Firms hurt by BDS could take authorities to court, says Steve Reed, Secretary of State for Housing, Communities and Local Government
January 4, 2026 11:29
Local authorities that support the “boycott, divestment and sanctions” (BDS) movement could face legal action from affected companies, the communities secretary has warned.
Several Labour-run councils have voted to block Israeli or Israel-linked companies. The Secretary of State for Housing, Communities and Local Government, Steve Reed, has told councils they risk being sued by companies that lose money as a result of boycotts, and warned that authorities could be forced to pay damages.
“Councils should stay out of foreign conflicts and get on with the job of delivering local services,” Reed said, according to the Telegraph on Saturday.
The government has published guidance prohibiting boycotts against Israeli firms and has said companies would be able to sue councils under the Procurement Act 2023.
The prime minister has previously said the government opposes moves by local authorities to snub firms connected to Israel.
However, several Labour-run councils have passed motions in support of the BDS movement.
According to the Telegraph, councils including Islington, Lewisham, Wandsworth and Caerphilly have backed motions to divest from Israel-linked companies in response to demands by pro-Palestine activists.
Councils have voted to block companies they say are “complicit in Israeli war crimes”, supply arms to the Jewish state or benefit from the country’s occupation of Palestinian territory.
Before the last election, the Conservatives proposed legislation to ban local councils from boycotting Israeli goods.
The bill would have forbidden all public bodies from imposing their own boycott or divestment campaigns against foreign countries and territories.
The then communities secretary, Michael Gove, warned that boycotts of Israeli goods lead to “appalling antisemitic rhetoric and abuse”, as he prepared legislation preventing councils from conducting their own “foreign policy”.
The Labour government abandoned the proposed law.
At the time, Labour’s deputy leader Angela Rayner said that while her party “completely opposes a policy of boycott, divestment and sanctions against Israel”, it believed the bill was “deeply flawed”.
Shadow communities secretary Sir James Cleverly has accused the government of “turning a blind eye” to antisemitism at a local level by refusing to ban councils from boycotts.
“Labour councils are bringing in Israel boycotts in a cynical, sectarian attempt to win votes. Those boycotts are frequently a cover for attacking Jewish people and culture.
“Keir Starmer pledged to eradicate anti-Jewish hate from his party – but it clearly persists at the local level. He must act to bring his councillors under control. It is not the job of local government to set UK foreign policy,” Cleverly told the Telegraph.
Starmer has repeatedly spoken against BDS. Addressing Labour Friends of Israel in 2021, he said Labour “does not and will not support BDS”. He called the policy “counterproductive” and “wrong”, and damaging to the prospects of peace.
In May last year, Alex Norris, the former communities minister, reiterated this stance.
“The UK Government is committed to promoting our trade and business ties with Israel and strongly opposes boycotts,” he said, adding that the government had published “guidance to public authorities prohibiting procurement boycotts against Israeli firms and firms which trade with Israel”.
But he added that the government would not monitor council's over the matter.
“It is not government’s business to monitor the number of debates or motions on any matter provided councils are compliant with the law.”
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