Sir Keir Starmer’s deal to hand over the Chagos Islands will fund tax cuts for Mauritians, the country’s Government has revealed. Mauritian PM Navin Ramgoolam announced on Wednesday that nearly £500 million in payments under the terms of the deal to gain control of the islands will be used to help pay off the East African nation’s national debt.

The move will allow their government to get rid of income tax for 81% of employed Mauritians, as well as raise minimum salaries, it is reported. Mr Ramgoolam announced the reforms in a Budget speech on Wednesday, saying Chagos payments made by the UK for the next three years would help reduce the country’s national debt, which currently stands at around 90% of GDP.

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Ministers are aiming to reach a long-term debt level of 60%, and as part of efforts to do so, the expenditure and revenue sides of their budget would be adjusted, and the minimum salary of employees subject to income tax would be raised to £1,774 a year.

The move would abolish income tax for some 81% of employees, Mr Ramgoolam said, with the figure amounting to around 44,000 people.

It will also see taxes reduced on other earners, The Telegraph reports. Sir Keir has faced stinging criticism over the agreement, which he said had a £3.4 billion net overall cost when he announced the agreement last month.

The deal will see Mauritius gaining sovereignty of the islands, which had been a British Overseas Territory since the mid 1960s.

However, the US and UK will still be able to operate a strategically important military base on Diego Garcia, the largest island in the archipelago, with Mauritius leasing back the base for nearly a century initially, at a cost of £101million per year.

But the, Tories have claimed the real figure is over £30 billion a year, when including inflation and all the other costs Britain is paying beyond the leasing of the Diego Garcia base.

The rent for the base alone is broken down as follows: £165 million a year for the first three years; £120 million a year for the next ten; then £120m plus inflation for years 14-99.

On top of that the UK has agreed to cough up £45 million a year for 25 years for development in Mauritius; and £40 million for a Chagossian trust fund.

Assuming an average of 2% inflation over the next 99 years, this sums to over £30 billion.

Conservatives have characterised the deal as a “surrender”, with Shadow Foreign Secretary Dame Priti Patel presenting a bill in the Commons yesterday aiming to block the handover.

Dame Priti said: “Labour’s Chagos surrender deal undermines our national security, will cost British taxpayers £30bn and has betrayed British Chagossians.

“Within days of coming to government last year the white flag was already being waved by Labour and now we can all see the huge costs it will have and the shameful failure to consider the rights of British Chagossians. This Bill will block the surrender of sovereignty and betrayal of British Chagossians.

“Keir Starmer and David Lammy have been too busy cosying up to their left-wing lawyer friends and activists to defend our national interests.

“Parliament must put a stop to this shameful surrender deal and legislate to protect our sovereignty, the rights of British Chagossians and taxpayers’ money.”

The British Indian Ocean Territory (Sovereignty and Constitutional Arrangements) Bill is the latest effort by the Tories and opposition parties to block the move.

In his announcement last month, Sir Keir said US President Donald Trump and other allies had welcomed the deal “because they see the strategic importance of this base and that we cannot cede the ground to others who would seek to do us harm”.

“If we did not agree this deal the legal situation would mean that we would not be able to prevent China or any other nation setting up their own bases on the outer islands or carrying out joint exercises near our base,” he continued, adding: “No responsible government could let that happen.”