Will Labour rethink the Chagos Islands deal with Mauritius?

Last October, the recently elected Labour government claimed a diplomatic coup. After two years of negotiations (begun under the Conservatives), Keir Starmer announced he had ended the decades-long dispute with Mauritius over the status of the Chagos Islands, the UK territory in the Indian Ocean that’s home to a joint UK-US military base. By agreeing to cede sovereignty and lease back the island base, he claimed, the UK would protect its national security interests for decades to come. Yet rather than harvesting a chorus of praise, the proposed deal – yet to be approved by Parliament or the UK’s American allies – has met with mounting opposition. US secretary of state Marco Rubio has criticised the plan saying it leaves the islands vulnerable to China. Critics at home, reportedly including members of Starmer’s own cabinet as well as political opponents, have called on him to rethink. This week the PM flies to Washington, hoping to sell his plan to Donald Trump.

Why are the Chagos Islands British?

A relic of empire. The tiny islands had long been used as a base by fishermen from the Maldives, but were uninhabited when they were “discovered” by Portuguese explorers in the 16th century. Later, they became the object of competing claims by European colonial powers. In the 18th century, France took possession of Mauritius (then known as Isle de France), the Seychelles, and the Chagos Islands – but ceded all of them to Britain under the Treaty of Paris (1814) that all but ended the Napoleonic Wars. From 1903 onwards, the UK governed Mauritius and the Chagos Islands together (the basis of Mauritius’s claim to sovereignty). The current dispute under international law arises from Britain’s decision in 1965 to separate off and keep the Chagos Islands as the British Indian Ocean Territory before three years later granting Mauritius independence.

Why did it do that?

For geostrategic reasons, and to please its US ally – the location of the islands made them an ideal site for defence and communications facilities aimed at countering the Soviet military presence in the region during the Cold War. The British Indian Ocean Territory was set up following discussions between Britain and the US, and a major joint military facility was built on Diego Garcia in 1971 – with thousands of Chagossians forced to leave.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

What’s the deal now?

The Starmer government proposes to hand sovereignty to Mauritius and pay it £9 billion to lease back Diego Garcia for 99 years. According to the government, this would secure the base’s long-term future by settling the long-running dispute over sovereignty and give the UK and its US allies a watertight legal title to their decades-old military base. In 2019, the International Court of Justice (ICJ) ruled that Britain’s continued sovereignty was unlawful, in a ruling that was later affirmed by the UN General Assembly. “Without legal certainty, the base cannot operate in practical terms as it should,” the PM has told the Commons.

Is Keir Starmer right to make Chagos Islands deal?

There are suggestions that Starmer cannot tell the whole story for reasons of national security, and in particular that his deal is necessary for ensuring the UK retains full and unrestricted access to the electromagnetic spectrum at the Diego Garcia base. But many observers are unconvinced – and the deal looks odd, to say the least. First, that ICJ decision was merely advisory, not binding, and when Britain joined the court it expressly excluded disputes with Commonwealth countries such as Mauritius. Critics accuse Starmer of putting the finer points of international law ahead of vital security interests at the precise moment when geopolitics are taking a more transactional, combative turn. Second, the UK is paying billions to give away sovereignty to Mauritius, a nation with at best a debatable historic claim to the islands – and where exiled Chagossians have often faced racist discrimination (the islanders have a mostly African ancestry and heritage, while the heritage of Mauritius nationals is mostly Indian).

Is the Chagos Islands plan flawed?

It’s certainly high risk, since it leaves Diego Garcia “hostage to the whims of future Mauritian governments”, says The Economist. Although far from a Chinese proxy, Mauritius has substantial trade links with China, and is also an ally of India, whose foreign policy could diverge materially from the West’s in the coming decades. Moreover, Britain’s “experience with Hong Kong, where China has flagrantly disregarded its post-handover treaty commitments, should give some pause”. In the very short-term, doubts about the deal have been compounded by the fact that the PM who negotiated it, Pravind Jugnauth, is now being interrogated on money-laundering charges, while the new PM has criticised the £9 billion offer for short-changing Mauritius.

What should happen to the Chagos Islands?

Britain’s historic treatment of the Chagossians – a people descended from enslaved Africans – has been pitifully shabby, says Kenan Malik in The Observer. Forcibly evicted and deported in the early 1970s, they now face having no say in the handover of their homeland to Mauritius, a country where they’ve faced ill-treatment, and which recently made it a crime for anyone to question its claim of sovereignty. At a minimum, Britain should use its remaining leverage to guarantee resettlement rights on the islands for non-Mauritian Chagossians, says The Economist. Better still would be for MPs to reject Starmer’s deal, and push instead for a settlement that would maintain sovereignty over Diego Garcia and give the Chagossians a say on the future of the other islands. Starmer’s deal worsens the West’s military position while “compounding a colonial-era wrong. Britain should think again”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.