Latest news with #MauritiusDeal
Telegraph
a day ago
- Business
- Telegraph
Revealed: Chagos deal to cost 10 times what Starmer claimed
Sir Keir Starmer's Chagos Islands deal will be 10 times more expensive than he has claimed, official figures reveal. The Government's own estimate of the cost of giving away the British Indian Ocean Territory to Mauritius is almost £35bn, according to documents released under the Freedom of Information Act – far higher than the £3.4bn figure Sir Keir has previously used in public. Labour ministers now face claims that they misled Parliament and the press with an 'accountancy trick' to hide the size of the bill from taxpayers. Under the terms of Sir Keir's deal, the UK will give up the Chagos Islands by the end of this year and lease back the Diego Garcia military base, a facility built there in the 1970s that has been used by UK and US forces. The cost of the agreement has been fiercely disputed. Sir Keir claimed in May that it would cost £3.4bn over 99 years, accounting for inflation and other discounts, but the Conservatives said it would total £30bn. An official document produced by the Government Actuary's Department shows the cost of the deal was first estimated at 10 times Sir Keir's figure, at £34.7bn, in nominal terms. It explains how the cost was lowered by the Government using inflation estimates, then reduced again under a controversial accounting method sometimes used by the Government for long-term projects. The total cost, which ministers refused to release to Parliament, is equivalent to 10 Queen Elizabeth-class aircraft carriers, or more than half the annual schools' budget. Sir Keir now faces accusations that he misled Parliament, because he told MPs in February that cost estimates between £9bn and £18bn were 'absolutely wide of the mark' and suggested the true figure was lower. The document shows that civil servants were first instructed to lower the cost of the deal on paper to £10bn, to account for an estimated annual inflation rate of 2.3 per cent over 99 years. Then it was reduced again by between 2.5 and 3.5 per cent per year using the Treasury's Social Time Preference Rate, a principle that money spent immediately is more value than funds earmarked for future spending. The final figure was calculated to be 90 per cent lower than the cash value of the payments the UK will make to Mauritius over the next century, in what critics say was a deliberate attempt to mislead the public. Writing for The Telegraph (read the article below), Dame Priti Patel, the shadow foreign secretary, said: 'Instead of owning up to the costs, Labour have used an accountancy trick to claim the amount was only a mere £3.4bn. 'We've all known it's a terrible deal with huge costs to hard-pressed British taxpayers. But for months, ministers in public and Parliament have sought to cover up the true amounts.' Foreign Office sources insisted ministers had used a 'standard' calculation for long-term government spending, and denied accusations that it was part of a 'cover-up'. However, other projects announced by Labour have not used the same method, which has allowed ministers to advertise higher spending on popular policies. Angela Rayner has since launched a 10-year affordable homes plan that included inflation-level increases in government spending as part of the cost of the policy – a method not used with the Chagos deal. The calculations behind the deal were revealed in response to a freedom of information request submitted by the Conservatives. MPs have previously requested the document in Parliament but ministers have refused to release it, in an apparent breach of government transparency rules. Darren Jones, a Treasury minister, said in June that it was 'not normal practice' for the Government to release 'corresponding financial analysis' alongside policy announcements. Official guidance by the Cabinet Office says any information subject to FOI should also be released to MPs, while the ministerial code states that departments 'should be as open as possible with Parliament and the public'. Dame Priti is expected to demand a correction and apology over the 'cover-up' from Sir Keir when MPs return from their summer break on Sept 1. Kemi Badenoch, the Tory leader, said: 'It's bad enough that Starmer and Reeves' economic mismanagement has created a £50bn black hole in the public finances, prolonging the cost of living crisis. 'Now our research has uncovered the Government's own figures showing Labour's Chagos surrender is costing the country another £35 billion. Add that to their £50 billion black hole, and it's clear – when Labour negotiates, Britain loses.' A Government spokesman said: 'The Diego Garcia military base is essential to the security of the UK and our key allies, and to keeping British people safe. 'The average cost is £101 million per year, and the net present value of payments is £3.4 billion – this is less than 0.2 per cent of the annual defence budget. 'The deal is supported by our closest allies, including the US, Canada, Australia and Nato. The costs compare favourably with other international base agreements, and the UK-US base on Diego Garcia is larger, in a more strategic location and has unparalleled operational freedom.' Starmer has been caught red-handed lying to the public Keir Starmer and David Lammy have been caught red-handed lying to the British public over the costs of Labour's Chagos surrender deal, writes Dame Priti Patel. This pair of diplomatic dunces have left Britain humiliated, weak, and the laughing stock of the international community. We've all known it's a terrible deal with huge costs to hard-pressed British taxpayers. But for months, ministers in public and Parliament have sought to cover up the true amounts. Even when the treaty was published and we could see the payments schedule, Labour tried to pull the wool over our eyes and deny the costs. When it was asked questions about the cash payments over the 99 years of the deal, it refused to answer. And when reports suggested the cost of the deal could be from £9 billion to £18 billion, Starmer claimed this was 'absolutely wide of the mark' whilst the Foreign Office tried to claim it was 'entirely inaccurate and misleading'. In fact, instead of owning up to the costs, Labour has used an accountancy trick to claim the amount was only £3.4bn – still a vast waste of money. But now we know the costly truth, having dragged the figures out of Government, kicking and screaming, through a freedom of information request. It's an mind-blowing £35bn. That's almost double the entire annual policing budget. Ten brand new aircraft carriers, 70 hospitals or a 5 per cent income tax cut. New prison places to lock up criminals, funding for social care, and millions upon millions of potholes could be fixed, with the £17bn local highways maintenance backlog covered twice ever. The list goes on. Every single Labour minister is complicit in this cover-up. Instead of paying for front line services in Britain and reducing our tax burden, these payments have lead to Mauritius being able to pay down its debt, cut income tax and slash VAT. Just think, as Rachel Reeves plots tax rises in the autumn to cover her catastrophic financial mismanagement, Labour is forcing you to pay for tax cuts in a foreign country. Is it any wonder the Mauritian prime minister has been bragging about how he secured concession after concession from Labour? From more money up front to the removal of a unilateral right to renew the proposed lease on Diego Garcia to the exercise of sovereign rights over the crucial military base, time and time again Britain backed down in negotiations. It's not just Starmer and 'Calamity' Lammy who are to blame for this diplomatic humiliation. Starmer's friend Lord Hermer, the Attorney General, and Jonathan Powell – Tony Blair's top advisor during the last Labour government's dodgy dossier scandal – have both been involved in these negotiations. They must be the worst team of negotiators in history. And it gets worse. Labour has manipulated parliamentary process to deny the House of Commons a meaningful debate and vote. So frightened are they of democracy that they have wilfully misled Parliament and ignored long-standing parliamentary conventions on holding debates and votes on treaties. The scale of the financial cost is bad enough, but Labour's Chagos surrender deal has profound and serious consequences for our national security and defence. This isn't just about paying for the privilege of something we owned last month. This is a critical strategic asset. In a world that is becoming increasingly dangerous, giving away a military base to a friend of our enemies is a supreme act of self-harm. Under the terms of the treaty, we need to disclose key information to Mauritius about the movements of UK, US and our allies' vessels and aircraft around Diego Garcia, and any military strikes we take from there. This is deeply concerning as, in recent years, Mauritius has grown closer to our key strategic threats – China, Russia and Iran – forging new partnerships, including one with Russia just days before the treaty was signed in May. This means that sensitive information risks being handed over to a friend of our enemies. Again, rather than facing up to the truth of what they are doing to our national interest, Labour ministers, including the Prime Minister himself, attempt to baselessly lie their way out of it. Starmer has tried to claim China, Russia and Iran were against the deal and it was necessary for our national security. That could not be further from the truth. China has welcomed the treaty since it was signed, while Iran and Russia have issued supportive statements towards Mauritius securing sovereignty over the Chagos Islands. Senior Mauritian officials have also publicly thanked China and Putin for their support. Starmer and Lammy must think the British public are gullible to swallow their lies. But we all know the truth. Labour has recklessly undermined our national security just because it wants to appease the whims and demands of its Left-wing lawyer and activist friends, and non-binding opinions issued by obscure international bodies few in Britain have heard of. As a result of Labour's stupidity, lies and incompetence, British taxpayers face a huge £35bn cost, our national security and defence capabilities have been damaged, and it has undermined our standing in the world. When Labour negotiates, Britain loses, and friend and foe alike have seen how feeble Labour is at negotiations over the Chagos Islands and will take advantage of us for years to come. Today, it has become all the clearer why Labour's Chagos surrender deal must be ripped up and consigned to the rubbish bin of history – and that Starmer and Lammy are incapable of understanding, let alone defending, the British national interest. Throughout this whole sorry saga, it is only the Conservative Party that has been fighting against Labour's Chagos surrender. We've challenged the Government in Parliament and in the public to the point where ministers are complaining about the pressure we're putting them under. And we'll keep on exposing Labour's lies and failures as we do all we can to oppose this deal, stand up for hard-pressed British taxpayers and fight for our national interests to be put first.
Yahoo
14-06-2025
- Business
- Yahoo
Starmer's Chagos surrender ‘will cost £5bn more than feared'
Sir Keir Starmer's deal to hand over the Chagos Islands will cost taxpayers £5 billion more than previously feared, the Tories have claimed. The Prime Minister last month signed the agreement to cede the archipelago to Mauritius and then rent back the military base on Diego Garcia, its biggest island. It had been calculated that the lease for the airbase, to be paid over the course of almost a century, would set the UK back at least £30 billion. But ministers have now admitted that the inflation figure they are using to calculate payments for future years is higher than previously thought. Mauritius, which has a GDP roughly the size of Leicester's, is going to use the huge windfall to deliver massive income tax breaks for its people. Sir Mel Stride, the shadow chancellor, said: 'Rachel Reeves has been unmasked as the 'spend today, tax tomorrow' Chancellor. 'It's a damning indictment of this government that not only are British taxpayers footing the bill for Mauritians to have their income tax cut but the costs of this terrible deal grow day by day. 'It is yet another kick in the teeth for hard-pressed British taxpayers who are already preparing for another tax raid later this year thanks to Labour's incompetence.' Downing Street has claimed Treasury calculations show the total cost of the Chagos deal will come in at £3.4 billion in real terms over 99 years. However that figure has been widely disputed, with critics saying the true tally once inflation and other payments are taken into account will top £30 billion. Those calculations were based on inflation averaging out at the Bank of England's target rate of 2 per cent across the entire century of payments. But this week Darren Jones, the chief secretary to the Treasury, said that for most of the period the Treasury is assuming inflation will run at 2.3 per cent. That would add £4.8 billion more than expected, according to Tory calculations, taking the final bill to the taxpayer up to just over £35 billion. Ministers have confirmed in response to written questions that the cash will come out of the Ministry of Defence and Foreign Office budgets. It could therefore count towards the Government's aim of spending at least 3 per cent of GDP on defence by the middle of the next decade, as well as any Nato targets. Under the deal, the UK has given up sovereignty over the Chagos, a remote Indian Ocean archipelago, to Mauritius after 200 years of British rule. Mauritius has agreed to lease back Diego Garcia, the biggest island in the chain and home to a British-US airbase, for the next century. The agreement has been criticised over both the cost and security implications, with Mauritius growing closer to China, Iran and Russia in recent years. Ministers have justified the pact by arguing the UK could have lost a future international court case brought by Mauritius, which claimed sovereignty. They said that would have put the future of the base, which was used by jets operating during both Gulf wars and the Afghanistan war, in doubt. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
14-06-2025
- Business
- Telegraph
Starmer's Chagos surrender ‘will cost £5bn more than feared'
Sir Keir Starmer's deal to hand over the Chagos Islands will cost taxpayers £5 billion more than previously feared, the Tories have claimed. The Prime Minister last month signed the agreement to cede the archipelago to Mauritius and then rent back the military base on Diego Garcia, its biggest island. It had been calculated that the lease for the airbase, to be paid over the course of almost a century, would set the UK back at least £30 billion. But ministers have now admitted that the inflation figure they are using to calculate payments for future years is higher than previously thought. Mauritius, which has a GDP roughly the size of Leicester's, is going to use the huge windfall to deliver massive income tax breaks for its people. Sir Mel Stride, the shadow chancellor, said: 'Rachel Reeves has been unmasked as the 'spend today, tax tomorrow' Chancellor. 'It's a damning indictment of this government that not only are British taxpayers footing the bill for Mauritians to have their income tax cut but the costs of this terrible deal grow day by day. 'It is yet another kick in the teeth for hard-pressed British taxpayers who are already preparing for another tax raid later this year thanks to Labour's incompetence.' Downing Street has claimed Treasury calculations show the total cost of the Chagos deal will come in at £3.4 billion in real terms over 99 years. However that figure has been widely disputed, with critics saying the true tally once inflation and other payments are taken into account will top £30 billion. Those calculations were based on inflation averaging out at the Bank of England's target rate of 2 per cent across the entire century of payments. But this week Darren Jones, the chief secretary to the Treasury, said that for most of the period the Treasury is assuming inflation will run at 2.3 per cent. That would add £4.8 billion more than expected, according to Tory calculations, taking the final bill to the taxpayer up to just over £35 billion. Ministers have confirmed in response to written questions that the cash will come out of the Ministry of Defence and Foreign Office budgets. It could therefore count towards the Government's aim of spending at least 3 per cent of GDP on defence by the middle of the next decade, as well as any Nato targets. Under the deal, the UK has given up sovereignty over the Chagos, a remote Indian Ocean archipelago, to Mauritius after 200 years of British rule. Mauritius has agreed to lease back Diego Garcia, the biggest island in the chain and home to a British-US airbase, for the next century. The agreement has been criticised over both the cost and security implications, with Mauritius growing closer to China, Iran and Russia in recent years. Ministers have justified the pact by arguing the UK could have lost a future international court case brought by Mauritius, which claimed sovereignty. They said that would have put the future of the base, which was used by jets operating during both Gulf wars and the Afghanistan war, in doubt.
BBC News
11-06-2025
- Business
- BBC News
Tories accuse PM of funding tax cuts for Mauritians with Chagos deal
Sir Keir Starmer has defended the UK's £3.4bn deal to hand over sovereignty of the Chagos Islands to Mauritius, while retaining control of a UK-US military base on Diego prime minister's questions, Conservative leader Kemi Badenoch called it a "terrible" deal and asked "why on earth" British taxpayers should be paying for tax cuts in Mauritius. Last week, Mauritian prime minister Navin Ramgoolam said the money from the Chagos deal would be used for debt repayments, as part of a Budget package that will see 80% of workers exempted from income prime minister said the UK risked jeopardising the "vital intelligence and strategic capability" on Diego Garcia without a deal. "Legal uncertainty would compromise it in very short order," he told MPs, adding "no responsible prime minister would let that happen".He said: "We have secured the base for the long term and that has been welcomed by our allies - by the US, by Nato, by Australia, New Zealand, India."It's been opposed by our adversaries - Russia, China and Iran. And in the second column we add Reform, following Putin, and the Tories following Reform."But Badenoch insisted the deal had "nothing to do with national security", adding that she had seen the security briefings when she was in government and it was "bad deal before and it's still a bad deal".Negotiations to hand over sovereignty of the Chagos Islands to Mauritius began under the previous Conservative the terms of the deal agreed by Labour, the UK will lease use of the Diago Garcia base for a period of 99 UK will pay £165m in each of the first three years. From years four to 13, it will pay £120m a year. After that, payments will be indexed to Keir says this will average out at a cost of £101m a year, although this figure is disputed by the Conservatives, who say it will be much his Budget, Navin Ramgoolam announced plans to reduce Mauritius's public sector debt to 60% of GDP in the long term."These projections are inclusive of the revenue from Chagos, which will be used for debt repayment for the first three years," he said in a speech to the country's also announced that 80% of workers will not pay income tax but higher earners will pay comes as a panel of experts urged the UK to renegotiate the Chagos deal as it "fails to guarantee" the rights of the Chagossian panel, appointed by the UN Human Rights Council, said it was "gravely concerned about the lack of meaningful participation of Chagossians in the processes that have led to the agreement".Philippe Sands KC, who represented Mauritius in its long-running legal battle with the UK over the Chagos islands, insisted this was not the case. "I want to really knock on the head this idea that all of the Chagossians were not involved in the various processes. That is simply not true," he told a House of Lords committee."It is true, however, that the Chagossian community is divided and I respect that division."The "quid pro quo" for the military base remaining on Diego Garcia was that Chagossians would be allowed to settle on the outer islands of the archipelago, he told said he understood the "bitterness and the hurt" of the Chagossian community in the UK, who were "forcibly deported from Diego Garcia and who wish to return and will not be able to return".But he said "most in Mauritius and Seychelles have made very they wish this deal to go ahead" - and they had been "deeply involved in consulting with successive prime ministers of Mauritius".He told peers the deal "will enhance Britain's position in the world" as a country that respects "the rule of law".It follows a 2019 advisory opinion from the International Court of Justice saying the islands should be handed over to Sands, who revealed that he had become a Mauritian citizen in 2020, so he could take part in a hearing in person during the Covid pandemic, said he had not been working "pro bono" for the country's government but could not say how much he had been also paid tribute to Liz Truss, who he said had kicked off negotiations during her brief tenure in Number is disputed by Truss, who has blamed Boris Johnson for starting the process when he was PM.
Daily Mail
11-06-2025
- Business
- Daily Mail
Mauritius 'will use cash from Labour's Chagos Islands deal to scrap income tax for 81% of its population and help pay off its national debt'
Sir Keir Starmer 's deal to hand over the Chagos Islands will fund sweeping tax cuts in Mauritius, it has emerged. The Prime Minister last month signed an agreement to cede sovereignty of the stretegically-important Indian Ocean archipelago to Mauritius. The deal will see the UK lease back a military base on Diego Garcia, the largest of the islands, with Britain paying Mauritius an average of £101million a year for 99 years. Sir Keir said the 'net cost' of the agreement will be £3.4billion, after adjusting for factors including inflation. But opponents said the true cost is ten times as much. According to The Telegraph, Mauritius will use almost £500million of the payments to help clear its national debt. This will allow the east African country to abolish income tax entirely for 81 per cent of employed Mauritians and raise minimum salaries. It has also been pointed out how, under the Chagos Islands deal, UK taxpayers are now funding more than 4 per cent of the Mauritian government's total budget. It comes amid warnings that Britons face fresh tax rises when Chancellor Rachel Reeves unveils her next budget in the autumn. A black hole in the public finances has been left by Ms Reeves' humiliating U-turn on axing winter fuel payments for pensioners. The Chancellor is also under intense pressure from Labour MPs to splurge more by abolishing the two-child benefit cap. Navin Ramgoolam, the Mauritian PM, announced the tax changes in his own budget speech last Wednesday. He said the UK's payments from the Chagos deal for the next three years would be used to help pay off his country's national debt, which has reached 90 per cent of GDP. Mauritius is also poised to raise the minimum salary before an employee pays income tax to £8,073 a year, which will scrap income tax entirely for 44,000 people. 'As a result of the measures I have introduced, 81 per cent of employees in our country will not pay any income tax,' Mr Ramgoolam said, according to the newspaper. Tory leader Kemi Badenoch said: 'Labour have lost control. They've raised taxes on working families. Businesses are closing. People are losing their jobs. 'Labour's answer: fund a tax cut for…Mauritians. They are not on your side.' Dame Priti Patel, the shadow foreign secretary, said: 'The only people benefiting from Labour's higher taxes are the people of Mauritius. 'While causing a financial black hole in Britain, whacking up our taxes and planning further tax raids, Labour's Chagos surrender deal means families in Mauritius will see their taxes cut at our expense. 'This is an insult to hard-working British people who have once again been betrayed by Keir Starmer with millions more paying more in tax.' Dame Priti also highlighted Mauritius government documents that showed how the UK's Chagos payments are set to make up more than 4 per cent of the country's budget this financial year. The Foreign Office has been approached for comment.
