Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Sir Keir Starmer has signed a long-term deal to hand sovereignty of the Chagos Islands to Mauritius under which Britain will pay more than £100mn a year to guarantee the future of a joint US-UK air base.

The UK government on Thursday said the agreement would guarantee the future of the Diego Garcia air base in the Indian Ocean for “at least the next century” and that the net present value under the treaty was £3.4bn.

The prime minister signed the deal, which will see Britain pay £101mn a year, in a virtual ceremony with the Mauritian government only after a last-minute High Court injunction granted in the early hours of Thursday was lifted.

Starmer said the base was “absolutely vital” for national security and played a role in military operations in the Red Sea and across the Indo-Pacific.

“This was the only way to maintain the base in the long term; there’s no alternative,” he told a press conference at the Northwood military command centre near London.

Starmer claimed that Britain would have been liable to international legal challenge over its control of the Chagos had it not signed the treaty with Mauritius, putting the operation of the base in jeopardy.

The prime minister said the UK’s four partners in the “Five Eyes” security alliance — the US, Canada, New Zealand and Australia — backed the treaty, while Russia, China and Iran opposed it.

Starmer said it was “surprising” that Conservative leader Kemi Badenoch and Nigel Farage, Reform UK leader, were in the latter camp, having accused the prime minister of surrendering sovereignty over the islands.

The US, the primary user of the Diego Garcia base, would continue to fund much of its annual running costs, an amount that dwarfed the UK’s yearly payment, he added.

The deal includes what ministers called “robust provisions to keep adversaries out” of the Chagos area, including a 24-mile nautical buffer zone and a ban on foreign security forces on outer islands.

The measures — widely seen as being aimed at China, which the previous Tory government described as an “epoch-defining challenge” to Britain — also include a process with Mauritius to “prevent any activities on the wider islands” from disrupting base operations. The UK and US would share veto powers under the deal, government officials said.

Navin Ramgoolam, prime minister of Mauritius, welcomed “a great victory” in a live broadcast. “We have gained recognition of our sovereignty over the entire archipelago of Chagos, including Diego Garcia, which completes the process of decolonisation which began in 1968,” he added, noting the deal’s “financial package”.

The long-planned arrangement for the British Indian Ocean Territory has been heavily criticised by Badenoch, who has accused Starmer of giving up an important strategic asset and saddling taxpayers with large payments to retain access. 

Starmer noted that the £101mn average annual payment was treated as a £3.4bn net present value cost under UK accounting rules, endorsed by the Office for Budget Responsibility, the fiscal watchdog. Officials said initial payments would be higher and taper over time, but did not provide further details.

Crucially US President Donald Trump endorsed the deal when he met Starmer in the White House in February, saying: “I have a feeling it’s going to work out very well.”

The signing of the deal came after Mr Justice Martin Chamberlain said an emergency order granted by Mr Justice Julian Goose at 2.25am “is discharged from this point onwards”.

In his ruling Chamberlain said the application for an injunction requested by two Chagossian women, led by Bertrice Pompe, was “unprecedented” and would prevent the government from concluding a treaty “in the exercise of a foreign treaty prerogative” to which it was entitled.

At a hearing in the case on Thursday morning, Philip Rule KC, acting for the lead claimant and speaking remotely from New York, petitioned the court to extend the “interim relief” on the deal. He argued that the government had not given proper “recognition and consideration and provision” for Chagossian UK citizens in its decision-making.

However, Chamberlain was critical of the overnight application from the start of the hearing, stating that it was “not really a proper way to litigate” and that the lead claimant should have made an application sooner.

Pompe said it was “a very, very sad day” but “we are not giving up” after the ruling.

Additional reporting by David Pilling in London