Chagos £35bn deal draws flak

The Chagos fight is really about three things at once — sovereignty, a military base, and a number big enough to hurt in politics. That number is £35 billion. Opponents of Keir Starmer’s deal with Mauritius have turned it into a simple attack line: Britain is “giving away” territory, then paying huge sums to keep using Diego Garcia anyway. But the catch is that the £35 billion figure is real in one sense, misleading in another, and now wrapped up in a much bigger argument about whether the deal can survive at all. (fullfact.org) ### What is the deal actually doing? The treaty would transfer sovereignty over the Chagos Archipelago from the UK to Mauritius, while letting the UK keep operating Diego Garcia — the island with the joint UK-US military base — under an initial 99-year lease. The agreement was presented to Parliament in May 2025, and it also includes security and financial provisions beyond the headline sovereignty transfer. (gov.uk) ### Why is Diego Garcia the whole story? Because this is not some obscure patch of ocean in strategic terms. Diego Garcia is one of the West’s most important military facilities in the Indian Ocean. That is why ministers argued the treaty was the safest way to lock in long-term access, and why critics say any sovereignty handover creates a needless vulnerability around an asset Britain and the US already use. (lordslibrary.parliament.uk) ### So where does £35bn come from? It comes from adding up the expected cash payments across the full 99-year lease in nominal terms — basically, not discounting future money. Full Fact lays out the structure: £165 million a year for the first three years, £120 million a year for the next 10, then the equivalent of £120 million a (lordslibrary.parliament.uk)s together and you get roughly £34.7 billion, which critics round to £35 billion. (fullfact.org) ### Why does the government say £3.4bn instead? Because it is using net present value — the standard trick for expressing a very long stream of future payments in today’s money. That calculation also uses the Treasury’s social time preference rate, which discounts spending far in the future. The Institute for Fiscal Studies told Full Fact that both ways of presenting the c(fullfact.org)seful one for judging scale across nearly a century. (fullfact.org) ### Why are critics still getting traction with £35bn? Because politics loves sticker prices. “£35 billion” sounds immediate, wasteful, and easy to compare with domestic spending pressures. It also helps critics fuse two lines of attack into one — cost and security — by saying Britain would both surrender sovereignty and pay to rent back a base it already controlled. That is much punchier than arguing about discount rates over 99 years. (fullfact.org) ### What changed this year? The biggest shift is that the deal stopped looking inevitable. In January 2026, parliamentary progress hit trouble after a Lords debate was withdrawn. Then in April 2026, reports said the government had paused the implementing bill and dropped it from the coming King’s Speech after Donald Trump attacked the arrangement. That turned a hard sell into a live vulnerability for Labour. (fullfact.org) ### Where did Trump come into this? Trump’s position has swung around, but the important part is that Washington’s backing matters because Diego Garcia is a joint UK-US base. In February he said the US would retain the right to “militarily secure and reinforce” its presence there if future arrangements broke down or threatened operations. Even when that sounded like condit(fullfact.org)ettle this alone. (fullfact.org) ### What’s the real argument underneath? Basically, both sides are compressing a complicated treaty into one emotionally useful frame. Supporters say the deal secures the base against legal and diplomatic erosion. Opponents say it manufactures a problem, then charges Britain rent to solve it. The £35 billion row matters because it makes that second argument feel concrete. (lordslibrary.parliament.uk) The bottom line is that this is no longer just a dispute over colonial history or accounting. It is now a test of whether Labour can defend a long-horizon strategic bargain when the short-horizon political number is £35 billion. (fullfact.org)