Labor Government Proposes Plan to Cut Benefits to Settlements

The Israeli government is considering a plan that sharply limits the number of West Bank settlements qualifying for tax breaks and other special benefits.

Jewish communities outside the pre-1967 borders that remain entitled to these concessions are singled out in a proposal submitted to the Cabinet on Wednesday by a government committee headed by Shimon Shevas, director-general of the Prime Minister’s Office.

They appear to be a pointer to a distinction made by Prime Minister Yitzhak Rabin between “political” settlements in the administered territories, which should not be encouraged, and “security” settlements, which should.

Under the plan, benefits would continue to the Gush Katif cluster of settlements near Gaza; Efrat and other communities of the Gush Etzion bloc south of Jerusalem; and settlements along the Jordan River.

But the withdrawal of benefits to all other settlements in the territories marks a sharp departure from the emphasis placed by the previous Likud administration on Jewish settlement in these areas. Shevas said the plan reflects a new order of priorities by the Labor-led government, which took office five months ago.

High-tech industries in the capital and the post-1967 settlements in its environs would get a boost under the plan’s provision to grant special status to greater Jerusalem.

News reports said the plan would probably lead to a significant slowdown in the creation of new industries beyond the “Green Line” and perhaps even a relocation of some businesses to within the pre-1967 borders.

The opposition Likud bloc said the plan is part of a larger government effort to discourage West Bank settlement and reflects where it is headed politically.

Likud Knesset member Haim Kaufman said the plan would be interpreted by West Bank Arabs and foreign observers as “a signal there is about to be a diplomatic turnabout” in negotiations with the Palestinians.