Business & Finance

UK drops bill to hand Chagos Islands to Mauritius after US opposition


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The UK government has been forced to drop legislation that would ratify its deal to hand sovereignty of the Chagos Islands to Mauritius, after the US withheld its backing for the plan.

UK officials acknowledged on Friday that the legislation had run out of time to proceed to the statute book within the current parliamentary session, which will end later this month.

The setback on the proposal to transfer sovereignty of the Chagos Islands — which includes a joint US-UK base on Diego Garcia — is a sign of further strain in the UK-US bilateral relationship, following President Donald Trump’s repeated criticism of Britain over its response to the Iran war.

Downing Street is frustrated with U-turns in the US position on the proposed agreement over the British Indian Ocean Territoryaccording to people familiar with the matter. It was Washington’s refusal to formally exchange letters to amend a 1966 British-American treaty on the Chagos Archipelago — an essential step in the process to transfer the islands’ sovereignty — that forced the UK to drop its bill.

Under the controversial deal the UK would cede sovereignty of the territory to Mauritius, while leasing back the island of Diego Garcia for 99 years at a total cost of £3.5bn in current prices.

Britain has maintained the treaty will protect the future of the base, after the International Court of Justice issued an advisory opinion in 2019 that Britain must hand over the islands “as soon as possible”.

Diego Garcia has become a flashpoint in bilateral relations after the UK refused to allow the US to use it to launch initial strikes against Iran. Britain has since given the US approval to use the base to attack Iranian missile sites and other military capabilities targeting shipping in the Strait of Hormuz.

US defence secretary Pete Hegseth and US secretary of state Marco Rubio had welcomed the deal, but in January Trump lambasted the treaty agreed with Mauritius as an “act of great stupidity” by Britain.

Prime Minister Sir Keir Starmer in turn accused the president of heaping scorn on the deal “for the express purpose of putting pressure” on the UK over the future of Greenland, the semi-autonomous Arctic territory of the Kingdom of Denmark.

The bill had been paused since January after the Conservatives introduced a motion to stall its progress, claiming that the proposed UK-Mauritius deal was incompatible with international law because it interfered with the 1966 bilateral treaty.

Plans for the Chagos deal remain on hold while wrangling continues between London and Washington. Britain accepts that US support is crucial for it to progress. The decision to drop the bill was first reported by The Times.

In a post on X, Conservative leader Kemi Badenoch said the length of time it took for the government to drop the bill “is another damning indictment of a prime minister, who fought to hand over British sovereign territory and pay £35bn to use a crucial military base which was already ours”.

A British government spokesperson said: “Diego Garcia is a key strategic military asset for both the UK and the US. Ensuring its long-term operational security is and will continue to be our priority.

“We continue to believe the agreement is the best way to protect the long-term future of the base, but we have always said we would only proceed with the deal if it has US support. We are continuing to engage with the US and Mauritius.”

Last week a group of Chagossians won a landmark case that could pave the way for them to live permanently on the Indian Ocean archipelago.

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