The terrace of the House of Lords was packed when Lord Austin of Dudley hosted a reception for Israeli energy technology innovators last week.
Among those in attendance, as coffee and pastries were passed around, were representatives from the London Stock Exchange looking for initial public offering (IPO) opportunities, Shell’s top climate transition guru in the UK. United and the British Ambassador to Israel, Simon Walters, making his first trip to the UK since. the atrocities of October 7.
The atmosphere was suitably upbeat, and Austin and Walters’ speeches gave the impression that nothing had changed since Israeli Prime Minister Benjamin Netanyahu embarked on his all-out war against Hamas.
Austin stressed that Britain remained Israel’s third largest trading partner and that, despite the conflict in Gaza, trade between the two countries was now worth £7 billion a year.
Among other things, one in five drugs prescribed by the NHS, saving countless British lives, comes from Israel.
Danger signs: a dark Tel Aviv skyline. The war in Gaza and a perverse reaction to the events, fueled by social media, have tarnished Israel’s reputation and standing in the world.
Walters was equally effusive. He expressed solidarity with his friends in Israel and stressed that it was “vital that life goes on,” including cooperation between the countries on research and innovation.
It was a surprisingly optimistic message given his boss Lord Cameron’s growing exasperation over humanitarian aid to Gaza’s struggling population and relentless media attacks on the behavior of the Israel Defense Forces (FDI).
As intriguing as the green solutions proposed by the Israeli Climate First initiative were, such as drone technology that can monitor the performance of 300 wind farm towers per day (up from six currently), it was difficult to think that much of these solutions would be likely to be adopted. anytime soon.
Gaza and a perverse reaction to events, fueled by Tik Tok and other social media, has tarnished Israel’s reputation and standing in the world.
Just how damaging relentless anti-Israeli rhetoric is to the country was demonstrated in recent days when BP and the Abu Dhabi National Oil Company suspended negotiations with Tel Aviv over a £1.6 billion energy project.
Foreign investors had planned to take a 50 percent stake in Tel Aviv-listed NewMed Energy, which has interests in vast natural gas deposits off Israel’s Mediterranean coast.
Potential investors withdrew, citing “uncertainty created by the external environment.” It is believed to be the biggest corporate deal to be disrupted since the start of the Gaza war, which has cost around 31,000 lives.
The suspension of the agreement is particularly sensitive because it constitutes one of the first signs of a breakdown of the 2020 Abraham Accords, marking a new era of economic, commercial and political cooperation with the Gulf states.
These close ties, which have made Dubai a leading tourist destination for Israelis, have been a cause for consternation over the arc of radicalism, financed by Iran, running through the region.
Many analysts believe Iran financed and encouraged the October 7 Hamas assault in an effort to prevent the extension of the Abraham Accords to Saudi Arabia, a move that would have frozen opportunities for Palestinian progress. .
Instead, Israel’s retaliation – which some see as a trap set by Hamas – has incited radical elements throughout the region.
The most damaging impact has been on shipping via the Red Sea. It is remarkable that so far the expected rise in energy prices has not occurred.
Nevertheless, Houthi attacks have an impact on Western economies. Britain’s economic recovery in January, with output up 0.2 percent, would have been much stronger if manufacturing supply chains had not been hampered.
Israel’s booming, high-tech economy is devastated by the war.
Even before the conflagration, the danger signs were there as some of the tech giants, which dominated the skylines of Tel Aviv and Haifa, withdrew from new investments amid protests against the government’s undemocratic judicial reforms led by Netanyahu.
In the final quarter of 2023, the country’s production plunged by 19.4 percent. This turnaround was triggered by the recall of some 300,000 reservists to military service.
At the same time, a large portion of Israelis, around 120,000 people, have been displaced from vulnerable neighborhoods along Israel’s northern borders with Lebanon and Syria.
Many are accommodated, at government expense, in tourist hotels in the South.
The country’s strong public finances have been decimated. It was recently announced that the country would raise £47 billion in debt and taxes to fund the hole in the national budget.
To put this figure into context, it’s almost the same amount of money a UK government would need to completely abolish national insurance.
There were a few flashes of light in the distance even as the war progressed.
Hedge fund financier Bill Ackman, in an act of solidarity, purchased a 25 percent stake in the Tel Aviv Stock Exchange.
The Jerusalem government has pushed hard to offer tech giant Intel a £2.5 billion grant to build a £20 billion semiconductor factory in Israel, leveraging the hand -highly qualified labor in the country.
For now, the deal appears secure. But the brutality of the conflict, as BP’s decision shows, is changing the geopolitical dynamic of too much proximity to Israel.
Efforts to create a more positive narrative, seen at the Climate First event at Lords, are admirable.
But serious doubts remain about how long it will take to reverse the tide of opprobrium.
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