Lord Peter Mandelson has announced his immediate retirement from the House of Lords following explosive allegations that he passed confidential, market-sensitive government information to the convicted paedophile financier Jeffrey Epstein. The dramatic development comes as Prime Minister Sir Keir Starmer threatened to introduce emergency legislation to strip the former business secretary of his peerage, marking an unprecedented political crisis.
Police Investigation Launched Over Leaked Documents
The Cabinet Office has formally referred material to the police after an initial review of documents released as part of the so-called Epstein files. Officials determined the papers contained "likely market-sensitive information" relating to the 2008 financial crash and subsequent government efforts to stabilise the economy, with evidence suggesting official handling safeguards had been "compromised".
According to Downing Street, the referral was made today after the Prime Minister's spokesman confirmed that "only people operating in an official capacity had access to this information and there were strict handling conditions to ensure it was not available to anyone who could potentially benefit from it financially. It appears these safeguards were compromised."
Prime Minister's Fury in Cabinet Meeting
Sir Keir Starmer opened Tuesday's Cabinet meeting by expressing his profound dismay at the revelations, telling ministers he was "appalled by the information that had emerged over the weekend in the Epstein files". The Prime Minister described the alleged transmission of highly-sensitive government business as "disgraceful", adding that he was "not reassured that the totality of information had yet emerged".
In a strongly-worded statement, Sir Keir declared that "Peter Mandelson had let his country down" and should no longer be a member of the House of Lords or use his title. The Prime Minister has asked the Cabinet Secretary to review all available information regarding Mandelson's contact with Jeffrey Epstein during his tenure as a government minister.
Financial Crisis Era Communications Revealed
Files released by the US Department of Justice apparently show Lord Mandelson passing sensitive material to Epstein while serving as business secretary in Gordon Brown's Labour administration during the tumultuous period of the 2008 financial crisis and its aftermath. The communications span several critical moments in the government's response to the economic emergency.
In June 2009, Mandelson appears to have forwarded what he described as an "interesting note that's gone to the PM" - an assessment by Mr Brown's adviser Nick Butler of potential policy measures including an "asset sales plan". The following month, Epstein received details about internal discussions regarding a proposed tax on bankers' bonuses, with Mandelson apparently offering to lobby ministers on the matter.
Perhaps most significantly, in 2010, the day before a major eurozone bailout package was publicly announced, Mandelson seemingly confirmed the imminent intervention to Epstein. Additionally, in August 2009, the financier was sent an analysis of business lending drawn up by minister Baroness Vadera, with Mandelson involved in the government email thread despite the sender's identity being redacted in the released documents.
Former Prime Minister's Condemnation
Gordon Brown, who served as Prime Minister during the period in question, has written to Metropolitan Police Commissioner Sir Mark Rowley to provide information relating to what he termed Lord Mandelson's "inexcusable and unpatriotic act". Mr Brown stated that the disclosure occurred "at a time when the whole government and country were attempting to address the global financial crisis that was damaging so many livelihoods".
Financial Transactions and "Lapse in Judgment" Admission
The Epstein files contain references to financial transactions between Mandelson and the disgraced financier, including a £10,000 transfer from Epstein to fund an osteopathy course for the peer's husband, Reinaldo Avila da Silva, in 2009. In a Times interview conducted before the latest allegations emerged, Lord Mandelson admitted to a "lapse in our collective judgment" regarding this arrangement.
"In retrospect, it was clearly a lapse in our collective judgment for Reinaldo to accept this offer. At the time it was not a consequential decision," Mandelson stated. However, he rejected suggestions that this left him vulnerable to bribery claims, particularly given Epstein's simultaneous lobbying efforts to change banker bonus regulations.
Notably, Lord Mandelson has insisted he has "absolutely no recollection" of receiving payments totalling approximately £55,000 from Epstein between 2003 and 2004, despite bank details in the released files indicating such transactions occurred.
Political Fallout and Resignation Announcement
The Lord Speaker, Lord Forsyth of Drumlean, announced to the upper chamber that "the clerk of the Parliaments has today received notification from Lord Mandelson of his intention to retire from the House, effective from February 4". This follows Mandelson's existing leave of absence from Parliament and comes amid mounting political pressure.
Conservative leader Kemi Badenoch has seized upon the scandal to question Sir Keir Starmer's judgment, noting that "five months ago Mandelson was UK ambassador with the full confidence of the PM. Today he is no longer the ambassador, in Labour or a peer. The scandal, sleaze, and speed of his downfall only increases the scrutiny on Starmer and McSweeney's decision to send him to Washington."
Baroness MacLeod, special adviser to then-chancellor Alistair Darling during the financial crisis response, described the revelations as a "terrible breach of trust", suggesting her former boss would have been "shocked at the scale of this treachery".
The Prime Minister's spokesman confirmed that Sir Keir had ordered officials to draft legislation to remove Mandelson's peerage - a measure not undertaken since laws were passed to strip titles from nobles who sided with Germany during the First World War. Sir Keir emphasised the need to "move at pace", warning that the Government would work "including legislatively if necessary" to address the situation.
As the police assessment continues and political repercussions unfold, the Mandelson-Epstein scandal represents one of the most serious breaches of ministerial conduct in recent political history, raising profound questions about accountability, transparency, and the safeguarding of sensitive government information during national emergencies.
