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The House of Lords is scheduled to consider the following question for short debate on 8 January 2026:

Lord Austin of Dudley (non-affiliated) to ask His Majesty’s Government what assessment they have made of the contribution that trade with Israel makes to the United Kingdom economy.

Lord Austin is the UK’s trade envoy to Israel.[1]

1. UK-Israel trade statistics

The Department for Business and Trade published its latest statistical release on trade and investment between the UK and Israel on 17 December 2025.[2] It noted:

Total trade in goods and services (exports plus imports) between the UK and Israel was £6.2bn in the four quarters to the end of Q2 2025, an increase of 3.7% or £218mn in current prices from the four quarters to the end of Q2 2024.

In the four quarters to the end of Q2 2025, total UK exports to Israel amounted to £3.6bn (an increase of 10.5% or £342mn in current prices, compared to the four quarters to the end of Q2 2024).

Of all UK exports to Israel in the four quarters to the end of Q2 2025, £1.7bn (46.9%) were goods and £1.9bn (53.1%) were services. In the four quarters to the end of Q2 2025, UK exports of goods to Israel increased by 4.4% or £71mn in current prices, compared to the four quarters to the end of Q2 2024 while UK exports of services to Israel increased by 16.5% or £271mn in current prices, compared to the four quarters to the end of Q2 2024.

In the four quarters to the end of Q2 2025, total UK imports from Israel were £2.6bn (a decrease of 4.6% or £124mn in current prices, compared to the four quarters to the end of Q2 2024).

Of all UK imports from Israel in the four quarters to the end of Q2 2025, £1.2bn (48.3%) were goods and £1.3bn (51.7%) were services. In the same period, UK imports of goods from Israel decreased by 17.6% or £264mn in current prices, compared to the four quarters to the end of Q2 2024 while UK imports of services from Israel increased by 11.8% or £140mn in current prices, compared to the four quarters to the end of Q2 2024.

This means the UK reported a total trade surplus of £1.0bn with Israel, compared to a trade surplus of £573mn in the four quarters to the end of Q2 2024. In the four quarters to the end of Q2 2025, the UK had a trade in goods surplus of £452mn with Israel, compared to a trade in goods surplus of £117mn in the four quarters to the end of Q2 2024. Meanwhile, in the four quarters to the end of Q2 2025 the UK reported a trade in services surplus of £587mn with Israel, compared to a trade in services surplus of £456mn in the four quarters to the end of Q2 2024.[3]

The release further noted Israel was the UK’s 42nd largest trading partner in the four quarters to the end of Q2 2025, accounting for 0.3% of total UK trade.[4] Israel was also the UK’s 41st largest export market, accounting for 0.4% of total UK exports, and 44th largest import market, accounting for 0.3% of total UK imports.

The release contains further detail on the UK-Israel trade relationship, including the value of UK goods exports and imports between each UK region and Israel:

2. UK government policy

2.1 Conservative governments

In 2019 the UK and Israel agreed a trade and partnership agreement to ensure continuity of trade arrangements following the UK’s departure from the EU.[5] The agreement subsequently took full effect on 1 January 2021 following the end of the UK’s Brexit transition period.

In November 2021 the UK and Israeli governments signed a memorandum of understanding to “work more closely over the next decade on cyber, technology, trade and defence”.[6] Under the memorandum both governments agreed to develop a bespoke roadmap that would “elevate the UK-Israel relationship to a strategic partnership”.

In February 2022 the UK government issued a “call for input on a future trade agreement with Israel”.[7] It said this would “provide businesses, individuals, and other interested stakeholders with the opportunity to give valuable feedback and highlight their priorities for our future trading relationship with Israel”.

In July 2022 the UK government launched negotiations for an upgraded free trade agreement (FTA) with Israel alongside its response to the earlier consultation.[8] In a written statement announcing the decision, Anne-Marie Trevelyan, then secretary of state for international trade, said current trading arrangements were “not designed for a digital age”.[9] She added the government would negotiate to put “services at the heart of a modern new agreement, which better benefits the UK economy”. Ms Trevelyan continued:

Around 6,600 businesses from all four corners of the United Kingdom exported their goods to Israel in 2020. Of these firms, 5,600 were small and medium sized enterprises (SMEs). The United Kingdom’s SMEs could be amongst the biggest winners from a new agreement with Israel, as we seek to make it easier to do business and focus on trade barriers that may have deterred them from previously entering this exciting marketplace.

In March 2023 the UK and Israeli governments agreed a ‘2030 roadmap for UK-Israel bilateral relations’.[10] The document said both governments were aiming for the FTA being negotiated to be an “advanced agreement focusing on ambitious outcomes which enhance our trade in services, financial services, and innovation reflective [of our] status as technology superpowers”.

2.2 Labour government

In May 2025 the UK government suspended negotiations on a new FTA with Israel.[11] Explaining the government’s decision in the House of Commons, David Lammy, then foreign secretary, argued the Israeli government’s actions in Gaza had “made this necessary”. He added the government would also be reviewing UK cooperation with Israel under the 2030 bilateral road map.

The government has since said trade between the UK and Israel “underpins key areas of UK life and UK exports to Israel support thousands of jobs in the UK”.[12] It has also said, in response to questions about the status of the UK-Israel trade and partnership agreement, that “action to suspend trade preferences risks unpredictable consequences and significant economic disruption for British businesses”.

However, the government has also reiterated that it suspended trade negotiations “owing to the actions of this Israeli government in Gaza and the West Bank”.[13] The government has also said it would “take a sustained shift in the positions of this Israeli government for the UK to consider restarting the FTA negotiations”.[14]

3. Read more

Image by Ed Wingate on Unsplash.

References

  1. HM Government, ‘United Kingdom’s trade envoy programme’, accessed 19 December 2025. Return to text
  2. Department for Business and Trade, ‘Trade and investment factsheets: Israel’, 17 December 2025. Return to text
  3. As above, p 6. Bold in original. Return to text
  4. As above, p 7. Return to text
  5. Department for International Trade, ‘UK-Israel trade and partnership agreement’, updated 9 November 2022; and ‘Continuing the United Kingdom’s trade relationship with Israel’, 26 February 2019. See also: House of Lords European Union Committee, ‘Scrutiny of international agreements: Treaties considered on 19 March 2019’, 20 March 2019, HL Paper 321 of session 2017–19, pp 9–14. Return to text
  6. Foreign, Commonwealth and Development Office, ‘UK-Israel strategic partnership: Memorandum of understanding 2021’; and ‘Memorandum of understanding between the Ministry of Foreign Affairs of Israel and the UK Foreign, Commonwealth and Development Office on the UK-Israel strategic partnership’, both 29 November 2021. Return to text
  7. House of Commons, ‘Written statement: Trade with Israel policy update (HCWS578)’, 2 February 2022. See also: Department for International Trade, ‘Trade with Israel: Call for input’, updated 20 July 2022. Return to text
  8. House of Commons, ‘Written statement: Israel trade negotiation—update (HCWS247)’, 20 July 2022. See also: Department for International Trade, ‘UK-Israel free trade agreement: Strategic approach’, 20 July 2022; and House of Lords International Agreements Committee, ‘Letter from Anne-Marie Trevelyan to Baroness Hayter of Kentish Town (dated 19 July 2022)’, 21 September 2022. Return to text
  9. House of Commons, ‘Written statement: Israel trade negotiation—update (HCWS247)’, 20 July 2022. Return to text
  10. Foreign, Commonwealth and Development Office, ‘2030 roadmap for UK-Israel bilateral relations’, 21 March 2023. Return to text
  11. HC Hansard, 20 May 2025, cols 923–5. See also: HL Hansard, 22 May 2025, cols 362–4. Return to text
  12. House of Commons, ‘Written question: Trade agreements—Israel (77516)’, 13 October 2025. Return to text
  13. House of Lords, ‘Written question: Trade agreements—Israel (HL11163)’, 28 October 2025. Return to text
  14. House of Lords, ‘Written question: Trade agreements—Israel (HL11841)’, 1 December 2025. Return to text