Government signals Israel trade talks will resume after phase two of Gaza ceasefire

During the debate, brought by non-affiliated peer – and JC director – Lord Austin, the practical importance of ties between Israel and the UK were highlighted.

Austin, who is also the government’s trade envoy to Israel, told peers: “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.”

As well as highlighting defence and tech partnerships between the two countries, Austin urged the government to enhance ties between London and Jerusalem.

“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”, the former Labour MP added.

Responding for the government, Stockwood opened his remarks by saying that he was “a huge advocate and admirer” of Israel’s tech sector in particular.

Stockwood – who before entering government in September last year held leadership and board roles at outfits including Match.com, Skyscanner, and lastminute.com; as well as being co-owner and former Chair of Grimsby Town Football Club – described Israel as “without doubt a vibrant, dynamic democracy and a fast-growing economy”.

He added that the government would be retaining Lord Austin’s services as a trade envoy “to maintain our relationships with Israeli businesses and attract inward investment in key sectors of the industrial strategy.”

The minister continued: “Reflecting our shared heritage as tech-savvy and innovative entrepreneurs, more Israeli tech companies operate in the UK than anywhere else in Europe… Co-operation between our nations is extensive, particularly in the sphere of scientific research and development. British and Israeli scientists collaborate on research and development projects, resulting in new products, industrial processes and services.”

However, Stockwood defended the government’s decision to freeze trade talks last year, saying: “We took the decision to pause negotiations on an enhanced trade free trade agreement in May this year in response to the Israeli Government’s rhetoric and actions in Gaza and the West Bank. Since that announcement, we have been, and continue to be, clear that we would need to see sustained change in the Israeli Government’s position before we could resume trade negotiations”.

He also reiterated the government’s opposition to moves to boycott Israel, telling peers that: “On the issue of BDS, I say to the many noble Lords who raised it today that the UK Government are committed to promoting our trade and business ties with Israel and strongly oppose boycotts.”

The move was welcomed by Keith Black, chair of the Jewish Leadership Council, who said: "A strong economic and strategic relationship with Israel delivers real benefits for the British economy and supports our partnership with a key democratic ally. Despite a minority seeking to sow divisions between communities here in the UK through boycotts, trade with Israel increased last year. Restarting free trade negotiations will not only help the government boost the economy, it will also send a clear message against those who continue to push for pernicious boycotts."

Lord Leigh took the slightly unusual step of probing the minister for an answer after he had concluded his speech. He told the JC that this was because he wanted to get a firm answer out of the government.

Although he was complimentary of Stockwood, Leigh said he suspected the influence of the Foreign Office on the content of the speech and lamented the deterioration of UK-Israel relations.

“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”, he added.

While Leigh broadly welcomed the intention restart trade talks with Israel, the Conservative peer said: “The point that needs to be made is that is that this means that the restarting the trade talks has to wait for Hamas to lay down its arms, as far as I can see. And that doesn't seem right”.

The government’s decision to freeze trade talks, while pursuing a trade agreement with Gulf Cooperation Council (GCC) countries – including Qatar, Saudi Arabia, Bahrain and the UK – despite the fact that Labour had criticised some of their records on human rights in opposition, saw accusations of hypocrisy levelled at them.

Reform UK’s deputy leader Richard Tice told the JC at the time: “Two-tier Keir is pursuing two-tier trade policy. We should be accelerating an Israeli trade deal not stopping it.”

One Labour source also said that they couldn’t understand “how we've got ourselves into the insane position where we're pursuing trade deals with Gulf dictators but not the region's only liberal democracy”.

“The Jewish state is being singled out, and that's not something the UK should ever do”, they added.