London, United Kingdom: English town halls and publicly funded universities face ‘severe penalties’ if they institute boycotts of ‘unethical’ companies or Israeli goods under controversial new rules to be outlined by the government this week.

‘Locally imposed boycotts can roll back integration as well as hinder Britain’s export trade and harm international relationship,’ the Cabinet Office said in a statement on Monday.

‘Town hall boycotts undermine good community relations, poisoning and polarising debate, weakening integration and fuelling anti-Semitism,’ it added.

The proposed rules are due to be announced later this week by Cabinet Office Minister Matt Hancock during a visit to Israel, the government statement said, without saying what penalties may be imposed.

‘We need to challenge and prevent these divisive town hall boycotts,’ Hancock was expected to say.

The ruling will only affect England as the decision in other parts of the United Kingdom comes under the authority of the devolved governments.

The Israeli government praised the ruling. ‘We welcome the decision taken by the British authorities not to allow anti-Israeli initiatives at local level,’ foreign ministry spokesman Emmanuel Nahshon told AFP.

‘This is a measure adopted following a few cases in which anti-Israeli elements tried to initiate local initiatives against Israel,’ he added.

The measure would apply to the public sector in England as a whole, including the National Health Service.

The only exception to the boycott ban, which also covers action against companies involved in the arms trade, fossil fuel and tobacco, would be official sanctions agreed by the central government.

The move follows a series of local boycotts in recent years that have angered Israeli authorities.

In 2014, Leicester City Council instituted a boycott on goods made in Israeli settlements in the occupied West Bank.

The European Union last year backed the labelling of products from Israeli settlements, in a move that Israel condemned as discriminatory and warned could harm the peace process with the Palestinians.

The Cabinet Office said it continued to support labelling ‘to ensure that individual consumers are able to make informed choices before they buy’.

But an opposition Labour Party spokesman said the boycott ban was ‘an attack on local democracy’.

‘This government’s ban would have outlawed council action against apartheid South Africa,’ he said.

Amnesty International’s UK economic relations programme director Peter Frankental also condemned the plan.

‘Where’s the incentive for companies to ensure there are no human rights violations such as slavery in their supply chains when public bodies cannot hold them to account,’ he told the Independent newspaper.