has led 11 other world leaders in being crystal clear, on the implications and consequences if the E1 settlement continues. He and his colleagues were clear in that statement that there would be implications for the businesses themselves. So far we have had word from the Israeli Government about their plans; clearly, businesses in the region will want to consider carefully the warning in the statement last week and the clear commitment from the Dispatch Box in the UK that we will take further measures if the violent action to increase settlements continues in the west bank.

[Mr Speaker]

I call the shadow Minister.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I will address directly the matter of settlements in a moment, but I want to make a broader point first. Diplomacy is about rolling up our sleeves and putting in the hard yards, not just issuing condemnatory statements. I believe that if the Minister wants to have real sway with the Government of Israel, there has to be meaningful dialogue, but at the moment there is no dialogue between this Labour Government and Israel, despite the obvious importance of the bilateral relationship to Britain across so many domains.

That is because of the decisions that Labour has made—from suspending export licences when Israel was burying murdered hostages to cancelling trade talks and recognising a Palestinian state when hostages were still being held in terrorist captivity. By deliberately keeping relations with Israel in a deep freeze, Labour is cutting off its ability to influence situations on the ground.

None the less, settlement expansion in the west bank is not helpful for achieving the long-term peace that we all want to see. [Interruption.] That has long been my party’s position. We would also like to see Israel use its legal system to bear down on settler violence.

We on the Conservative Benches do support a two-state solution: one that guarantees security and stability for both the Israeli and the Palestinian people. Will the Minister tell us whether he has spoken to his Israeli counterparts directly on the E1 situation? Are the Government doing anything at all to help the Abraham accords expand or to unblock issues holding up a broader regional peace? Finally, will he update us on his assessment of the Palestinian Authority’s plan to hold elections in November and whether he is concerned by the PA’s lack of progress on the total overhaul of curricula and welfare policy, which is so clearly needed?

[Mr Falconer]

I will deal first with the latter points raised by the Opposition spokesman. Yes, we continue to talk to the Palestinian Authority, including on the reform agenda and the need for elections.

It is an undeniable fact that I am the middle east Minister who during my time recognised a Palestinian state, and sanctioned Israeli Ministers who now regularly take to the airwaves to issue in the most bloodthirsty terms encouragement for some of the activity that I am being asked about today. I am afraid that an inevitable consequence of the actions announced from this Dispatch Box is that the warmth of my relationship with my counterparts in Israel has indeed suffered, but this Government will not hesitate to stand up for principles, which I think are supported right across this House.

The right hon. Lady could not have failed to hear the groans from behind her on the Conservative Benches. I know, in recognising a Palestinian state, that I was of course supported by Labour Members behind me, but I think I was also supported by Conservative Members behind her.

[Mr Speaker]

I call the Chair of the Foreign Affairs Committee.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I recently read an interesting letter from the Dutch Foreign Minister to the Speaker of their Parliament. In it, he said that his Government had carefully weighed the efficiency, the effectiveness, the proportionality, the enforceability and the administrative burden of introducing a full trade ban on Israeli goods coming from the illegal settlements in the west bank. He said that, having looked at all of that, the Netherlands had decided that the right thing to do and the legal thing to do was to push for a full trade ban with the settlements—and so has Ireland, and Norway, and Spain, and Slovenia, and Belgium, and Luxembourg, and Portugal, and Finland and Poland. My question is: when are we going to join them?

[Mr Falconer]

I dislike disagreeing with my right hon. Friend. Slovenia introduced and then repealed the measures it took. In our discussions with our counterparts—particularly those in the European Union—we hear of a number of technical difficulties that people are encountering. But let me be clear to the House, as I was in my statement, that I am confirming today that we are in discussions about such measures.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Monica Harding (Esher and Walton) (LD)]

Well, here we are again. The Liberal Democrats have welcomed the Government’s historic decision to recognise the state of Palestine, which we have long called for. We have welcomed more recent statements of intent, including just 10 days ago in this House, but such statements are utterly hollow without action, especially when we know that the Israeli security cabinet’s stated aim is to make a future Palestinian state unviable.

We have asked these questions before, but we will ask them again. When will the Government put forward a clear plan to halt and reverse the illegal expansion into East Jerusalem and the west bank? When will they respond to the 2024 ruling of the International Court of Justice? When will they introduce a package of sanctions including fines for any UK firms that bid for contracts for settlement construction in E1 or anywhere in the Occupied Palestinian Territories? Will they expand that to cover any UK financial institution that finances or facilitates UK companies’ involvement in construction or other services? When will the UK move fast to ban all UK trade in goods and services with illegal Israeli settlements?

[Mr Falconer]

I think that I have already addressed most of those questions. I have just confirmed again, as I did in the statement, that we are in discussions about further measures in relation to west bank goods. We have set out business guidance, and the Foreign Secretary announced the fourth round of sanctions in June.

The hon. Lady referred to speed. I think she will acknowledge that we have moved rather more quickly than some of our partners and allies. I am pleased to see many of them taking some of the measures that I announced in the House in 2025, including sanctions on the Ministers that I mentioned. We are moving with alacrity in response to what we see.

The question at issue in the urgent question is about the E1 settlement expansion. It is rumoured that there is now a timetable for those tenders. I have been as clear as I can be from the Dispatch Box that we are watching very carefully who bids for those tenders. We have been clear repeatedly with the Israeli Government about our view on the E1 expansion; I have repeated it today. The question before us is whether, in the run-up to the Israeli election, commercial entities choose to bid for those tenders. That is what we will be watching carefully and taking action in response to.

[Mr Speaker]

I call the Chair of the International Development Committee.

[Sarah Champion (Rotherham) (Lab)]

It is right that the Government acknowledge that Israel’s presence in Palestine is illegal under international law, but for two years they have not responded to the ICJ’s advisory ruling that Israel’s actions towards Palestinians in the west bank may constitute forcible transfer.

The Israeli Government expressly back the E1 scheme, which will necessarily displace tens of thousands of Palestinians and dissect the west bank. Netanyahu said of the plan:

“We are going to fulfil our promise that there will be no Palestinian state. This place belongs to us.”

The UK’s current situation is unsustainable. Will the Minister acknowledge the Israeli Government’s role in the forcible transfer of Palestinians in the west bank and act accordingly with a full range of diplomatic interventions?