Israel: Trade

Lord Leigh of Hurley Excerpts

Thursday 8th January 2026 Grand Committee

[Lord Leigh of Hurley (Con)]

I congratulate the noble Lord, Lord Austin, on securing this debate and his excellent opening speech. I thank His Excellency Simon Walters, our man in Tel Aviv, and the Israeli embassy in London for its assistance in my comments.

As has been said, trade with Israel is strong, and the UK is the net beneficiary of that. Israel climbed to be in the top eight of European countries investing in FDI in the UK. Israel brings tested solutions in counterterrorism, emergency response, infrastructure protection and crisis management, and not just that but a huge social and political impact through trade. Trade with Israel supports thousands of UK jobs. Israel’s defence companies have UK subsidiaries, which manufacture here and provide income for hundreds of families.

Trade is such a huge topic that I will have to focus on a few areas. The first is defence. Nowhere has the UK benefited more from its relationship with Israel than in defence. Israel is the third-largest supplier of arms to the UK, and the contribution from Israel’s cyber companies has been enormous, which helps keep us all safe. The UK Government’s growth plans are all in areas where Israel can contribute and has globally recognised expertise. Of course, the third-largest concentration of AI start-ups in the world is in Israel.

In my opinion the UK is very unprepared for AI-driven drone warfare, but Israel has anticipated that future and we need to try to benefit from those skills. Unfortunately, banning arms sales to Israel has been extremely unhelpful at this time and now needs to be reversed, as does the ludicrous decision to ban Israeli defence officials from the Royal College of Defence Studies and then to ban Israel defence firms from a major London arms fair. The Royal College of Defence Studies has long accepted students from countries with dire human rights records, yet only Israel has been subject to blanket exclusion.

That takes me to my second theme: the hugely disappointing approach sometimes taken by UK Governments. As we know, the Labour Party talked out the BDS—boycott, divestment and sanctions—Bill, which was very important to UK-Israel relations. As I understand it—I am happy to be corrected—they have no intention to bring it back. Boycotts create a chilling effect: they deter investment, research and partnership far beyond their formal scope, and in fact, they nurture violence, extremism and antisemitism. The attempt to normalise the delegitimisation of Israel is pure antisemitism undertaken by bad actors with dangerous motives. It needs to be challenged rigorously at every opportunity.

Under this Government’s watch, unfortunately, Israeli factories in the UK have been invaded and huge damage has been done to equipment, as recently as last month, in Edinburgh. But, more importantly, these horrific and violent actions unsettle the UK staff employed at these crucial defence businesses, and they greatly discourage Israeli academics and professionals from coming here. I was in Israel last week with Conservative Friends of Israel, and people were all asking me, “What’s going on in the UK? Is it a safe place for me to go to?” That would have been unimaginable a few years ago.

The curtailment of the negotiations of a trade treaty in May 2025 was a disgrace. If the Minister cannot apologise for those decisions—because they happened well before his time in office—at the very least it would be good to hear from him when they will be reversed. Can he please tell us exactly what the trade policy is now in respect of Israel? Can he spell it out, please, as clearly as is possible? We want to hear from him, very loudly, that the UK is proud to be Israel’s supplier, customer, partner, ally and collaborator in many fields—including, for the purpose of this most welcome debate, trade.

--- Later in debate ---

[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.