Israeli Settlements: Trade Ban

Debate between Melanie Ward and Gareth Davies

Thursday 9th July 2026 Commons Chamber

[Gareth Davies]

I am very grateful for the hon. Lady’s intervention. I will address the point that she raises later in my speech, but our shared aim across this House, which is peace in the region, cannot be achieved without Britain maintaining an enduring relationship with Israel and with our allies in the region. It is through engagement that we will be able to achieve the resolution we all want. Engagement is vital to achieving the peace that unites the House today.

That is why I regret that, in my view and the view of the official Opposition, Britain’s influence has been diminished to such a degree due to a series of misjudged decisions. These include the decision to cancel trade talks while Hamas were still holding hostages after the 7 October attacks; the decision to impose export licence suspensions while Israel was burying hostages so barbarically taken from their loved ones; and the decision to recognise a Palestinian state when no formal peace process had been agreed. Of course we support a two-state solution, and it is right that we would recognise a Palestinian state, but recognition of a Palestinian state is only meaningful if it is part of a formal peace process. As my shadow ministerial colleagues have pointed out, the Government’s actions to date have left our relations with Israel in a deep freeze, with our ability to influence the situation in the region severely diminished.

[Melanie Ward]

The shadow Minister has been talking about the views of our allies in the region. I wonder when he last met or spoke to our allies across the Arab world, because they have been crying out for many of the actions that our Government have taken. They have been calling on us to act in support of a two-state solution, and to avoid dithering and doing nothing, which is what he is suggesting his party supports.

[Gareth Davies]

The hon. Lady is wrong to suggest that we are saying we should do nothing. If Members remember, it was a Conservative Foreign Secretary in 2024 who imposed sanctions on the settlements. The House has heard me say from this Dispatch Box that the expansion of settlements is wrong. She is being unfair. What I am talking about is a point of execution. We have to engage with our allies—Israel is a critical ally of the United Kingdom—and that is not done by banning trade with Israel.

--- Later in debate ---

[Gareth Davies]

I will make a little progress in the interests of time, because I know that Members will want to hear from the Minister. It is the official Opposition’s view that a proposed ban on the trade of Israeli settlement goods and services will bring about the same result as I have been talking about and will prove counterproductive and ineffective.

Secondly, aside from the ineffectiveness of the policy, it is not even clear that it could be implemented, according to the Labour Government. The Government have repeatedly pointed out, as have many Members today, that a ban on settlement goods would be difficult to enforce. At the Dispatch Box last week, the Minister for the Middle East, the hon. Member for Lincoln (Mr Falconer), said that countries imposing such a ban are encountering “technical difficulties”. Will the Trade Minister address that point when he responds to the debate, and confirm that the Government still hold these concerns about practicality? Labour Members have been questioning that. It is all well and good making a point and arguing for an action, but the Government say that it cannot be executed, and it needs to be explained.

I realise that many anti-Israel campaigners will not be concerned with the answers to these questions that I am posing of the Minister. They may not care whether a ban is effective or having an impact, but only that it should be in place. By the way, I have heard nobody in this debate mention that one in seven medicines dispensed by the NHS comes from Israel. Those who have suggested that we should have an outright ban on Israeli trade have offered no solution to that point. I am sure that the Minister agrees that it is vital that the Government take the full impact of any policy into consideration.

[Melanie Ward]

Will the shadow Minister give way?

[Gareth Davies]

Not right now, and I have already taken an intervention from the hon. Lady.

Finally, and more broadly, we worry that the campaigners ultimately want this ban to become a gateway to a wider ban on trade with Israel. If that is the case, they simply do not accept the importance of the relationship that we have with Israel. On trade and the economy, Israel is a technology and health superpower, with the UK-Israel trading relationship worth £6 billion. When the last Government launched bilateral trade talks in 2022, we estimated that the reduction in trade barriers could benefit almost 7,000 UK businesses in all Labour Members’ constituencies, including 5,600 SMEs employing 1.7 million people. I would be grateful if the Minister updated the House on the status of the trade agreement discussions. [Interruption.]

I see that you are asking me to conclude, Madam Deputy Speaker. We firmly believe that the proposed trade embargo would have no practical effect whatever on the situation in the region. We are concerned that it is part of a broader push by Israel’s opponents to isolate the Jewish state politically and economically. The ban would be legally and administratively complex, it would have limited economic effect, and it would hinder diplomatic efforts to find a sustainable, long-term peace agreement between Israel and the Palestinians. No matter what Members might say or shout, the ban would not bring about peace in the middle east. We have already seen Britain’s voice marginalised and Britain’s ability to influence Israel diminished. To go further down this path would not serve British, Israeli or Palestinian interests at all, so we cannot support the proposed ban.