Mauritius PM boasts British payments will pay off national debt and create ‘future fund’ for generations – as Reeves prepares autumn tax raid on struggling Britons
Sir Keir Starmer’s controversial Chagos Islands “surrender” will fund sweeping tax cuts that will see 81% of Mauritians pay NO income tax at all – while British families brace for punishing tax hikes in Rachel Reeves’ autumn Budget.
In an extraordinary revelation that will enrage hard-pressed UK taxpayers, Mauritius Prime Minister Navin Ramgoolam has announced that Britain’s eye-watering payments for the strategically vital Indian Ocean territory will be used to slash taxes and pay off the African nation’s entire national debt.
The bombshell admission comes as the true cost of Labour’s controversial deal emerges – with Britain set to pay up to £30 BILLION over 99 years, including £165 million annually for the first three years just to lease back the Diego Garcia military base we already control.
Meanwhile, British families face a black hole “tens of billions of pounds large” in the Chancellor’s forthcoming Budget, with warnings of massive tax rises to come.
THE GREAT TAX GIVEAWAY
In a budget speech last Wednesday that will infuriate British taxpayers, Mauritius PM Ramgoolam unveiled how UK payments will transform his nation’s finances:
INCOME TAX ABOLISHED FOR 81% “As a result of the measures I have introduced, 81 per cent of employees in our country will not pay any income tax,” Ramgoolam boasted, raising the minimum salary threshold before tax kicks in to £8,073 a year.
NATIONAL DEBT WIPED OUT The first three years of British payments – totalling almost £500 million – will be used to slash Mauritius’s national debt from 90% of GDP to a target of 60%.
‘FUTURE FUND’ FOR GENERATIONS After three years, UK payments will create a sovereign wealth fund to “create wealth for future generations” of Mauritians.
VAT CUTS ON FOOD The Mauritian government will also slash VAT on various food products, further reducing the cost of living for its citizens.
BRITAIN’S BILLION-POUND BETRAYAL
The staggering financial details of the deal reveal:
- £101 million per year average payment over 99 years
- £165 million annually for the first three years
- £3.4 billion total over the initial lease period
- Potential cost of £30 billion when inflation and extensions are included
- Option for 50-year extension with Britain having “right of first refusal” thereafter
Shadow Foreign Secretary Dame Priti Patel slammed the revelations: “The only people benefiting from Labour’s higher taxes are the people of Mauritius. While causing a financial black hole in Britain, whacking up our taxes and planning further tax raids, Labour’s Chagos surrender deal means families in Mauritius will see their taxes cut at our expense.
THE STRATEGIC SURRENDER
The deal, signed in May after a dramatic last-minute court battle, will see:
- Britain cede sovereignty of the entire Chagos archipelago
- UK forced to lease back the Diego Garcia base it built and operates
- Mauritius gain control over strategically vital Indian Ocean territory
- China’s growing influence in the region given a boost through its close ties with Mauritius
The base has been crucial for:
- Bombing strikes on Houthi targets in Yemen (2024-2025)
- Humanitarian aid deployments to Gaza
- Operations against Taliban and al-Qaeda in Afghanistan
- Monitoring undersea cables vital to global communications
CHAGOSSIANS BETRAYED
Adding insult to injury, the native Chagossian people – forcibly evicted in the 1970s to make way for the base – have been completely excluded from the deal.
We do not want to hand over our rights to Mauritius. We are not Mauritians,” protested Bertrice Pompe, a British citizen born on Diego Garcia, after failing to block the deal in court.
UN experts have now called for the agreement to be suspended, stating it “does not respect the rights of the native Chagossians” and demanding a new negotiation that guarantees their right to return.
LABOUR’S HUMILIATION
The deal represents a stunning diplomatic defeat, with critics noting:
- Britain is the first nation to PAY to give away territory rather than receive payment
- The Louisiana Purchase cost the US just $15 million for 828,000 square miles
- Alaska was bought for $7.2 million
- UK is paying billions to surrender islands it already controls
The TaxPayers’ Alliance calculated that the £18 billion potentially being paid (if inflation-linked) could instead fund the entire winter fuel allowance Labour controversially cut.
‘TAKEN FOR A RIDE’
Dame Priti Patel didn’t mince words: “This shows that Mauritius has taken the feeble and pathetic Sir Keir for a ride. This is an insult to hard-working British people who have once again been betrayed by Keir Starmer with millions more paying more in tax.
Conservative critics pointed out the bitter irony that as Mauritians celebrate tax cuts funded by British taxpayers, UK families face:
- Record tax burden under Labour
- £40 billion in tax rises from October’s Budget
- Average borrowing of £32 billion over the next five years
- Potential autumn Budget tax raids
WHAT HAPPENS NEXT
As Mauritius prepares to implement its British-funded tax paradise, questions mount over:
- Whether Trump’s administration will honor the deal
- If the agreement can be reversed by a future Conservative government
- How much more the final bill will be after “last-minute negotiations over costs
- Why Labour prioritized this deal while claiming the cupboard was bare
A Government spokesman was approached for comment but had not responded at time of publication.
The revelation that British taxpayers are funding tax cuts for Mauritians while facing their own tax rises represents perhaps the most extraordinary own goal in recent diplomatic history – and voters won’t forget it.
Image credit: Keir Starmer PM (cropped) by UK Government, OGL 3, via Wikimedia Commons
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