UK to ban trade with illegal Israeli settlements as US ambassador warns of fallout

Britain's new foreign secretary, Ed Miliband, is due to tell MPs on Tuesday that the government will ban trade with illegal Israeli settlements in the West Bank. The move is seen as a significant shift from Prime Minister Andy Burnham's government, which had largely continued predecessor Keir Starmer's cautious approach to the issue.

Miliband is expected to argue that action is needed now to prevent the prospect of a two-state solution being permanently derailed, as Benjamin Netanyahu's government pushes ahead with settlement expansion on Palestinian land. The announcement comes a day after Labour triggered a byelection in Holborn and St Pancras, a previously safe seat now under threat from the pro-Palestinian Green party.

Speaking to the BBC's Today programme on Tuesday morning, US ambassador to Israel Mike Huckabee warned the policy could harm British interests. He said 25% of pharmaceuticals used in the UK are made in Israel, questioning whether Britain was prepared to lose access to them. Huckabee also pointed to a Florida law that could bar British firms from doing business with companies in the state if the ban goes ahead, though he said the full scope of possible US retaliation had not yet been announced.

Conservative shadow home secretary Chris Philp dismissed the move as "performative posturing," arguing it would be difficult in practice to distinguish West Bank goods from other Israeli products and could damage security cooperation with Israel. He nonetheless said the Conservatives oppose settlement construction on Palestinian land in principle.

Labour MP Peter Prinsley, vice chair of Labour Friends of Israel, warned the ban could increase risks to British Jews, saying opponents of Israel often fail to distinguish government policy from the wider Jewish community. He also criticised the timing, noting the announcement comes weeks before Israel's election on 27 October.