Lord Peter Mandelson requested a payment exceeding £500,000 following his dismissal as US ambassador by Keir Starmer due to his associations with Jeffrey Epstein. Initial documents reveal that the government approved a £75,000 exit package for the Labour figure, comprising £40,330 as three months’ pay in lieu of notice and a termination payment of £34,670.
However, further investigation shows that Lord Mandelson aimed for a substantially higher settlement at the expense of taxpayers. Negotiations began with a demand to cover the remaining four-year salary costs of his fixed-term appointment, totaling £547,201. Email correspondence indicates that officials acknowledged their success in reducing the settlement significantly with minimal resistance.
Lord Mandelson initially received an annual salary of £157,000 for the prestigious Washington role, which later increased to £161,318 in April 2025. These details emerged in a 147-page report released today following pressure from MPs to disclose documents related to his appointment as US ambassador.
The veteran Labour member was ousted by the Prime Minister last September after new revelations surfaced regarding his connection to the infamous convicted sex offender, Jeffrey Epstein. Questions now arise about Starmer’s awareness at the time of Mandelson’s appointment.
Recent events saw Lord Mandelson, aged 72, arrested in February on suspicion of public office misconduct for allegedly leaking sensitive information to Epstein during his tenure in Gordon Brown’s administration.
Certain files have been withheld citing national security or diplomatic reasons, with the Intelligence and Security Committee holding the final decision on redactions. Additionally, an agreement has been reached with Scotland Yard on the release of documents that won’t impede the ongoing police investigation.
Chief Secretary to the Prime Minister, Darren Jones, informed MPs that the due diligence report on Lord Mandelson failed to fully expose the extent of his ties to Jeffrey Epstein. He emphasized the importance of acknowledging the trauma experienced by Epstein’s victims and ensuring accountability for past wrongdoings.
Moreover, the government is considering tightening regulations on lobbying and paid advocacy to align House of Lords practices with those of the Commons. Opposition leader Sir Ed Davey criticized the payout, labeling it disrespectful to Epstein’s victims and urging Mandelson to donate any severance payment to charity.