Peter Mandelson quits Lords over Epstein scandal

Lord Mandelson is to quit the House of Lords amid allegations he passed market-sensitive information to paedophile financier Jeffrey Epstein.

Sir Keir Starmer had threatened legislation within weeks to strip Lord Mandelson of his title while the police are assessing information relating to alleged misconduct in public office.

The Cabinet Office has passed material to the police after an initial review of documents released as part of the so-called Epstein files found they contained “likely market-sensitive information” and official handling safeguards had been “compromised”.

The Lord Speaker announced that Lord Mandelson is to step down from the upper chamber on Wednesday.

It came after the Prime Minister told his Cabinet that the alleged transmission of highly-sensitive government business to Epstein was “disgraceful” and Lord Mandelson had “let his country down”.

A Downing Street spokesman said: “It is right that Peter Mandelson will no longer be a member of the House of Lords.”

Files released by the US Department of Justice apparently showed Lord Mandelson passing material to Epstein while serving as business secretary in Gordon Brown’s Labour administration as it dealt with the 2008 financial crash and its aftermath.

Mr Brown said he had written to Metropolitan Police chief Sir Mark Rowley to provide information relating to Lord Mandelson’s “inexcusable and unpatriotic act”.

The Prime Minister’s official spokesman said Sir Keir opened Tuesday’s Cabinet meeting by saying he was “appalled by the information that had emerged over the weekend in the Epstein files”.

“He said the alleged passing-on of emails of highly sensitive government business was disgraceful, adding that he was not reassured that the totality of information had yet emerged,” the spokesman said.

“The Prime Minister told Cabinet that Peter Mandelson should no longer be a member of the House of Lords or use the title, and said he had asked the Cabinet Secretary to review all available information regarding Mandelson’s contact with Jeffrey Epstein during his time serving as a government minister.

“He said he’d made it clear the Government would co-operate with the police in any inquiries they carried out, but he said the Government had to press and go further, working at speed in the Lords, including legislatively if necessary.

“He reiterated that there was a need to move at pace.

“The Prime Minister said Peter Mandelson had let his country down.”

Sir Keir had also ordered officials to draft legislation to remove the former ambassador to the US’s peerage, something that has not been done since a law was passed to strip titles from nobles who sided with the Germans in the First World War.

The Cabinet Office has referred material to the police after an initial review of Epstein files documents showed they likely contain market-sensitive information and suggested that “safeguards were compromised”, No 10 said.

It is understood the referral was made today.

“An initial review of the documents released in relation to Jeffrey Epstein by the US Department of Justice … found that they contain likely market-sensitive information surrounding the 2008 financial crash and official activities thereafter to stabilise the economy,” the Prime Minister’s spokesman said.

“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.

“In light of this information the Cabinet Office has referred this material to the police.”

Mr Brown told the Press Association: “I have today written to the Met Commissioner Sir Mark Rowley with information relevant to his investigation of Lord Mandelson’s disclosure of market sensitive and confidential government information to the American financier, Jeffrey Epstein, an inexcusable and unpatriotic act at a time when the whole government and country were attempting to address the global financial crisis that was damaging so many livelihoods.”

Epstein was sent details of internal discussions from the heart of the UK Government after the global financial crisis.

Lord Mandelson appeared to tell Epstein he would lobby ministers over a tax on bankers’ bonuses in 2009, and to confirm an imminent bailout package for the euro the day before it was announced in 2010.

In June 2009 he appears to have passed on what he called 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 financier was also sent an analysis of business lending in August 2009 drawn up by minister Baroness Vadera.

The sender of the message to Epstein has been redacted, but Lord Mandelson was involved in the Government email thread.

In a Times interview conducted before the latest allegations came to light, Lord Mandelson admitted to a “lapse in judgment” over Epstein’s funding of an osteopathy course for the peer’s husband Reinaldo Avila da Silva in 2009, at the time the Government was dealing with the global financial crisis.

The files contain reference to a £10,000 transfer from Epstein.

“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,” he said.

Lord Mandelson rejected the suggestion this left him open to bribery claims, with Epstein lobbying him to change banker bonus rules.

The peer insisted he had “absolutely no recollection” of receiving payments totalling 75,000 US dollars (around £55,000) from Epstein between 2003 and 2004 as bank details in the files released by the US Department of Justice indicated.

At Cabinet Sir Keir said: “For the public to see politicians saying they can’t recall receiving significant sums of money is just gobsmacking, causing them to lose faith in all politicians and weaken trust still further.”

Baroness MacLeod, special adviser to then chancellor Alistair Darling as the Government responded to the 2008 financial crash, said it was a “terrible breach of trust”.

She said her former boss, who died in 2023, would have been “shocked at the scale of this treachery”.

Lord Mandelson has been on a leave of absence from Parliament and his imminent departure was announced by Lord Speaker Lord Forsyth of Drumlean.

He told the upper chamber: “Given the public interest and for the convenience of the House, I’ve decided to inform the House 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.”

The Tories have used the scandal to question Sir Keir’s judgment in appointing him as ambassador to the US – a job which ended with him being sacked in September when further details emerged of his links to Epstein – and to put pressure on the Prime Minister’s chief of staff Morgan McSweeney who was an ally of Lord Mandelson.

Conservative leader Kemi Badenoch said: “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.”