The UK Foreign Office has launched a review into a taxpayer-funded pay-off given to Lord Peter Mandelson after he was sacked as ambassador to the United States, following fresh revelations about his associations with convicted sex offender Jeffrey Epstein and an ongoing police investigation. This review, which could force the peer to repay a five-figure sum estimated between £40,000 and £55,000, has ignited political controversy and calls for accountability.
Mandelson, a Labour peer and former cabinet minister, was appointed as the UK’s ambassador to Washington in December 2024 but dismissed in September 2025 after Downing Street cited new information about the depth of his relationship with Epstein. The pay-off, equivalent to three months’ salary under standard civil service termination procedures, was initially justified as part of legal employment terms, but its appropriateness is now under scrutiny due to emerging details from the Epstein files.
The latest release of documents in January revealed email exchanges between Mandelson and Epstein dating back to his time in government, including discussions on fiscal policy and potential leaks of sensitive information. Among these, one email indicated Mandelson gave Epstein advance notice of a €500bn EU bailout in 2010, raising serious concerns about misconduct in public office and breaches of confidentiality during his ministerial tenure.
In response, the Metropolitan Police have initiated a criminal investigation into allegations of misconduct, conducting searches at Mandelson’s properties in Camden and Wiltshire on Friday. Deputy Assistant Commissioner Hayley Sewart described the inquiry as complex, requiring significant evidence gathering and analysis, with no arrests made so far and no timeline provided for its completion.
Politically, the saga has embarrassed Prime Minister Keir Starmer, who appointed Mandelson, with allies urging that the pay-off be returned or donated to charities supporting Epstein’s victims. Former Prime Minister Gordon Brown expressed shock and betrayal, while MPs passed a motion demanding full disclosure of government files related to Mandelson’s appointment, intensifying pressure on Starmer’s administration.
The Foreign Office confirmed the review, stating it was instigated “in light of further information that has now been revealed and the ongoing police investigation.” A spokesperson emphasized that normal HR processes were followed but acknowledged the need for transparency, with details to be provided to Parliament as part of the government’s response to the recent parliamentary motion.
Mandelson has apologized for maintaining contact with Epstein after his 2008 conviction but denies any criminal wrongdoing or financial motivation. His legal representatives have been approached for comment, and a top corporate crime lawyer was seen visiting his home recently, underscoring the legal and reputational stakes involved.
Moving forward, the outcome of the review and police investigation could have far-reaching implications for government accountability, public trust, and diplomatic protocols. This case underscores ongoing scrutiny of elite connections and the vetting of high-profile appointments, potentially impacting Starmer’s leadership and highlighting the need for robust oversight in public service.
