Prime Minister Sir Keir Starmer stands accused of using an “accountancy trick” to mislead the public over the true cost of giving away British Islands hosting a strategic U.S. airbase in the Pacific Ocean.
The true cost of giving away a chain of strategic islands in the Pacific is £35 billion ($46bn), not £3.4 ($4.5bn) as the government attempted to claim, a report states. The Prime Minister has been accused of misleading Parliament over the figures.
The British Indian Ocean Territory was given away by the British government to Mauritius, a country with questionable links to the Islands but which nevertheless successful in using the International Court of Justice and the United Nations to award itself a claim, earlier this year. This plan, pushed through by international law extremist Prime Minister Sir Keir Starmer in spite of widely-discussed concerns about the wisdom of handing over such a strategic asset to an African state increasingly drifting towards China’s orbit, and the exorbitant cost.
Under the terms of the deal, the UK handed over the land under the Diego Garcia airbase, a joint UK-U.S. facility which is crucial for military reach across the Middle East and Asia as well as intelligence interception, and will lease it back for 99 years. Starmer’s government defended this expense on the grounds that it was good value for money and not even nearly as expensive as claimed. While the government said the deal would cost £3.4 billion, the Conservative opposition claimed it was more like £30 billion.
Now it is claimed an “accountancy trick” to hide the cash figure of giving away British islands from the public has been revealed. The Daily Telegraph states documents gained from civil service actuaries show the Starmer government knew the true cost of the deal all along but this was reduced from £34.7 billion using inflation estimates and a “controversial accounting method sometimes used for long-term projects”, the Social Time Preference Rate.
In aggregate, these discounts meant the government was able to hide 90 per cent of the cash cost of the island giveaway. Time Preference is a conceit in economics that states that if people have the choice, they prefer to see value sooner rather than later, so benefits and costs of projects are discounted with every year that passes to front-load perceptions.
The UK treasury explains: “The reason for social discounting is to allow proposals of different lengths and with different profiles of net costs and benefits over time to be compared on a common basis… Discounting in appraisal of social value is based on the concept of time preference – that generally people prefer to receive goods and services now rather than later.”. Over a long enough time horizon, the cost or benefit of anything would be shown to approach zero.
Time Preference is controversial for several reasons, including that it discourages long-term planning as it emphasises costs now and down-plays pay-offs later creating a “tyranny of the present”.
The Telegraph reports senior Tory Party lawmaker Priti Patel said of the revelation: “Instead of owning up to the costs, Labour have used an accountancy trick to claim the amount was only a mere £3.4bn.
“We’ve all known it’s a terrible deal with huge costs to hard-pressed British taxpayers. But for months, ministers in public and Parliament have sought to cover up the true amounts.”
Read the full article here
