The defeat delays ratification of the agreement and exposes deep unease across the Upper Chamber about a deal critics say locks the United Kingdom into decades of vast payments with little protection for taxpayers, national security or the rights of the Chagossian people.

The treaty, signed by Sir Keir in May, transfers sovereignty of the British Indian Ocean Territory to Mauritius while committing the UK to rent back Diego Garcia, home to a major British and American military base, for 99 years. The overall cost is estimated at more than £30 billion.

Former Chief of Defence Staff wins the battle

The successful amendment was tabled by Lord Craig of Radley, a former Chief of the Defence Staff, who warned that the treaty as drafted required Britain to keep paying Mauritius even if the base was rendered unusable by environmental damage, military attack or geopolitical change.

“There seems to be no break or conditional clause agreeing any reasons why the UK may cease these payments before the 99 year date is reached,” he told the House. He warned that history showed how rapidly strategic circumstances could change, adding, “In well under the past 100 years, foes have become friends and friends, potential and real, have become foes.”

Lord Craig raised the prospect of sea level rise, a catastrophic attack or a future decision by the United States that it no longer needed the base, asking whether Britain would still be bound to pay regardless. He questioned whether there was any legally binding agreement guaranteeing American use of Diego Garcia for the full duration of the lease.

“I do not wish to suggest any lack of importance of the base to national and international security at the present time,” he said. “But experience tells us that much can and does change over time.”

Support came from mostly all but Labour Peers

Support came from across the House. Lord Houghton of Richmond, another former senior military figure, warned that Diego Garcia’s strategic value and isolation could make it an attractive target in a future conflict.

“Pause for a moment to imagine the early stages of a global conflict,” he said, describing a scenario in which a hostile power might destroy the base with little risk of civilian casualties. “I cannot think of an obviously better or more considered target than Diego Garcia.”

Conservative peer Lord (Daniel) Hannan of Kingsclere accused the Government of failing to think through obvious risks during negotiations. He cited reports that the treaty had been “championed by a small number of civil servants” and claimed that among those administering the territory “there is no one who supports this treaty”.

Despite these warnings, ministers urged peers to reject the amendment. Responding for the Government, Baroness Chapman of Darlington argued that reopening negotiations with Mauritius would be unhelpful and could undermine relations with allies.

“The US, which has invested heavily in Diego Garcia, agrees that opening up the possibility of the agreement with Mauritius being terminated early is not helpful,” she said. She pointed to plans for a joint commission with Mauritius and said international treaty law already allowed for termination if performance became impossible.

Quoting the Vienna Convention, she told peers that international law permits termination where there is “the permanent disappearance or destruction of an object indispensable for the execution of the treaty”.

But her assurances failed to convince a majority of the House. Summing up before forcing a vote, Lord Craig said, “I still feel that this is something which should and could be sorted out before we get into formal ratification,” and declared that he would test the opinion of the House.

The result was a clear rebuke to the Government

Conservatives seized on the defeat as proof that Labour’s Chagos policy is unravelling. Lord Callanan, leading for the Opposition, described the treaty as “an abject surrender” that was never put before voters.

“The British people were not consulted on the treaty, yet it will see over £34 billion worth of taxpayers’ money paid to the Government of Mauritius over the treaty’s lifetime,” he said. He contrasted this with statements by the Mauritian Prime Minister that the money would be used to fund debt repayments and tax cuts at home.

“It is unconscionable that British taxpayers should be forced to continue to fund the Mauritian Government under the terms of the treaty in circumstances where the military base has become inoperable,” he added, pledging Conservative support for Lord Craig’s amendment.

Anger mounting over Government’s treatment of Chagossians

The debate also laid bare mounting anger over the Government’s treatment of the Chagossian people, who were forcibly removed from their islands between 1968 and 1973 and remain dispersed across the UK, Mauritius and the Seychelles.

Peers repeatedly criticised Labour for pushing ahead without meaningful consultation or consent. A recent survey conducted by the House of Lords International Relations and Defence Committee received more than 3,000 responses from Chagossians worldwide and found deep distrust of Mauritius, strong support for self determination and widespread opposition to the transfer of sovereignty without their say.

Lord De Mauley, who helped oversee the survey, said respondents expressed a “profound and enduring sense of injustice” and a desire to return to their homeland. He noted that many, “despite the appalling treatment the British Government have meted out to these people”, still expressed a preference for British sovereignty.

Starmer’s unholy rush

Several peers also questioned the Government’s haste in pushing the Bill through Parliament while a live judicial review remains unresolved. The case, brought by Chagossians and organised with the support of the Great British PAC, challenges the lawfulness of the Government’s actions and the lack of consultation. Judgment is expected shortly.

Critics warned that rushing the Bill to completion before the court has ruled risks rendering the judicial review academic. As one peer put it, Parliament should be “slow to legislate in a manner that pre-empts or undermines live judicial proceedings, particularly where those proceedings concern the rights of a specific identifiable group”.

What next for the Government?

Despite the Lords defeat, Labour ministers are expected to try to overturn the amendment when the Bill returns to the House of Commons. With a large majority, MPs are likely to reinstate the original wording.

However, last night’s vote guarantees delay and intensifies pressure on Sir Keir Starmer over a deal that many now regard as reckless and poorly thought through. What the Prime Minister once described as the only way to protect Diego Garcia from hostile influence is increasingly seen by critics as an expensive concession that weakens Britain’s position, alienates the Chagossians and leaves taxpayers on the hook for decades to come.

- Conservative Post, 06 Jan 2026

STOP PRESS – Facts4EU update, 9.00pm, 06 Jan 2026

We heard last night that the Third Reading, due to take place in the Commons today, has now been delayed by the Government until Monday (12 Jan 2026). This is, ‘coincidentally’ the same day that the final decision is due at the High Court on the already delayed Judicial Review judgement. This case has been brought by the Chagossian people, led by appointed first Minister Misley Mandarin, and backed by the Great British PAC.

Convention dictates that at least three days should pass between the Lord’s final debate and the final (Third) Reading in the House of Commons. This had been ignored by the Government until last night, when we heard that a decision had been made to delay it until Monday. We had considered it wholly improper for such a contentious Bill to be treated in this way and now it seems the Government has seen sense. We will all now be watching our clocks to see which decision is made first…..

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