Diego Garcia Military Base and British Indian Ocean Territory Bill

Sean Woodcock Excerpts

Tuesday 20th January 2026 Commons Chamber

[Stephen Doughty]

I will carry on, and then I will take the intervention from the hon. Member for Huntingdon (Ben Obese-Jecty), who has raised these issues before.

For all the good intentions, I am afraid that Lords amendment 5 is unnecessary. We have been clear about the costs of the deal from the moment of signature. We published full details of the financial arrangements the very same day the treaty was signed, including in the financial exchange of letters and the explanatory memorandum laid before Parliament. If Opposition Members are having difficulty finding where that is, it is on pages 9 and 10 of the explanatory memorandum. The documents set out the payment schedule and the confirmed amounts at that time.

The methodology is clear: the average annual payment has been calculated using forecast inflation figures from the Office for Budget Responsibility. We used the forecast GDP deflator, which is published regularly. That generated the real value of the payments, which is the valueusb adjusted for inflation to create a fair comparison with other costs. Members will recall that this equates to less than a quarter of 1% of the Defence budget and compares favourably to the cost of comparable overseas facilities. I have mentioned the facility that France pays for in Djibouti. This is an immensely more valuable facility. It is priceless for our defence capabilities and those of our allies.

[Sean Woodcock (Banbury) (Lab)]

Can the Minister confirm that the deal provides certainty and full operational use of the base for 99 years?

[Stephen Doughty]

Absolutely, I can confirm that the deal secures the base for us and our allies. It secures the crucial capabilities that benefit ourselves, the United States and, indeed, all our allies.

I am happy to further canter through the calculations. The net present value was established by discounting the real value of the sums due to be paid over the duration of the treaty using the social time preference rate, as set out in the Green Book. That adjusts for social time preference, which is a reflection of the value society attaches to present, as opposed to future, consumption. That has been used in the UK by Governments of all flavours since 2003.

Members will be aware that my right hon. Friend the Chief Secretary to the Treasury announced a review of the social time preference rate shortly before Christmas. That follows a review of the Green Book last year. I do not know how that review will conclude, but I know that the Government used the correct methodology when the figures were published, and were clear and transparent in doing so, and we will continue to do so whichever way the review comes out.