Why is the UK against Israel's proposed West Bank E1 settlement?

The BBC's Middle East correspondent Lucy Williamson reports from Ma'ale Adumim - an Israeli settlement in the occupied West Bank, overlooking Israel's proposed E1 site. UK Foreign Secretary Ed Miliband told Parliament on Tuesday that the UK would ban the import of goods from Israeli settlements in the illegally occupied West Bank. Miliband said "ethnic cleansing" was being carried out by "settler terrorists" and accused the Israeli government of turning a "blind eye". Israel's Foreign Minister Gideon Saar responded to the move by saying that Israel will close the British consulate in Jerusalem and called the UK government "hostile". Israel has been planning to develop 1,200 new homes in the occupied West Bank.