Sir Keir Starmer is under mounting pressure to recover taxpayers' money from Lord Peter Mandelson, following allegations that the disgraced peer received a substantial financial payout after being sacked from his role as US ambassador. The Prime Minister is facing renewed calls to disclose whether Lord Mandelson was handed a severance package following his abrupt dismissal from the senior diplomatic position in Washington DC last year.
Epstein Links Trigger Intense Scrutiny
Lord Mandelson was removed from his ambassadorial post, which carried an annual salary of approximately £160,000, by Sir Keir in September last year. The dismissal came amid revelations about his friendship with the convicted paedophile Jeffrey Epstein. Fresh scrutiny has intensified following the release of millions of documents in the United States, known as the 'Epstein files', which have shed new light on these controversial connections.
Sir Keir, who personally selected the former Cabinet minister for the prestigious US ambassador role before being compelled to sack him, has told Lord Mandelson that he 'let his country down'. This rebuke followed the emergence of US Department of Justice files that appeared to show Lord Mandelson passing sensitive material to Epstein while serving in Gordon Brown's government.
Government Response and Police Referral
Downing Street revealed on Tuesday that the Cabinet Office has referred material to the police after an initial review of the Epstein documents suggested that official handling safeguards were 'compromised'. Government ministers have also indicated that Lord Mandelson 'lied' about his past links to Epstein when he was vetted for the ambassador position.
However, Number 10 has refused to comment on what it describes as 'HR matters' when questioned about the financial terms of Lord Mandelson's dismissal last year. When asked if any efforts were being made to reclaim taxpayers' money from Lord Mandelson, the Prime Minister's official spokesman told reporters: 'I'm not going to get into HR matters. More broadly, anything of that nature would be set out in annual accounts in line with usual processes.'
Parliamentary Questions Remain Unanswered
Alicia Kearns, the senior Conservative MP, revealed on Monday night that she has received no answers about a possible severance payment for Lord Mandelson, despite writing to Cabinet Secretary Sir Chris Wormald in December. During questions in the House of Commons, Ms Kearns pressed Darren Jones, the Chief Secretary to the Prime Minister, stating: 'I am afraid that a number of questions to the Cabinet Secretary... still have not been answered.'
She continued: 'Did Mandelson receive a taxpayer-funded severance payment after stepping down as ambassador? If so, how much was it? Will details of his contract be published, in the name of transparency? Was any non-disclosure agreement signed, and when did Lord Mandelson's salary formally cease? These are not unreasonable questions, but almost two months on, I have had no response from the Cabinet Secretary. That gives me enormous concern.'
Mr Jones replied: 'I will feed what she has said back to the Cabinet Secretary and ensure that she gets appropriate answers to her questions.'
Historical Precedents for Payouts
If Lord Mandelson did secure a significant compensation package after being withdrawn as US ambassador, he would follow a long line of officials who received payouts after being forced to step down. Sir Tom Scholar, the top official at the Treasury, was sacked just days after Liz Truss became prime minister and received an exit payout of £335,000. Similarly, Jonathan Slater, the former permanent secretary at the Department for Education, received a £277,780 payout after he left in 2021 following backlash over the use of a controversial algorithm to award A-Level and other exam grades.
Mandelson's Personal Account of Dismissal
In a recent interview with The Times, Lord Mandelson compared his sacking as US ambassador to a '5.30am drive-by shooting'. He revealed how he and his husband, after receiving a call from Downing Street, were told to vacate the ambassador's residence 'in a week, with everything packed up and removed'.
'It felt like being killed without actually dying,' Lord Mandelson added, before dismissing the prospect of him disappearing from public life over the scandal. He continued: 'Hiding under a rock would be a disproportionate response to a handful of misguided historical emails, which I deeply regret sending. If it hadn't been for the emails, I'd still be in Washington. Emails sent all those years ago didn't change the relationship that I had with this monster. I feel the same about the recent download of Epstein files, none of which indicate wrongdoing or misdemeanour on my part.'
Official Silence on Financial Details
In November last year, the Foreign Office's top official refused to say whether Lord Mandelson had received a payoff. Sir Oliver Robbins told MPs on the Commons' Foreign Affairs committee: 'The way in which we deal with individual employees' termination under their contract must remain confidential between us... So I am not at liberty to say whether a settlement was made in his case. All I can tell you is that it was done absolutely in accordance with his written contract with us.'
Sir Oliver insisted that 'any implications of his termination will be reported in our annual report and accounts', maintaining the government's position of confidentiality regarding individual employment matters while acknowledging eventual transparency through official financial reporting channels.
