Demands for disgraced Mandelson to pay back £75,000 to public purse after sacking
Files released by the UK Government show that the disgraced peer asked the UK Treasury to give him £547,201
Pressure is mounting on Peter Mandelson to pay back a £75,000 payout he received from the UK Government after he was sacked from his job as ambassador to the US as his links to convicted paedophile Jeffrey Epstein emerged.
Details of the payment came to light in files released yesterday by the UK government, which also revealed that prime minister Keir Starmer was warned of a “general reputational risk” ahead of his appointment to the ambassador’s role in Washington given Lord Mandelson’s relationship with the sex offender.
Lord Mandelson was appointed as ambassador in December 2024 but sacked in September 2025 after further details about the extent of his contact with the sex offender, who was first convicted of procuring an underage girl in 2008.
Their relationship lasted several years and Lord Mandelson reportedly stayed in Epstein’s house in June 2009, while he was in jail, the papers revealed.
The documents show the disgraced peer received the £75,000 payment after originally asking the UK Treasury to give him £547,201 - the remainder of his four-year salary.
Scottish Labour MP Scott Arthur said Mr Mandelson should pay the money back - and urged the UK Government to investigate Mr Epstein’s links to the British establishment.
The Edinburgh South West MP told the Commons: “I think as a government, we’re serious about the whole agenda of violence against women and girls.
“I just cannot conclude that giving Mandelson £75,000 is compatible with that.
“So I do hope that he repays it.”
He added: “Constituents are really concerned about Epstein’s links to the British establishment, really concerned. Particularly given the allegations against both Mountbatten-Windsor and Mandelson himself.
“I know there’s a live court case and investigations underway, but can the government commit to a public inquiry into Epstein’s links with the British state once these court cases are over?”
Conservatives have also called on the Government to demand Lord Mandelson return his severance pay and “release the files in full” following the publication of the first tranche of documents.
Shadow chancellor of the Duchy of Lancaster Alex Burghart MP said: “The lapse in the Prime Minister’s judgment knows no bounds.
“Labour must come clean about what ministers knew, when they knew it, and why national security safeguards appear to have been treated so casually.
“The Government must now release the files in full and demand Mandelson return his severance to the public purse.”
The severance payment of £75,000 included £40,330 as three months pay and a £34,670 termination payment.
The document said: “Negotiations began with a request by the individual to pay out the remainder of the 4- year salary costs of the fixed term appointment. This would have amounted to £547,201."
A “due diligence” document drawn up in December 2024 before Lord Mandelson’s appointment to the Washington role noted a series of reports detailing his links with Epstein.
Read more: UK Government will 'get ahead' of price rises caused by Middle East conflict as inflation rise looms
The document noted that after Epstein was first convicted of procuring an underage girl in 2008 “their relationship continued across 2009-2011, beginning when Lord Mandelson was business minister and continuing after the end of the Labour government”, noting that “Mandelson reportedly stayed in Epstein’s house while he was in jail in June 2009”.
It highlighted that in 2014 Mandelson agreed to be a “founding citizen” of an ocean conservation group founded by Ghislaine Maxwell, and funded by Epstein. Disgraced socialite Maxwell was a former girlfriend of Epstein and was jailed for 20 years in the US in 2022 for sex trafficking.
The section of the report concluded: “To note – general reputational risk.”
The 31 files released by the Government did not include correspondence between No 10 and Lord Mandelson, in which a number of follow-up questions were asked about his relationship with Epstein.
The Prime Minister has insisted Lord Mandelson “lied repeatedly” to No 10 about his relationship with Epstein, before and during his tenure as ambassador.
But the papers revealed senior officials had concerns over his appointment.
A record of a call between Jonathan Powell, the British government’s national security adviser (NSA) and Mike Ostheimer, the general counsel to the Prime Minister, said the NSA “raised concerns about the individual and reputation” to Sir Keir Starmer’s then-chief of staff Morgan McSweeney.
“MM responded that the issues had been addressed,” according to the note of the call, made in September 2025 as part of a fact-finding process surrounding Lord Mandelson’s sacking.
Sir Philip Barton, the then-Foreign Office permanent under-secretary, “also had reservations around the appointment”, the call record said.
Last month, MPs ordered the Government to release tens of thousands of documents relating to Lord Mandelson’s appointment following the US Department of Justice’s publication of the so-called Epstein Files.
The Prime Minister has insisted Lord Mandelson “lied repeatedly” to No 10 about his relationship with Epstein, before and during his tenure as ambassador.
Chief Secretary to the Prime Minister Darren Jones updated MPs on the release of the Mandelson papers in a statement on Wednesday afternoon.
He said: “Whilst the documents point to public reports of an ongoing relationship between Peter Mandelson and Jeffrey Epstein, the advice did not expose the depth and extent of their relationship, which only became apparent after the release of further files by Bloomberg and then the United States Department of Justice.
“After the Prime Minister reviewed the Cabinet Office due diligence, that noted public reporting on Peter Mandelson’s relationship with Jeffrey Epstein, questions were put to Peter Mandelson by advisers in No 10 …. and Peter Mandelson responded.
“These are matters that are currently the subject of an ongoing police investigation and we will publish this document when the investigation allows.
“When we do, the House will be able to see Peter Mandelson’s answers for themselves, which the Prime Minister regrets believing.”
In the Commons, SNP Westminster leader Stephen Flynn said: “The victims were not the Prime Minister’s first priority.”
He pointed to the fact that Lord Mandelson stayed at Mr Epstein’s house after his first conviction.
Lord Mandelson was arrested on February 23 on suspicion of misconduct in public office, having been accused of passing sensitive information on to Epstein during his time as business secretary.
He was subsequently bailed, but later released from his bail conditions, although he remains under investigation.
Comments
Want to join the conversation? Please or to comment on this article.