Lord Mandelson Secures £75,000 Taxpayer Payout Following US Ambassador Dismissal
Newly released government documents have disclosed that Lord Peter Mandelson was handed a £75,000 taxpayer-funded payout after his contract as the United Kingdom's ambassador to the United States was terminated. The papers, made public on Wednesday, provide a detailed insight into the financial settlement and the negotiations that preceded it.
Initial Request Exceeded Half a Million Pounds
Emails contained within the initial batch of released papers indicate that Lord Mandelson first requested his contract be paid out in full, a sum totalling more than £500,000. This substantial initial demand was highlighted in correspondence from the Foreign Office's HR directorate.
An email dated October 16 last year, with the subject heading "PM settlement" from Alice McCullough of the Foreign Office's HR directorate, stated: "If there's any pushback, it might be worth mentioning that he opened negotiations asking us to pay out his contract (over £500k). Mark did very well to get this settlement down this low with minimal fuss."
Breakdown of the Final Settlement
The documents reveal that the Treasury ultimately agreed to provide Lord Mandelson with a payment of £40,329.50 "in lieu of notice" and a "special severance payment" of £34,670.50, bringing the total to £75,000. This settlement was significantly lower than his initial request.
Another document from the papers suggested that Lord Mandelson's counsel had advised him the notice period payment was "insufficient." The counsel argued that the Government's actions in removing him from the position had "permanently damaged" his employability, justifying a higher compensation.
Concerns Over Dignity and Media Attention
Following his dismissal in September last year, an email from Lord Mandelson to Mark Power, the chief people officer, showed his concerns about leaving the United States with "maximum dignity" and "minimum media intrusion." This communication underscores the sensitive nature of his departure from the diplomatic role.
Government and Opposition Reactions
Chief Secretary to the Prime Minister Darren Jones addressed Members of Parliament, stating that Lord Mandelson's initial request for a full contract payout was "inappropriate and unacceptable." The Cabinet Office minister elaborated: "As the documents show regarding his severance payment, Peter Mandelson initially requested a sum that was substantially larger than the final payment, not just two or even three times, but more than six times the final amount."
Jones further explained: "Despite the fact that he was withdrawn from Washington because he had lost the confidence of the Prime Minister, the Government obviously found that to be inappropriate and unacceptable. The settlement that was agreed was to avoid even higher further costs involving a drawn-out legal claim at the employment tribunal."
Shadow chancellor of the Duchy of Lancaster Alex Burghart expressed strong criticism, asserting that many constituents will be "disgusted" that Lord Mandelson received a £75,000 payout. Burghart added: "Keir Starmer was plainly aware of the relationship between Mandelson and the world's most notorious paedophile when he appointed him as US ambassador. What's worse, the Government gave him a payoff of £75,000 despite his resignation in disgrace. No one will be able to trust the Prime Minister's judgment again."
Burghart continued: "The Labour Government need to come clean on what documents have been hidden from view and whether WhatsApps or private emails have been deleted or hidden. The Government must release the files in full and make Mandelson repay the money."
Background and Implications
Lord Mandelson's appointment and subsequent dismissal as US ambassador have been surrounded by controversy. The released emails and documents shed light on the financial aspects of his termination, highlighting the significant gap between his initial demand and the final settlement. The case raises questions about the use of taxpayer funds in diplomatic appointments and the transparency of government dealings.
The Foreign Office's HR directorate appeared to commend Mark Power for managing to "get this settlement down this low with minimal fuss," as noted in the October email. This internal praise suggests a strategic effort to minimise costs and avoid protracted legal disputes.
As the story develops, further scrutiny is expected from both political opponents and the public regarding the full circumstances of Lord Mandelson's payout and the broader implications for government accountability and financial management.
