Controversial plans to hand the Chagos Islands over to Mauritius have reportedly been delayed amid fears of a “toxic" backlash over the cost of the deal as MPs are set to vote on sweeping welfare cuts.
The UK is set to give sovereignty over the British Indian Ocean Territory to Mauritius and then pay to lease back the strategically important Diego Garcia military base, which is used by the US.
The Government has not confirmed the exact cost of the deal, but it is speculated it could cost £90million-a-year for a century, with payments linked to inflation.
Negotiations began under the last Government and Downing Street confirmed in early April that the deal was being “finalised” after winning approval from President Donald Trump.
But senior figures in Number 10 are said to be concerned that officially signing of the proposal now would be politically “toxic” as MPs are set to vote on £5billion of cuts to benefits and welfare.
One source told the Times: “I don’t think we’ll be hearing about Chagos for a while. They want to take the sting out of it.”
Dozens of Labour MPs have expressed doubts about the planned welfare reforms and are said to be prepared to rebel against the government when they come to a vote in parliament next month.
Chancellor Rachel Reeves has prepared the package as a means to save billions of pounds and meet her fiscal rules.
The Prime Minister said the need for reform is “overwhelming”.
Asked about the rebellion, he added: “To start from the fundamentals, the system as it is is not working. Therefore it needs to be reformed.
“It is not complying with the three principles I have set out many times: support those who need support; ensure that those who can get into work are supported into work; and that those who can work, should work.”
On Friday, the Prime Minister’s spokesman declined to give a timeline for when the Chagos deal would be signed off or elaborate on the issues holding it up.
He added: “We've previously said that work continues on finalising a deal that will protect the US/UK base and our national security and intelligence gathering capabilities in the region.
“Our role in hosting this military base, and the capability this provides the UK and US, is central to the UK/US intelligence and security relationship.
“That work to protect our capabilities in the region continues.”
