UK faces potential £2 trillion reparations amid Palestine state recognition plan

London — Prime Minister Keir Starmer's decision to recognise a Palestinian state could unleash reparations demands that, legal experts say, may run to more than £2 trillion. The plan, which Starmer has indicated he will press ahead with ahead of his planned appearance at the United Nations this week, depends on Israel meeting conditions such as agreeing to a Gaza ceasefire and reviving a pathway to a two-state solution.

Palestinian Authority President Mahmoud Abbas has signalled that Britain should compensate for territory held under British rule from 1917 to 1948, arguing that reparations should be determined in accordance with international law. Some international-law scholars say £2 trillion is a practical starting figure, roughly the size of Britain's annual economy, reflecting the value of land taken from the Palestinian people when Britain relinquished control after World War II.

The move drew swift political backlash. Tory justice spokesman Robert Jenrick condemned the idea, calling it "Chagos 2.0" in reference to the government surrender of the Chagos Islands to Mauritius, a development that leaked documents suggest could cost taxpayers more than £35 billion to rent back. He said: "Not a penny of taxpayer money should be spent on so-called reparations. This is a load of ahistorical nonsense. Britain was, and remains, a force for good in the world – these ridiculous demands should be brushed aside. Lord Hermer spent his career working against British interests. Now Starmer's appointed him to work at the heart of government and he's undermining Britain from within – whether the Chagos surrender or the betrayal of veterans who served in Northern Ireland. He simply cannot be trusted and should be sacked."

Relatives of hostages abducted by Hamas on October 7 have written to the Prime Minister to condemn the move, saying it has "dramatically complicated" prospects of being reunited with their loved ones. Campaign groups such as Britain Owes Palestine have called for an apology for war crimes in the region.

Deputy Prime Minister David Lammy, who once supported reparations for slavery, has noted that as a Caribbean people, history cannot be erased. The government’s lawyer-in-chief, Lord Hermer, has provided legal assistance to nations seeking reparations for slavery, and his advice contributed to a reported ten-point plan for reparations, a framework some former colonies have cited as a potential model for claims against Britain, with estimates running into trillions.

Analysts say the policy choice carries both legal and diplomatic risks and could establish a precedent for reparation claims against former colonial powers. The United States has signaled concerns, stating that the move could have "disastrous consequences" for regional stability and for U.S.-UK cooperation on security issues. The government has insisted that any decision would not divert money from taxpayers, framing the issue as a matter of international law and historical accountability. The UN visit slated for later this week adds a critical stage to Starmer's approach, with officials saying the outcome could influence Britain’s standing in international institutions and its leverage in negotiations over Gaza and the broader Israeli-Palestinian conflict.