Shadow Chancellor Mel Stride has disclosed that the actual expense of Britain’s agreement with Mauritius amounts to £35 billion across 99 years, a figure ten times greater than the £3.4 billion cited by the Prime Minister.
The revelation emerged through a Freedom of Information request submitted by the Conservative Party, which obtained documents from the Government Actuary’s Department showing the deal’s true cost at £34.7 billion in nominal terms.
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Speaking on GB News, Stride stated: “The Prime Minister back in February suggested in the House of Commons that the total cost is around £3.4 billion but we’ve established it’s actually around ten times that.”
The agreement involves Britain relinquishing the Chagos Islands whilst leasing back the Diego Garcia military base.
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Mel Stride slammed the Government’s Chagos deal
Government officials employed several accounting techniques to substantially reduce the reported cost figure, according to the documents obtained through the Freedom of Information request.
The £34.7 billion nominal cost was initially decreased to £10 billion by applying an estimated annual inflation rate of 2.3 per cent over the 99-year period.
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Subsequently, officials applied the Treasury’s Social Time Preference Rate, reducing the figure by between 2.5 and 3.5 per cent annually, based on the principle that immediate spending holds greater value than future expenditure.
These calculations resulted in a final figure that represents merely 10 per cent of the actual cash payments Britain will make to Mauritius over the coming century.
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Mel Stride joined Eamonn Holmes and Ellie Costello on GB News
Stride explained: “It all gets quite technical as to how they have narrowed down this number so much.”
The Shadow Chancellor highlighted the Government’s inconsistent approach to calculating long-term expenditure, noting that similar discounting methods were not applied to other policy announcements.
“When Angela Rayner told us how much will be spent on social housing did similar kind of calculations but didn’t use the same methodology at all because in that case, the Government wanted to inflate the figures to make them look bigger,” Stride said.
He added: “In this case, they wanted to make the numbers look smaller. We don’t think that’s being straight with the British people.”
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Mel Stride said Labour gave the figures a ‘haircut’
The Shadow Chancellor emphasised that ordinary citizens expect transparency when discussing a 99-year financial commitment: “People understand that when you talk about the cost of a 99-year arrangement you take the annual amount and add up all the figures and get to your number.”
The Conservatives intend to pursue the matter vigorously when Parliament reconvenes in September, with Shadow Foreign Secretary Dame Priti Patel expected to demand a correction and apology from the Prime Minister.
Stride confirmed the party’s plans: “We will of course be pressing the Government very hard on this when Parliament comes back in autumn.”
He added: “We will be saying in no uncertain terms, back in February when in fact we had been suggesting a figure between £9 and £16 billion and we were told we were wide of the mark. We will be asking ‘why has it taken the Conservative Party and a Freedom of Information request to expose this information?'”
The Shadow Chancellor described the situation as “totally and utterly unacceptable,” particularly noting that Mauritius has reduced taxes for its citizens using the British funding.
A Government spokesperson defended the arrangement: “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 spokesperson added: “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.”
