Mauritius 'will use cash from Chagos Islands deal to scrap income tax'

Sir Keir Starmer's deal to hand over the Chagos Islands will fund sweeping tax cuts in Mauritius, it has emerged.

The Prime Minister last month signed an agreement to cede sovereignty of the stretegically-important Indian Ocean archipelago to Mauritius.

The deal will see the UK lease back a military base on Diego Garcia, the largest of the islands, with Britain paying Mauritius an average of £101million a year for 99 years.

Sir Keir said the 'net cost' of the agreement will be £3.4billion, after adjusting for factors including inflation. But opponents said the true cost is ten times as much.

According to The Telegraph, Mauritius will use almost £500million of the payments to help clear its national debt.