Foreign Secretary Ed Miliband told MPs: 'This government will not acquiesce in the destruction of the two-state solution.' EPA
Foreign Secretary Ed Miliband told MPs: 'This government will not acquiesce in the destruction of the two-state solution.' EPA

Ed Miliband signals imminent UK sanctions on occupied West Bank businesses

Thomas Harding

Britain’s Foreign Secretary has given the strongest signal yet that the government is preparing sanctions to imminently target businesses linked to illegal Israeli settlements in the occupied West Bank.

Ed Miliband disclosed that the government would announce a “comprehensive set of measures” in the coming weeks as ministers seek to prevent the destruction of the prospect of a Palestinian state.

His comments, made during his first Foreign Office Questions in Parliament, have fuelled expectations that sanctions on companies and other organisations involved in the settlements are imminent.

Mr Miliband said the Israeli settlements were illegal under international law and condemned the recent issuing of tenders for construction in the E1 area of the West Bank, which he described as a long-standing “red line”.

“This government will not acquiesce in the destruction of the two-state solution,” he told MPs. “We will act, and I will set out a comprehensive set of measures in the coming weeks.”

Explaining the British government's toughening stance, he said that what had happened in Gaza and the West Bank “has pricked the conscience of a generation and that’s why we will act”.

His words were reiterated shortly after by Andy Burnham, making his first appearance at the despatch box as rime Minister. He reminded MPs he had said before he became PM he thought the government needed to look again at its approach to Israel. He said the E1 settlement extension and fast-tracked tender process made matters urgent.

Asked whether action should extend beyond goods to services, including mortgages, financial support and legal services provided by British companies to settlement builders, the Foreign Secretary said the government was examining its “wider economic relationship with the occupied territories”.

“We do not want British companies financing, constructing or advertising new settlements,” he said. “The work we are now undertaking is how we can stop that.”

His remarks represent the clearest indication yet of the scale of measures being considered, although the UK government has been signalling for some time that further action against settlement activity was under consideration.

Conservative MP Kit Malthouse argued that the UK’s approach to Palestine had been “an almost complete failure of British foreign policy” and it was “distressing” to witness ministers “sent out like goldfish that mouth platitudinous condemnation, promise action, only being dragged to pathetic, ineffectual steps by pressure from their own backbenchers … Is anything going to change?”

Responding, Mr Miliband said action was urgently required as the illegal settlement expansion continued.

“If you are for the two-state solution and you see it being destroyed by the facts on the ground, you must act,” he said. “And I can assure him … we are going to.”

He said the new Prime Minister, Andy Burnham, had recognised the need for a “step change” in Britain's approach because of the urgency of the situation.

The UK government is expected to announce the details of its package before the House of Commons begins its conference recess in just over two weeks' time.

The precise targets and legal mechanisms remain unclear. Ministers have yet to confirm whether any new sanctions would cover individual companies, financial institutions or the provision of services to settlement-related businesses.

Updated: September 01, 2026, 4:27 PM