'Severe penalties' for public bodies boycotting Israeli goods

A Pro-Palestinian demonstrator at a boycott Israel rally in Paris Credit: Lemouton Stephane/PA

The government has warned councils of "severe penalties" if they impose boycotts on trade and investment with Israel - in a move the Labour leader's office said would have outlawed boycotts against apartheid South Africa.

The Cabinet office will publish guidance later this week stating locally-imposed boycotts are "inappropriate" unless government-sanctioned.

A spokesman for Jeremy Corbyn called the plans "an attack on local democracy".

The guidance will warn that boycotts risk breaching a World Trade Organisation agreement signed by both the EU and Israel, which requires equal treatment for suppliers from all signatory nations.

And the Cabinet Office said that town hall boycotts can also "undermine good community relations, poisoning and polarising debate, weakening integration and fuelling anti-Semitism", as well as hindering Britain's export trade and harming international relationships.

Cabinet Office Minister Matthew Hancock is visiting Israel this week Credit: Dominic Lipinski / PA

Cabinet Office Minister Matthew Hancock is expected to say on a visit to Israel this week: "We need to challenge and prevent these divisive town hall boycotts. The new guidance on procurement, combined with changes we are making to how pension pots can be invested, will help prevent damaging and counter-productive local foreign policies undermining our national security."

The new guidance will apply to all public bodies, including central government and the NHS as well as quangos and councils. Any public body found to be in breach of the regulations could be subject to severe penalties, said the Cabinet Office.