A Cabinet minister and key ally of the Prime Minister has said Peter Mandelson should return the payoff he bagged after being sacked as the UK’s ambassador to the US.
Work and Pensions Secretary Pat McFadden told Sky News Mandelson should “give [the payoff] back or give it to a charity, perhaps one involving violence against women and girls”.
“I think taking a payoff in these circumstances, I don’t think the public will think much of that,” he added.
The Labour veteran is believed to have been handed a pay-off of up to £40,000 following his ousting as more details emerged over his ties to convicted sex offender Jeffrey Epstein. This is due to his old post typically having a salary of £155,000-£159,999, putting a three months’ pay-out at around £40,000.
Mandelson was removed from the role in September 2025 ahead of a major release of new Epstein files from the US Department of Justice.
The latest release has shown deeper ties between the peer and Epstein and led to accusations the former shared market-sensitive information with the convicted paedophile.
The Liberal Democrats have called on the UK’s financial watchdog to investigate Mandelson, warning that his alleged sharing of confidential government information with Jeffrey Epstein may have led to insider trading during the financial crisis.
Mandelson scandal adds pressure on Starmer
The scandal has placed renewed political pressure on Prime Minister Sir Keir Starmer and his chief of staff Morgan McSweeney, who is believed to have led on Mandelson’s appointment. Speculation that top Labour names are gearing up to form a leadership challenge have also risen with former deputy leader Angela Rayner reportedly locking down a war chest of £1m.
“I believe he (the Prime Minister) should stay,” McFadden said on Sunday.
“I think he’s got a five-year mandate, which was just voted for 18 months or so ago in a general election. His task is by no means complete, barely begun.”
He added despite the “difficult week,” Starmer “admits he’s made a bad mistake” in appointing Mandelson, which he will “learn from going forward”.
Shadow foreign secretary Dame Priti Patel said: “A five-figure taxpayer-funded payout for Lord Mandelson is a disgusting betrayal of Epstein’s victims.
“Once again it raises very serious questions about the Prime Minister’s judgment and his disgraced chief of staff Morgan McSweeney.
“The Government must ensure Mandelson’s golden goodbye is recovered in full.”
