Diego Garcia Military Base and British Indian Ocean Territory Bill

Lord Weir of Ballyholme Excerpts

Tuesday 18th November 2025 Lords Chamber

It is hard to conceive of a treaty less in the interests of the United States than the Mauritius treaty. It would be much better served if we were to afford the Chagossians self-determination, with the options of becoming part of Mauritius or what they say they want to be, a British overseas territory. That would be a win-win all round. The Chagos Islands, as has already been mentioned, could be resettled for less than the leasing bill to Mauritius for one island. In so doing, we would be taking the step that we should be taking to try to right the appalling wrongs of 1968 to 1973, which the Government continue to say were appalling. As the direct result of self-determination, the arrangement would bring legal certainty, just as did the separation of the Ellice Islands from the Gilbert Islands. Moreover, legal certainty would be provided in a context where all the islands, as a self-determined British overseas territory, would remain under British sovereignty, avoiding the power vacuum instability that is already being created by this Bill and the Mauritius treaty, with all that that means for international peace and stability.

[Lord Weir of Ballyholme (DUP)]

My Lords, it is always a pleasure to follow the noble Baroness, not least because my Amendment 59 comes from a similar position to her Amendment 23, in that it is a probing amendment. Indeed, looking across the range of amendments in this group, there is a considerable similarity between them; they all come from a similar spirit.

The amendments in this group, including mine, reflect two particular anxieties and concerns with the Bill. First, there are the overall financial implications and the concerns that have been raised in relation to them. My amendment specifically looks at the financial implications for defence. Secondly, given that a number of the amendments seek for the Government to produce an assessment or report, there is a concern that we want to get clarity and full transparency from the Government on a range of financial matters. My amendment deals with both those concerns.

On the issue of finance, we have already debated the transfer of sovereignty to Mauritius, which is proposed by the treaty and the Bill. A number of us have expressed our deep opposition to that, but this is not simply a case of handing over sovereignty to Mauritius. We are not simply giving sovereignty to Mauritius; we are paying Mauritius to take the Chagos Islands off our hands. That, in and of itself, shows one of the problems with the Bill.

We have seen in black and white the figures for the various payments that there will be, and the range of different assessments of what this deal will cost the taxpayer overall over its lifetime. The Government put it at the lowest level, with a GDP deflator, at around £3.4 billion. I think the cash terms are around £13 billion. The Opposition have indicated their assessment, with inflation, at £35 billion. I know that, in another place, one of the other parties not represented in this House gave an assessment that it would end up being around £50 billion, so there is a very wide range of cost.

However, one thing we can say with a level of certainty, as indicated by the noble Lord, Lord Hannan, is that this is money flowing out of this country that cannot directly benefit this country. If we make a presumption, which I will come to in a moment, that this is, in effect, defence spending then it is not simply money that cannot be used for the overall benefit of the UK; in defence terms, it is an opportunity cost. It is not simply something that is additional to the Bill, but money that cannot be spent on other things.

Across the lifetime of this deal, whether we assess it at £3.4 billion, £35 billion or whatever figure you place on it, there will be real terms consequences for defence. It may seem a relatively small amount compared with what we will spend on defence over that period, but I will give a few examples from a defence point of view. The Type 26 frigate programme comes to about £8 billion, the “Queen Elizabeth” class carriers cost about £6.2 billion in total, and a single F35 fighter costs about £80 million. All those things are being taken away. Whatever money is assessed as the current value of our contribution to Mauritius via this deal is money that cannot be spent in this country.

Finally, this again comes to the point about trying to seek a level of transparency. There is a level of dispute over how much we are spending and how we assess it, but there is also a lack of clarity about the budgets that money comes from. I think there are three possibilities. Is this money, in general, coming out of the Foreign Office budget? Is it more particularly, under that category, money that will be deducted from what would otherwise be overseas aid, or is it coming from the defence budget? The purpose of my amendment is to probe that and try to gain some clarity and transparency from the Government about not simply how much we are spending but where it is coming from.

[Lord Altrincham (Con)]

I thank the Minister for her patience in hosting this Committee. I will comment on my Amendment 52 and the other amendments in this group with specific reference to the financial agreement, where there seems to be ambiguity regarding the cost of this project. There clearly has been some ambiguity in the supervision of the contract, which may be because of the prerogative and lack of parliamentary participation, but this is a very large financial commitment to slip through under the prerogative and it is reasonable that we take a hard look at the contract itself in Parliament. That is why my amendment suggests that it goes back to the House of Commons.

The contract provides for two kinds of payments. It provides for 13 years of fixed payments of £2.3 billion. That is the easiest part of the contract to understand. If noble Lords wish to think of it in present value terms they might be a bit less than £2.3 billion, but those payments are nevertheless fixed and there is a schedule for when they are paid, albeit the Government appear to have offered the Republic of Mauritius the possibility of accelerating those payments.

Those payments take us to year 13. At year 14, the contract is linked to inflation. From here on, the payments are not just unknown but uncapped. That is a remarkable thing for the Government to offer. From year 14, the payments increase with inflation. No one knows what that will be; it could be very large. Therein lies the ambiguity in the approach to how much money is at stake: it is because the Government are offering the Republic of Mauritius the remarkably valuable asset of exposure to UK inflation from years 14 to 99. This is an almost unheard of contract. Incidentally, it is the same kind of financing error that His Majesty’s Treasury has made in linking so much of our gilt issuance to inflation. This itself has been the financial constraint on the Chancellor in recent months because of our exposure to the linkers, which have all moved up with inflation. It is an error that the Treasury has made before, so why is this contract linked to inflation?

I will take a look at what that actually means. The important numbers are the actual numbers that will be paid—nominal numbers—so let us not worry about the inflation adjusted and present value calculation. The actual numbers are those that will have to be funded by taxpayers in the future. If we go from year 14 and imagine a world of 2% inflation for the rest of the century, the Government will have to fund the Republic of Mauritius another £28 billion. At 3%, they will be funding £50 billion. At 4%, it will be £90 billion and at 5% it will be £174 billion.

Where do we go with these numbers? What do they really mean? How can we be comfortable with this kind of exposure? The first answer is that it is a very unusual kind of contract; it has no cap to it and provides enormous exposure to the UK over time. But in terms of just rough numbers, what does that mean? Trading in UK inflation through the gilt market indicates that, for the next 30 years, UK inflation will be around 3%, so it may be at the lower end. But if you look at other examples of where UK inflation has been over the last 100 years, there really are no suggestions that it is below 5%; it is more like 6% or 7%. Remember, it was over 10% only a couple of years ago and over 20% in the 1970s. Rolling forward at 100 years above 5% is probably a reasonable place to be.

Let us take it to be in the 3% zone, which would be very low and benign for the Government. If we then take one of the present-value calculations, we find that there are no scenarios in which this contract is worth less than £15 billion—and at £15 billion it is still uncapped: it is not as if it has been hedged, financed out or closed out in agreement with Mauritius. It still leaves the Government with all the exposure, so it is a remarkable contract in that form.

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[Lord Weir of Ballyholme (DUP)]

I know the Minister was not attracted by the charms of the Front Bench, so I will try slightly differently. I suppose what we are trying to establish first of all is the percentage breakdown between the FCDO and the MoD. It matters because if this is not additional money, there will be a level of opportunity cost. If, for example, we are eating into the MoD budget, that money could be spent on other things. I think, from what I have gathered from what the Minister has said, that the bulk of the money would come from the MoD because of restrictions, but it would be useful to have percentage terms.

[Baroness Chapman of Darlington (Lab)]

Okay, I will see whether we can get that. I do not know that that will be consistent over time, and I do not know whether the Treasury will want to be making that clear from now on. The MoD is deciding to buy itself some capability with this money. It is a significant investment, but it is not beyond the realms of what the MoD would spend on a capability such as this. That is my understanding. Exactly how much comes from each department will be published as we go along, because these things are published in the ordinary run of things.

The confusion in my mind comes from the interchangeable use of “ODA” and “FCDO”, and they are clearly different things. I look after the ODA budget, but the FCDO spends an awful lot more than just ODA. The MoD spends the ODA, too, as does DESNZ, the Department of Health, Defra and many other departments. Does this help noble Lords? Are we getting somewhere?

On Amendments 70, 74 and 75, all tabled by the noble Lord, Lord Callanan, I repeat that Parliament has already agreed the principles of the treaty and has not decided to vote against ratification. Any requirement for further approval from Parliament for the payments ignores the thorough and correct process that the treaty and Bill have already gone through and risks undermining the treaty, since non-payment by the UK is a ground for termination.

Regarding Amendment 74, I reassure noble Lords that there are no impacts on the cost of running the base from Article 10. This article pertains to the normal contractual arrangements, with any preference being to the maximum extent practicable and consistent with existing policies, requirements, laws and regulations.

Finally, regarding Amendment 75, I remind noble Lords that an annual payment to Mauritius is a fundamental part of the agreement, and this principle, and the amounts of those payments, were published in full on the day of treaty signature. I hope that in the light of this, the noble Lord will withdraw his amendment.

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[Lord Lilley (Con)]

My Amendment 10 deals with the issue of resettlement. This is a very sensitive issue, one that Chagossians feel very deeply about. But Article 6 of the agreement, which is entitled “Resettlement of Chagossians”, fails to give any right to Chagossians to resettle. The wording of Article 6 is:

“In the exercise of its sovereignty over the Chagos Archipelago, Mauritius is free to implement a programme of resettlement on the islands of the Chagos Archipelago other than Diego Garcia. Such resettlement shall be implemented in conformity with the terms of this Agreement and the laws of Mauritius”.


Let us be clear: there is no right for Chagossians to resettle; there is no obligation on Mauritius to resettle the Chagossians. Mauritius is simply free to do resettlement but it does not specify that that resettlement has to be by Chagossians. It could resettle it with Mauritians—just as, when I used to work in Indonesia, it resettled Javans on the various islands such as Borneo and Sumatra. All we are doing is saying that Mauritius can do what it likes—it can do or not do anything that is to the benefit of the Chagossians, or it can give away their former lands and islands to other people—and we will effectively sanctify that through our agreement to Article 6.

Back in 2015, the British Government looked at the possibility of resettlement and asked KPMG to do a study of how much it would cost and how feasible it was. A year later, KPMG came out with a report which stated that resettlement was possible. It would cost certain sums depending how much resettlement was done. If there was a pilot community of 150 people, that would cost in those days £63 million—in current money, that would be about £80 million to £90 million. If there was a medium-sized settlement of 500 people, that would cost about £200 million in today’s money, and if there was a large community of 1,500 people, which is more than the population of Chagos in 1965, that would cost in today’s money £570 million. That is a large sum, but it is much smaller than the sums we have committed to pay Mauritius over the life of this deal. They are largely one-off sums, whereas we are talking of paying Mauritius initially an average of £110 million, inflation adjusted, plus some lump sums and some bringing forward of money in the early period.

We could certainly start a pilot community of Chagossians back in the Chagos Islands for a fraction of what we are otherwise committed to spend on this agreement, so I understand why Chagossians feel really let down and sold out that we are prepared to pay so much money to Mauritius and to designate none of that to their potential resettlement. We pretend to by having this Article entitled “Resettlement of Chagossians”, but it gives no guarantee that the money will be spent in this way.

The study by KPMG looked into the practicalities. The reason it costs money is that we will have to rebuild facilities. On some of the islands there was a church, a hospital, buildings and so on that have fallen into rack and ruin. They would have to be re-established, and there would have to be transport facilities for the envisaged resettled communities to link up with each other and the outside world, but I again point out that these are not huge sums. This is not impossible. It is something that many in the Chagossian community, in the UK, in Mauritius even more, in the Seychelles and elsewhere would like to undertake, but they are not going to be able to undertake it unless Mauritius says so, and one gets the feeling that Mauritius is not terribly well disposed to the idea, otherwise it would not have negotiated such harsh terms in Article 6, which imposes no obligation on it to do so.

I ask Ministers to think again about this and to go back to the Mauritians and say, “I’m sorry, we have”—as they will have done by then—“consulted the Chagossians. We found how eager many of them are to resettle. Many more are eager to have the right of return to visit the graves of their ancestors, the places where they were born and the churches where they worshipped, and we feel they should be given that right, and if we’re going to settle a trust fund on you, we want to be sure it’s going to be used for those purposes as well as perhaps a chunk of the money we’re paying you in rent”. I hope the Minister will look at that in a positive way, given her evident sympathy for the Chagossians, and tell us that there is going to be a little hint of some more positive news that we can give the Chagossian community. I beg to move.

[Lord Weir of Ballyholme (DUP)]

I will speak briefly in support of the amendments tabled by the noble Lords, Lord Lilley and Lord Callanan, in this group. On resettlement, what we have in the treaty may be described as less than useless. I say that because, to a certain extent, it confers a right that is already there, but it underlines it in such a way and denies others that right. The treaty explicitly says that there is a right for Mauritius to resettle people.

If we have handed over sovereignty to Mauritius, people implicitly have a right to resettle on the other islands anyway but, actually, it very much underlines that Mauritius is completely in control; it is completely in the driving seat. There is a lack of reference to the Chagossians: yes, Mauritius may choose to allow some Chagossians back, but it may choose also to deny them. There is no specific right for the Chagossians.

If, as has been mentioned across the Chamber, we are to try to rectify some of the many ills that we have done to the Chagossian people over the years, having at least some level of right of return is the bare minimum that we should be looking for here. The concern is that, from the point of view of Mauritius, the implication will be that, if it is to allow back some Chagossians, they will be the hand-picked Chagossians who have played ball with the Mauritian Government. If you are a good boy or a good girl, yes, you may be allowed back. If, however, you have been part of the awkward squad, you may have a much lesser chance of being resettled on the Chagos Islands than, for example, Chinese contractors. That is the problem.

These amendments would at least take a step towards trying to ameliorate and rectify that situation. If we cannot give the Chagossians an opportunity or a right, which is completely missing in the treaty and missing in the Bill, we are not giving them anything.

[Lord Hannan of Kingsclere (Con)]

My Lords, I just want to add my voice to those of my noble friend Lord Lilley and the noble Lord, Lord Weir. If the Chagos Islands had remained inhabited, this issue of sovereignty would not have arisen. They would have been in the same category as Gibraltar, the Falklands or any other territory with a permanent population that had expressed its right to self-determination.

Now, you could argue that that would solve our problem in terms of the base. Equally, you could argue that it is the obvious way of making restitution; it is the way of giving back what was taken. But if you flip that around and look at it from the point of view of Mauritius, is that not precisely why you would not want to have a Chagossian population—or an exclusively Chagossian population—in a doughnut in the outer atolls around Diego Garcia?

The last thing you would want is to risk a Chagossian secessionist movement, where the people who had returned to their ancestral homes had made it very clear that they felt no loyalty to the state of Mauritius and that—in most cases, with a few exceptions, as the noble Lord, Lord Weir, said—they did not want to be part of it. Therefore, you would have every incentive to settle the place with your own citizens, or with others, so that they were at least a majority.

[Lord Weir of Ballyholme (DUP)]

I thank the noble Lord, Lord Hannan, for his remarks. Picking up a point made by the noble Lord, Lord Lilley—I have a subsequent amendment on the supplementary list, so we may get to it at some point but it is not on today’s list—does the noble Lord, Lord Hannan, agree with me that what makes this lack of provision for resettlement of the Chagossians worse is that we actually have a blueprint, albeit not necessarily perfect, of how this can be achieved, through the KPMG report in 2015? It is not as though we are doing this against a vacuum. We are not only ignoring the right of Chagossians to return but completely ignoring the pathway through which this can happen.