UK faces potential £2 trillion reparations claim if Palestine state recognised, experts warn

LONDON — Prime Minister Keir Starmer's decision to recognise a state of Palestine could provoke reparations demands that, legal experts warn, could exceed £2 trillion, a figure roughly equivalent to Britain’s current annual output. The move, which Starmer intends to press ahead with ahead of his scheduled address to the United Nations this week, is contingent on Israel meeting certain conditions, including a Gaza ceasefire and renewed momentum toward a two-state solution.

Palestinian Authority President Mahmoud Abbas has long signaled that Britain should be held financially accountable for the period when the region was under British rule, arguing that compensation should reflect the value of land and resources seized during the Mandate era between 1917 and 1948. In that frame, Abbas and allied legal advocates have pressed for reparations under international law, a stance that has drawn scrutiny from international lawyers who caution that any such claims would be novel and complex to resolve in a new state context. Some international law scholars described £2 trillion as a plausible starting point for damages, given the scale of land transfers and the economic disruption associated with the mandate period.

The British government has framed recognition as a step toward peace, conditioning it on concrete progress toward a ceasefire in Gaza and a revival of negotiations that would lead to a viable two-state outcome. Officials say the decision is designed to preserve leverage in diplomatic talks and align Britain with other Western partners urging restraint and negotiation, while avoiding a unilateral shift that could complicate existing diplomatic arrangements.

Reaction from political opponents was swift. Tory justice spokesman Robert Jenrick dismissed reparations talk as “ahistorical nonsense” and warned that any claim could become a costly precedent. He invoked memories of Britain’s territorial decisions in other regions, including the Chagos Islands, arguing that the government should not be deterred by demands that he characterized as unfounded or politically expedient. The government’s messaging has emphasized that taxpayers should not bear the burden of reparations, framing the issue as a political distraction rather than a legitimate financial claim.

The debate has also touched a broader arc of British diplomacy. Some supporters of the Palestinian cause have criticized the government for what they call a missed opportunity to repair historical grievances, while allies and humanitarian advocates warn that inaction could undermine long-standing efforts to stabilize the Middle East and protect civilians in Gaza.

Families of hostages abducted by Hamas during the October 7 attacks have written to the prime minister, saying the decision to recognise a Palestinian state has “dramatically complicated” efforts to locate and recover their loved ones. They urged the government to focus on immediate humanitarian relief and secure safe channels for negotiation with all parties to secure the release of captives.

A campaign group calling itself Britain Owes Palestine has pressed for a formal apology from the United Kingdom for alleged wartime misdeeds in the region and has argued for reparations as part of a broader reckoning with Britain’s colonial past. The group’s stance reflects a wider, ongoing public debate about accountability, historical memory, and the responsibilities of former colonial powers on the international stage.

Some observers point to domestic political history to illustrate how reparations debates can become entangled with other colonial-era issues. Deputy Prime Minister David Lammy once supported calls for reparations for slavery, framing the issue as part of a broader reckoning with Britain’s colonial legacy. Legal figures connected to the government have also engaged with reparations questions in other contexts, including slavery-related claims that have surfaced in academic and policy circles. In this broader discourse, government lawyer Lord Hermer has consulted on reparations plans for other historical grievances, including a widely discussed ten-point framework that, in some analyses, envisions substantial compensation from the UK to former colonies. Jenrick and other opponents have seized on these past debates to argue that reparations are a dangerous precedent that could drain public finances and widen geopolitical fault lines.

The potential financial implications extend beyond payments to a state once considered a political fork in the road for many Western capitals. If reparations were pursued aggressively, the claims could redefine the financial exposure of the United Kingdom to international legal actions, potentially affecting international aid, trade negotiations, and security cooperation. Critics caution that the issue could complicate Britain’s ability to respond to immediate crises abroad, including humanitarian emergencies and regional conflicts that require swift, well-funded diplomatic and military support.

Beyond the immediate financial calculations, the discussion raises questions about international law, the interpretation of historic obligations, and how a modern state navigates inherited legal frameworks tied to the Mandate era. While supporters of recognition argue that formal statehood would advance peace prospects and extend Palestinian sovereignty, opponents warn that even a symbolic step toward recognition could unleash a cascade of legal claims and budgetary pressures that would challenge current fiscal plans and public sentiment.

As Starmer’s government prepares to announce its position in the coming days, diplomats and legal scholars say the situation remains highly fluid. Any formal recognition could be accompanied by a parallel diplomatic push to secure a durable ceasefire, broader regional stability, and a credible path to negotiations that address the legitimate rights and security needs of Israelis and Palestinians alike. The balance between historical accountability and contemporary diplomacy will likely shape the UK’s role in a volatile and deeply contested region for years to come.