Political Storm Intensifies Over Mandelson's Taxpayer-Funded Exit Payment
The political crisis surrounding Prime Minister Keir Starmer escalated dramatically on Sunday following revelations that Lord Peter Mandelson received a substantial taxpayer-funded severance payment after his dismissal as Britain's ambassador to the United States. This five-figure payout, now under formal review, has emerged amidst explosive new information from the recently released Jeffrey Epstein files, creating a perfect storm of controversy for the Labour government.
Details of the Controversial Severance Package
According to detailed reporting from The Times, Mandelson was granted a termination package equivalent to three months' salary following his removal from the prestigious Washington diplomatic post in September. This dismissal occurred just seven months into his ambassadorial tenure, raising immediate questions about the circumstances surrounding his departure.
The financial specifics reveal a significant taxpayer burden: While Mandelson's exact salary has not been officially disclosed, the position of US ambassador falls within the Foreign Office's highest pay band, ranging between £155,000 and £220,000 annually. This indicates that the severance payout likely fell between £38,750 and £55,000 before taxation, firmly placing it in the high five-figure bracket.
Epstein Files Connection and Allegations
The controversy has deepened considerably with the latest tranche of documents released by the US Department of Justice related to convicted sex offender Jeffrey Epstein. These files reportedly contain evidence of three separate payments of USD 25,000 each made to Mandelson by Epstein in 2003 and 2004, establishing a financial connection between the two men that has raised serious ethical questions.
Further damaging revelations from the Epstein document release suggest that Mandelson shared confidential government information during his tenure as business secretary. Specifically, emails indicate he provided advance notice of a massive €500 billion European Union bailout package in 2010, potentially constituting misconduct in public office.
Police Investigations and Official Responses
Law enforcement authorities have taken significant action in response to these allegations. The Metropolitan Police has conducted thorough searches of two properties belonging to Mandelson—one in Camden, north London, and another in Wiltshire—as part of an ongoing investigation into potential misconduct in public office. While Mandelson has not been arrested, police have confirmed that inquiries remain active and ongoing.
The Foreign Office has issued an official statement confirming that Mandelson's employment termination followed "in accordance with legal advice" and standard civil service human resources procedures. However, in a significant development, officials have acknowledged that the severance payment is now "under review in light of further information that has come to light," directly referencing the Epstein files revelations.
Political Fallout and Internal Labour Unrest
The political consequences have been immediate and severe. Work and Pensions Secretary Pat McFadden has publicly suggested that Mandelson should either return the severance money or donate it to charities supporting victims of violence against women and girls. Opposition figures have described the payout as a "disgusting betrayal" of public trust and demanded its immediate recovery.
Within the Labour Party itself, senior Members of Parliament and peers have issued stark warnings that this scandal could fatally undermine Starmer's leadership unless there is a dramatic reset in Downing Street's approach. The Prime Minister's decision to appoint Mandelson despite his known association with Jeffrey Epstein has sparked outrage across party ranks and beyond.
Leadership Crisis and Speculation
Starmer now faces growing unrest within his own administration. His chief of staff, Morgan McSweeney—who reportedly backed Mandelson's controversial appointment—is under intense pressure amid speculation about a potential resignation. While Downing Street insists that rumors of an imminent leadership challenge are unfounded, the political reality appears increasingly precarious.
With a crucial by-election looming on the horizon and fresh polling indicating significant public dissatisfaction, the Epstein-linked controversy shows little sign of subsiding. Mandelson maintains his position that he has not acted criminally and was not motivated by financial gain, but these assertions have done little to calm the political storm.
The combination of a substantial taxpayer-funded payout, connections to a convicted sex offender, allegations of confidential information sharing, and ongoing police investigations has created what many political observers describe as the most serious crisis of Starmer's premiership to date, leaving the Prime Minister fighting for his political survival.
