In a scandal that lays bare the breathtaking arrogance and fiscal recklessness of Sir Keir Starmer’s government, the true cost of the calamitous Chagos Islands treaty with Mauritius has been exposed, and the figure is almost beyond belief. For months, the Prime Minister has looked the British public in the eye and insisted the deal would cost £3.4 billion. But a devastating exposé, forced into the light by a Conservative Freedom of Information request, reveals the real cash commitment is a staggering £34.7 billion.
This isn’t a rounding error; it is a deception on a monumental scale. This ten-fold discrepancy, deliberately concealed within the arcane depths of Treasury spreadsheets, represents one of the most significant and humiliating blows to a British government in recent memory. While Labour ministers prepare to slash vital domestic services like the winter fuel payment for pensioners , they have secretly committed taxpayers to a century-long spending binge to give away sovereign British territory. This episode is more than just a policy failure; it is a calculated betrayal of public trust, a case study in incompetence, and a stark warning of the price Britain pays when Labour negotiates.
The Great British Cover-Up
At the rotten core of this scandal lies what can only be described as a deliberate “accountancy trick” designed to mislead Parliament and the British people. The government’s defence is that their £3.4 billion figure represents the ‘Net Present Value’ (NPV) of the deal, a standard Treasury methodology. This is a cynical and disingenuous argument. NPV is an abstract financial concept that discounts future payments to their value in “today’s money”. While technically a tool in the Treasury’s Green Book, its application here is a clear case of selective and opportunistic deployment to obscure a politically inconvenient truth.
The sheer audacity of the deception is revealed by Labour’s own hypocrisy. When Deputy Prime Minister Angela Rayner announces a popular spending plan, like her 10-year affordable homes project, the government trumpets the full nominal cost to make the investment seem as large as possible. Yet when it comes to a controversial deal to surrender British territory, they suddenly discover the magic of discounting, shrinking a £35 billion liability to a more politically palatable £3.4 billion. This isn’t standard procedure; it’s manipulation.
The truth had to be dragged kicking and screaming from a government desperate to conceal it. Ministers initially refused to provide the full costings to Parliament, orchestrating what the opposition has rightly branded a “cover-up”. They presented a partial truth as the whole truth, and in doing so, they have shattered their own credibility.
The Astronomical Price of Capitulation
So what is the true price of this national humiliation? The £34.7 billion figure represents the actual cash taxpayers will be forced to hand over to Mauritius for the next 99 years. This is not an abstract economic valuation; it is the total on the bill. The breakdown of this financial madness is infuriating:
- Lease Payments: The deal includes front-loaded payments of £165 million per year for the first three years, dropping to £120 million for the next ten.
- The Inflation Timebomb: In a shocking display of negotiating ineptitude, Labour agreed that from the 14th year onwards, these payments will increase annually with inflation for the remainder of the 99-year term. This was a key demand of the Mauritian Prime Minister and a massive victory for him, locking Britain into a liability that will spiral ever upwards for nearly a century.
- Endless Handouts: On top of the lease, the UK has committed to a £1.125 billion “Development Grant” to Mauritius and a one-off £40 million payment to a Chagossian Trust Fund.
This is not a deal; it is a capitulation. Labour has signed the UK up to an endless stream of payments in exchange for giving away territory. The Conservatives have rightly branded this “financial and strategic madness” and a “gross folly”.
A Legacy of Surrender
Labour’s primary excuse for this disastrous treaty is that their hands were tied by international legal rulings and that they had to act to secure the future of the vital UK-US military base on Diego Garcia. This narrative of necessity is a thin veil for sheer weakness.
For decades, the UK has faced legal challenges over its administration of the British Indian Ocean Territory. Landmark rulings from the International Court of Justice (ICJ) in 2019 and a UN General Assembly vote undoubtedly put the UK in a difficult diplomatic position. However, where a strong government would have stood firm and defended British sovereignty, Starmer’s Labour saw only an opportunity to appease the international community and surrender.
Critics of the deal, such as the Policy Exchange think tank, dismissed the legal threats facing the base as “baseless,” arguing the international courts had no real power to enforce their will. Yet Labour, seemingly terrified of its own shadow, rushed to the negotiating table. They have consistently tried to deflect blame by pointing out that the previous Conservative government initiated negotiations in 2022. This is a pathetic and childish defence. The Conservatives may have opened the door to talks, but it was Keir Starmer’s government that signed the final deal, agreed to the extortionate price, and ceded sovereignty. The responsibility lies squarely with them.
Labour’s Web of Excuses
Facing a full-blown political crisis, the government’s response has been a masterclass in deflection and denial. Prime Minister Starmer has argued there was “no alternative”. This is a fatalistic admission of his own government’s lack of resolve and imagination. He has attempted to trivialise the cost, comparing the annual payments to less than the running cost of an aircraft carrier, a comparison that is as insulting as it is misleading given the 99-year term.
But the most contemptible tactic came when the Prime Minister, cornered and having lost the argument, resorted to accusing opponents of the deal of effectively siding with Russia and China. This baseless and disgusting slur, rightly branded “beneath contempt” by the opposition, is the last refuge of a government that knows it has been caught out. It is an attempt to silence legitimate democratic scrutiny with vile and inflammatory accusations.
This entire affair has been, in the words of the Liberal Democrats, “shambolic”. It exposes a government that is not only profligate with public money but fundamentally dishonest in its dealings with the British people. As Conservative Leader Kemi Badenoch powerfully concluded, “when Labour negotiates, Britain loses”.
The Chagos treaty scandal is the defining failure of Starmer’s premiership. It is a humiliating blow that has destroyed his government’s credibility on fiscal management, transparency, and the defence of British interests. The government knowingly and willingly misled the public about a £35 billion commitment. They have been exposed, not by their own volition, but by the diligence of the opposition. This is not just politics; it is a fundamental question of trust, and Labour has proven itself utterly untrustworthy. The voters will not forget this monumental betrayal.
