Israel: UK Trade Policy (Hansard, 13 June 1991)

§ Lord Reay
My Lords, we deplore the boycott but have no proposals for legislation against it. Companies should be free to act in accordance with their commercial judgment.

§ Lord Clinton-Davis
My Lords, is the Minister aware that it is not a question of commercial judgment but of commercial intimidation? Is he aware that five member states of the European Community have either adopted, or are embarking upon, legislation to ensure that their companies do not comply with the boycott? Is he not further aware that the European Commission has put forward similar proposals? What will be the Government's reaction to that situation? What about level playing fields?

§ Lord Reay
My Lords, we do not believe that companies can or should be instructed or compelled by law to trade with different parts of the world. Companies must make their own decisions in the light of their own commercial judgment about the markets that they wish to serve. Our opposition to anti-boycott 1203 legislation is a long-established policy followed by administrations of both parties since 1978 when a Select Committee of your Lordships' House considered the matter at length and reported against the idea. I had understood that government policy continued to have the support of the party opposite.

§ Lord Hailsham of Saint Marylebone
My Lords, will my noble friend confirm that if made these undertakings are almost certainly unenforceable in law as racially and politically discriminatory and contrary to public policy as in restraint of trade?

§ Lord Reay
My Lords, we are opposed to and deplore all trade boycotts which lack international support and activity. We do not recognise the boycott administration and have no formal communications with the boycott offices.

Viscount Tonypandy
My Lords, in view of the fact that the Government are opposed to the blackmailing of our industries by anyone, perhaps I may say this. Surely they will bear in mind that they have been reminded that five European countries already take steps to protect their industries from being blackmailed. In view of the fact that Israel is our second largest market in the Middle East, will the Government again consider taking action to protect British industry from Arab blackmail?

§ Lord Reay
My Lords, with respect to what other countries do, it is our information that the United States is the only country with effectively enforced anti-boycott legislation. British exporters do well in their trade with Israel. In 1990 our visible exports amounted to £558 million. In 1989 (the latest year for which figures are available) the United Kingdom's share of Israel's imports from the OECD was 8.1 per cent. That compares favourably with our worldwide market share of 7.3 per cent., and is higher than the share of other EC countries which have some form of anti-boycott legislation.

§ Lord Bottomley
My Lords, is the Minister aware that some years ago the late Lord Byers chaired a committee of which I was a member, and it raised the same question with the Government of the day? On that occasion the answer was sympathetic. The Minister appears to be less sympathetic today. Why is that?

§ Lord Reay
My Lords, as I have indicated, there has been no change in government policy. It is not our policy to interfere with the commercial decisions of British firms. We believe in firms taking responsibility for their own commercial decisions. Our policy of allowing companies to make their own decisions on boycott issues is well understood by exporters and has stood the test of time.

§ Lord Beloff
My Lords, does my noble friend really believe that there is a government more committed to the view of free commercial choice than the Government of the United States? If the Government 1204 of the United States can protect their firms against blackmail, why should that be out of reach of the Government of the United Kingdom?

§ Lord Reay
My Lords, the United States must take its own decisions with regard to its own trade policy. I have outlined ours.

§ Lord Ezra
My Lords, as the noble Lord, Lord Clinton-Davis, pointed out, the Commission is considering devising a recommendation with regard to this boycott. If such a recommendation were made, what would be the attitude of the United Kingdom Government towards it?

§ Lord Reay
My Lords, there is no agreement within the European Community to enact legislation on the boycott. I have indicated the attitude of the United Kingdom Government.

§ Baroness Phillips
My Lords, are the Government aware that those companies trading with Arab countries are not asked the same questions as those trading with Israel? Therefore are they carrying out the terms of the boycott to which they were partners some time ago?

§ Lord Reay
My Lords, I believe that even if the boycott did not exist, companies with important interests in Arab markets would be reluctant to trade with Israel while the Arab-Israeli dispute persists.

§ Lord Mayhew
My Lords, perhaps I may ask this question. While the Israelis persistently defy Security Council resolutions, might not the Council solve this and other problems by making the economic sanctions official?

§ Lord Reay
My Lords, the boycott is a facet of the Arab-Israeli dispute, and a solution must be sought in that context. Confidence-building measures would need to be reciprocal in order to be effective.

§ Lord Clinton-Davis
My Lords, is the Minister saying that all the reports which have appeared in the newspapers about the European Community putting forward a proposition along the lines that I have stated are untrue? Is he also asserting that the Government would vote against any such proposition because of the views that he has expressed today?

§ Lord Reay
My Lords, the noble Lord has asked a hypothetical question. There is no such proposal before the Community at the present time.