Starmer defends Chagos deal as Badenoch criticises multibillion ‘surrender tax’

Sir Keir Starmer has signed an agreement to hand over sovereignty of the Chagos Islands to Mauritius in a deal that could cost taxpayers tens of billions of pounds.

In a treaty to “complete the process of decolonisation of Mauritius” the Government has agreed to pay at least £120 million-a-year for 99 years for control of the vital Diego Garcia military base, plus hand over £1.125  billion for economic development over a 25-year period.

Ministers argued that the deal needed to be done because the UK would have faced legal challenges “within weeks” which could have jeopardised the operation of the Indian Ocean base which is used by US and British forces.

The International Court of Justice, in an advisory opinion in 2019, said the Chagos Archipelago should be handed over.

Sir Keir said: “If Mauritius took us to court again, which they certainly would have, the UK’s longstanding legal view is that we would not have a realistic prospect of success and would likely face provisional measures orders within a matter of weeks.”

Defence Secretary John Healey added: “Quite simply, the loss of Diego Garcia military base would now be unthinkable, and yet without action, without this deal, within weeks, we could face losing legal rulings and within just a few years the base would become inoperable.”

The total cash cost over the 99-year term of the deal will be at least £13 billion for the use of the base and the 25-year agreement to hand over money to support projects to promote the “economic development and welfare of Mauritius”.

Under the deal:

– The UK will pay £165 million in each of the first three years.

– From years four to 13 it will pay a fixed £120 million, after which payments will be indexed to inflation until the end of the deal.

– An annual grant of £45 million a year for 25 years will begin in the fourth year of the deal to support development, with British firms involved “to the maximum extent practicable”.

– A £40 million payment will set up a trust fund for the benefit of Chagossians.

Speaking from the UK’s military headquarters, the Prime Minister said the Diego Garcia base is “one of the most significant contributions that we make to our security relationship with the United States”.

Using government accounting principles to adjust for long-term costs, officials said the deal amounted to an average of £101 million a year in 2025/26 prices with an overall cost of £3.4 billion a year “using a net present value methodology”.

Downing Street denied suggestions from journalists that was financial sophistry, insisting it was “standard practice”.

The Tories said the true cost of the deal could rise to more than £30 billion if inflation is at the 2% target.

The UK will retain full operational control of Diego Garcia, including the electromagnetic spectrum satellite used for communications which counters hostile interference.

A 24-nautical mile buffer zone will be put in place around the island where nothing can be built or placed without UK consent.

Without the deal, the UK could not prevent China or any other nation setting up their own bases on the outer islands of the Chagos archipelago or carrying out military exercises near Britain’s base, Sir Keir said.

“We would have to explain to you, the British people and to our allies, that we’d lost control of this vital asset,” he added.

He claimed that critics including Tory leader Kemi Badenoch and Reform UK’s Nigel Farage were aligned with Russia in opposing the deal.

“It is worth reminding ourselves who is in favour of this treaty, this deal, and who’s against it,” he said.

“In favour are all of our allies, the US, Nato, Five Eyes, India.

“Against it, Russia, China, Iran and, surprisingly, the Leader of the Opposition and Nigel Farage are in that column alongside Russia, China and Iran, rather than the column that has the UK and its allies in it.”

Mrs Badenoch claimed the total cost of the deal could mean “at least £30 billion of taxpayers’ money thrown away in a surrender tax”.

She said: “It speaks volumes about this shameful Prime Minister that he attacks me instead of owning up to another wrong-headed, wasteful and dangerous deal.”

US President Donald Trump’s administration in Washington supported the deal, which guarantees the base which is used extensively by the US armed forces.

US Secretary of State Marco Rubio said: “This agreement secures the long-term, stable and effective operation of the joint US-UK military facility at Diego Garcia, which is critical to regional and global security.”

The agreement had been due to be signed on Thursday morning but was temporarily blocked by an injunction hours before.

High Court judge Mr Justice Goose granted an injunction at 2.25am against the Foreign, Commonwealth and Development Office (FCDO) for “interim relief” to Bertrice Pompe, one of two British women born on the Chagos Islands who is set to bring legal action against the Government over the deal.

A different judge later said the injunction should be discharged after an urgent hearing.

The last-minute legal challenge was “in a way … a good thing” because it forced a court to come down conclusively on the side of the Government and clear it to go ahead, Sir Keir said.