Ministers also claim that the boycotts undermine ‘community cohesion.’
The Government says it is banning public boycotts of Israeli goods because the practice undermines “community cohesion” and Britain’s “international security”.
Ministers have now issued a so-called procurement policy note notifying public authorities that they would face “severe penalties” if they continue procurement boycotts on ethical grounds.
The Government announced the policy on Monday and has now implemented it without any parliamentary debate or vote.
Boycotting of Israeli goods to become criminal offence
“Public procurement should never be used as a tool to boycott tenders from suppliers based in other countries, except where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government,” the instruction notice says.
“There are wider national and international consequences from imposing such local level boycotts. They can damage integration and community cohesion within the United Kingdom, hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security.
“As highlighted earlier, it can also be unlawful and lead to severe penalties against the contracting authority and the Government.”
The policy effectively means public authorities cannot take ethical considerations into account when procuring goods and affects campaigns against the arms trade, fossil fuels, tobacco products and Israeli settlements in the occupied West Bank.
A number of public bodies have ethical procurement policies that prevent them from buying or investing in certain kinds of products.
In 2014 the Scottish Government published a contrasting procurement notice to Scottish Councils warning that it “strongly discourages trade and investment from illegal settlements” set up by Israel.
Councils across the UK have also put pressure on suppliers to cease business with the country, which is illegally occupying and building settlements on Palestinian land, according to the United Nations.
Labour controlled Birmingham City Council warned last year that it would not renew its waste disposal contract with French waste management company Veolia unless it pulled out of the West Bank.
In 2014 Leicester City Council passed a policy of boycotting products produced in illegal Israeli settlements in the West Bank.
Labour has criticised the new anti-boycotts policy as an “attack on democracy”, while the Campaign Against the Arms trade said it was an attack on “the rights of all local people and campaign groups across England”.
Other criticial groups include Amnesty UK and the Palestine Solidarity Campaign, which said the policy was a “gross attack” on democratic freedoms.
Minister Matthew Hancock is currently on a visit to Israel, the main target of the policy, where he is promoting business links with Britain.
Israeli politicians have previously criticised moves to boycott, divest, and impose sanctions on Israel – and the policy announcement will likely see Mr Hancock given a warm welcome.
In June last year the country’s prime minister Benjamin Netanyahu criticised the UK’s National Union of Students for boycotting Israel – arguing that they should condemn Isis instead.
The NUS had however passed a policy condemning Isis, in December 2014.