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Andy Burnham’s plan to impose tougher sanctions on Israeli settlements in the occupied West Bank risks becoming “a de facto boycott of all of Israel”, a group of Labour MPs and peers has warned.

The Times reported the PM wants to take a more “robust” approach when dealing with Israel than his predecessor, Keir Starmer, with a senior government source saying he is expected to approve plans for a trade ban and the sanctioning of individuals involved in settlement activity.

It comes after the Foreign Secretary, Ed Miliband, said Israeli plans to open tenders for the controversial E1 settlement east of Jerusalem would effectively cut the West Bank in two and destroy any hope of a two-state solution.

Having already pledged sanctions against Benjamin Netanyahu’s government over plans to build thousands of new settlement homes, a trade embargo would “risk further harming relations, which have already deteriorated” since Burnham took office, The Telegraph’s senior political correspondent Dominic Penna said.

UK officials warn that a ban would bring “significant practical difficulties”, The Times reported. “Distinguishing between goods from the settlements and goods from Israel would be challenging” while a ban on services would be “impractical”. There is a risk that “legitimate” Israeli businesses “would be hit by the ban” which risks “undermining trade with Israel more broadly”. There are also concerns Palestinian businesses in occupied territories could be hit by the sanctions.

That may be true, but having apologised for Labour’s response to Gaza, Burnham “must ban settlement trade” to show he “meant it”, said Ismail Patel in Middle East Eye.

Unlike Ireland, which outlawed settlement imports in late July, Britain merely labels settlement goods, “a policy that acknowledges they come from stolen land while inviting shoppers to buy them anyway”.

According to The House of Commons Library, UK trade with the occupied Palestinian territories was worth around £38m in 2025, compared with total UK trade of around £1.95 trillion.

The UK, by contrast, is a “tremendously important” trading partner for Israel, said Jo-Ann Mort in Prospect, meaning if the British government really wanted to intervene, “it has weight” and “leverage available”.

What next?

Around a third of Labour MPs have signed a letter calling for a ban on trade with illegal Israeli settlements, with supporters also preparing a motion at Labour’s annual conference next month.

The PM is expected to set out steps to introduce a trade embargo before then “as he looks to avoid the issue overshadowing his first party conference as leader”, said the Daily Mail.

But the move still risks splitting the party.

Labour Friends of Israel, which includes senior Labour MPs and peers, said it “strongly opposes” the Israeli settlements and supported “calibrated steps against extremist settlers and extremist settler groups”. But, it added, “a boycott of trade with settlements is practically impossible and will become a de facto boycott of all of Israel, which would be deeply damaging to the UK national interest, the British Jewish community and Palestinian workers”.